Governor’s proposed budget includes tax hike for casinos

Tuesday, Feb. 4, 2003 | 11:21 a.m.

ATLANTIC CITY -- New Jersey Gov. James McGreevey's proposed budget would cost the state's casinos $135 million more in taxes this year, the Atlantic City Press reported today, citing the proposal.

McGreevey wants to raise the tax rate on casino revenue to 10 percent from 8 percent and impose a sales tax on incentives casinos give to their best gamblers such as rooms and meals. New Jersey faces a $5 billion budget gap, the paper said. The casino revenue tax has remained unchanged in the 25 years New Jersey has had legalized casinos, the paper said.

The plan is a "ridiculous proposition," Casino Association of New Jersey President Dennis Gomes told the paper. New Jersey casinos already face a threat from the possible expansion of casino-style gambling in neighboring states such as Pennsylvania and New York, the paper said. Casino investment in the state would be halted, McDonald Investments analyst Dennis Forst said.

The governor is not trying to harm the casino industry, the paper quoted McGreevey spokesman Micah Rasmussen as saying. The state's 12 casinos made $106 million in profit in 2001.