All posts by Christopher L. Soriano

No NJ Sports Betting – Again

Dealing another setback to New Jersey’s long running battle to implement sports betting at casinos and racetracks in the state, the Third Circuit Court of Appeals has again ruled that the state’s latest effort to implement sports betting runs afoul of the federal Professional and Amateur Sports Protection Act (PASPA).

Briefly, PASPA prohibits a state from “authorizing by law” sports betting.   New Jersey previously challenged the constitutionality of the statute, arguing that PASPA impermissibly commandeers a state to implement a federal regulatory scheme because the state legislature has no choice but to keep sports betting illegal in the state.  The Third Circuit concluded that states had options, even considering that a state may repeal its prohibitions in whole or in part.

New Jersey then repealed its criminal prohibitions on sports betting to the extent those apply to casinos and racetracks.  New Jersey took the position that this partial repeal did not amount to a prohibited “authorization” because there is a distinction between authorizing and repealing.  The Third Circuit disagreed, but later agreed to review the case en banc.

Today, the en banc court, in a 10-2 vote, reaffirmed its prior position that New Jersey’s partial repeal amounts to an authorization prohibited by PASPA.  The court backpedaled from its earlier opinion:  “To the extent that in Christie I we took the position that a repeal cannot constitute an authorization, we now reject that reasoning.”  The court also continued to hold that states have more options under PASPA other than a total repeal of prohibitions on sports betting and maintaining those prohibitions as they currently exist.  “To be clear, a state’s decision to selectively remove a prohibition on sports wagering in a manner that permissively channels wagering activity to particular locations or operators is, in essence, “authorization” under PASPA. However, our determination that such a selective repeal of certain prohibitions amounts to authorization under PASPA does not mean that states are not afforded sufficient room under PASPA to craft their own policies.”

But the Court did not illustrate any meaningful options that a state has, other than to repeal its prohibitions on sports betting to the extent that they prohibit small bets between family and friends.  This is not an economically meaningful option, nor is stopping small bets among friends and family members a law enforcement priority.  “We need not, however, articulate a line whereby a partial repeal of a sports wagering ban amounts to an authorization under PASPA, if indeed such a line could be drawn. It is sufficient to conclude that the 2014 Law overstepped it.”

In dissent, Judge Julio Fuentes, the author of Christie I, concludes that the state’s repeal comports with the Court’s direction in Christie I and is therefore not a violation of PASPA.  He opined that there is a meaningful legal difference between authorizing and repealing and that New Jersey’s law does not grant any permission to anyone to do anything; instead it is a “self-executing deregulatory measure.”

Judge Thomas Vanaskie authored a separate dissent, arguing that PASPA is unconstitutional.  In probably the most powerful language anywhere in the majority or dissent, Judge Vanaskie states:

This shifting line approach to a State’s exercise of its sovereign authority is untenable. The bedrock principle of federalism that Congress may not compel the States to require or prohibit certain activities cannot be evaded by the false assertion that PASPA affords the States some undefined options when it comes to sports wagering.

Judge Vanaskie concludes that PASPA was intended to have the states implement a federal legislative program, and is, therefore, unconstitutional.

It remains to be seen whether New Jersey will seek certiorari from the US Supreme Court or try another means of repealing, or whether these decisions lead to a federal dialogue on a solution to sports betting.  With a multi-billion dollar unregulated and untaxed sports betting market in the United States, and a federal statute that dates back to before the prevalence of internet wagering, it is probably time to consider whether the status quo remains the best option.

 

 

 

Repealing vs Authorizing, Part 2 – The Third Circuit’s Hearing on Sports Betting

Today marked another installment in New Jersey’s efforts to implement sports betting at its casinos and racetracks. The United States Court of Appeals for the Third Circuit heard an en banc argument in NCAA v. Christie.  This is the third time that the question of sports betting has been in front of the Third Circuit in the last several years, with the sports leagues winning the last two battles.

To simplify, the Professional and Amateur Sports Protection Act (“PASPA”) prohibits a state from, including other things, “licensing” or “authoriz[ing] by law” sports betting.  It does not prohibit sports betting in its own right.  New Jersey initially challenged the constitutionality of PASPA, arguing that it violated the Tenth Amendment of the United States Constitution.  The Court of Appeals disagreed, holding that PASPA gave the states a choice between continuing their existing criminal prohibitions on sports betting or repealing those prohibitions.  While an unattractive choice, the Court reasoned, it was not a circumstance where a state had no choice at all, which would violate the Tenth Amendment.

Acting on this, New Jersey then partially repealed its prohibitions on sports betting to the extent that they applied to casinos, racetracks, and former racetracks.  After a challenge by the leagues, the courts concluded that this narrow repeal amounted to authorizing sports betting by law, which was prohibited by PASPA.

Today the Court focused on two issues:  how much of a repeal is necessary before the repeal no longer constitutes an authorization by law, and is PASPA constitutional on an overall basis.  The state’s argument is that the limited repeal, because it is a repeal and not an affirmative act, is consistent with PASPA.  The leagues conceded that PASPA gives the state more than two options and the DOJ noted that states could “tinker” with their sports betting provisions.  One example that the leagues stated would comply with PASPA is a repeal of state criminal laws to the extent that they prohibit bets of under $1,000 between acquaintances on sporting events.  The question the court struggled with is where, then, is the line – if some partial repeal complies with PASPA, how much of a repeal is necessary?  There was no clear answer at the end of the hearing.

The other question raised by the Court is whether the constitutionality of PASPA should be revisited.  Several judges had questions about whether PASPA, as construed, essentially commandeers the states and forces them to implement a federal policy.  While many thought this issue was closed after Christie I, several judges seemed interested in it today.

It’s always difficult to tell where a court may be headed, but it seems that the Court had more difficult questions for the state than for the leagues.  That said, there seems to be three camps on the Court:  those who believe PASPA is unconstitutional (and thus NJ gets regulated sports betting);  those who believe PASPA is constitutional but NJ has complied with PASPA in its partial repeal (and thus NJ gets unregulated sports betting in casinos and racetracks) and those who believe PASPA is constitutional and that NJ’s partial repeal violates it (and thus no sports betting).  How the votes ultimately shake out, and whether there is a compromise position, may make the result of this case interesting indeed.

NJ Gets Another Chance In Sports Betting Litigation

Three sentences set the sports betting world afire this morning when the US Court of Appeals for the Third Circuit issued an order granting New Jersey’s petition for rehearing en banc in the most recent round of sports betting litigation.  In simple terms, this means that the case will be heard anew by the active judges of the Third Circuit plus the two senior judges who participated in the case – the final count will be an oral argument in front of a total of about 11 judges at once – more than the Supreme Court.

As we’ve covered here, this case centered around what it means to “authorize.”  Previously, New Jersey challenged the constitutionality of the Professional and Amateur Sports Protection Act (“PASPA”) on the grounds that it commandeered the states to maintain a federal prohibition.  As has been written before, PASPA does not prohibit sports betting – it prohibits a state from authorizing sports betting by law.  But the courts found PASPA constitutional because it gave the states a choice:  keep sports betting prohibitions in place, or repeal them.  That choice saved the constitutionality of PASPA.  New Jersey, seizing on this language, partially repealed its prohibitions on sports betting.  The sports leagues argued that  partial repeal amounts to an “authorization,” which violates PASPA.   The court agreed.

Judge Julio Fuentes wrote the court’s 2013 opinion on constitutionality – finding the statute to be constitutional.  He was again on the panel in 2015.  This time, he dissented, writing that a partial repeal was permissible under PASPA because there is a difference between authorizing and repealing.

The Court of Appeals grants rehearing en banc when either a question of exceptional importance is involved or is there is a need to reconcile precedents of the court.  Needless to say, Judge Fuentes’ view that the 2015 opinion was not consistent with the 2013 opinion probably triggered some of the judges on the court to want to take a close look at the consistency of the two cases.  It is also the case that a prior precedential opinion of the Court can only be overruled en banc – so it is possible that the Court wants to take a closer look at the constitutionality of PASPA as addressed in Christie I.  There is no guarantee, however, that the Court will reach a different result this time around.  Because rehearing en banc has been granted, however, the court’s August 2015 opinion is vacated.

The fact that the court granted en banc review does mean that some of the judges may be inclined to reach a different result.  The logic there is that if the judges were satisfied with the result, they would have simply let the underlying decision stand.  That too is no guarantee of a different result – they may, after examination, reach the same result but based on different reasoning.  Of course, the en banc review could lead to a different result or to a modification of Christie I.

Thus far it is not known when the en banc hearing will be scheduled.  No new briefs will be filed.  Typically the Court schedules a number of en banc cases on the same day for convenience.  The case will be orally argued and voted on by the judges who hear it; one will be assigned to write an opinion, which will have to receive a vote of a majority of the judges who hear the case in order to become the opinion of the court.

One thing is clear – unless rehearing was granted, New Jersey’s only remaining shot under the partial repeal legislation was the extremely unlikely chance that the Supreme Court would take the case after once declining to do so.  New Jersey’s chances of success have increased significantly as a result of this order.

 

 

Third Circuit Continues NJ Sports Betting Prohibition

In a much anticipated, closely watched decision, today the US Court of Appeals for the Third Circuit held that New Jersey’s 2014 efforts to implement sports betting at casinos and racetracks violates federal law.  The 2-1 majority decision was authored by Judge Marjorie O. Rendell joined by Judge Maryann Trump Barry; Judge Julio Fuentes dissented.

How did we get here?   The federal Professional and Amateur Sports Protection Act (PASPA), enacted in 1991, prohibits states from authorizing sports betting.  In 2012, New Jersey challenged the constitutionality of PASPA, but the Third Circuit held that the statute was constitutional.   The Supreme Court declined to hear the case.  Sports betting is a crime in New Jersey.  Seizing on language in the Third Circuit’s opinion, however, New Jersey enacted a statute in 2014 that simply stated that any state law that would prohibit sports betting at a casino or racetrack was repealed – i.e., that activity was no longer a crime.  It did not explicitly say that casinos or racetracks could offer sports betting.

The sports leagues, however, took the position that this limited repeal amounted to an “authorization” by another name.  And, “authorizations” are prohibited by federal law.  This dispute – what does it mean “to authorize” – is at the base of the decision that was issued this morning.

The court held:  “We conclude that the 2014 Law violates PASPA because it authorizes by law sports gambling.”  The court cited three reasons for its holding.  First, the court stated that absent the 2014 law, sports gambling prohibitions would apply to casinos and racetracks; therefore, repealing those prohibitions must amount to an authorization.  “The 2014 law provides the authorization for conduct that is otherwise clearly and completely legally prohibited.”

Second, the court stated that the selectiveness of the repeal – limited to racetracks and casinos – “constitutes specific permission and empowerment.”  The court distinguished its holding in the 2013 decision that saved the constitutionality of PASPA.  The court notes that “had the 2014 Law repealed all prohibitions on sports gambling, we would hard pressed…to find an ‘authorizing by law’ in violation of PASPA.”  In other words, the Court has essentially held that the only repeal that would pass  muster under PASPA is a complete repeal – i.e., allowing anyone in the state to offer sports betting.

Third, the court held that because Congress gave New Jersey one year to opt out of PASPA initially, Congress must have concluded at the time that sports betting in New Jersey casinos would violate PASPA.  “If sports gambling in New Jersey’s casinos does not violate PASPA, then PASPA’s one year exception for New Jersey would have been superfluous.”

Judge Fuentes – who wrote the Court’s 2013 opinion finding PASPA to be constitutional – dissented.  He notes that “the 2014 Law renders previous prohibitions on sports betting non-existent” and then criticizes the majority for taking issue with the “selective” nature of the repeal.  “As I see it, the issue is whether a partial repeal amounts to authorization.  Because this logic rests on the same false equivalence we rejected in Christie I, I respectfully dissent.”

Judge Fuentes notes that to repeal a statute is to make it as though the statute never existed.  “A partially repealed statute is treated as if only the remaining part exists…after the repeal, it is as if New Jersey never prohibited sports gambling in casinos, gambling houses, and sports racetracks.”    How, therefore, Judge Fuentes asks, can a repeal be an authorization?

Judge Fuentes says that there is no explicit grant of permission under the statute for anyone to engage in sports betting.  Second, Judge Fuentes argues that there is a logical flaw in the argument:  if withdrawing some prohibitions amounts to an authorization, then withdrawing all prohibitions must also amount to an authorization, which means that New Jersey has no choice at all, which means that PASPA is unconstitutional.  This is particularly striking reasoning from the author of the 2013 decision holding PASPA to be constitutional.

It remains to be seen whether New Jersey will seek review in the Supreme Court, or whether some other legislative solution – either on the state or federal level – may be forthcoming.  For now, though, New Jersey will still not be able to offer sports betting in its casinos and racetracks.

Latest PA Internet Gaming Bill Goes Beyond Internet Gaming

As my colleague Eric Frank previewed here, a bill has been introduced in the Pennsylvania Senate regarding internet gaming.   The latest bill, SB 900, was introduced on June 9 sponsored by Senators Ward, Tomlinson, Vogel, Scarnati, Bartolotta, and Stefano.  The bill goes beyond just internet gaming, though, and it remains to be seen whether this bill is the result of a compromise among various interests or is too broad to pass.

Internet Gaming

As with the several other bills we have covered, this bill would allow Pennsylvania casino licensees to offer internet gaming.  However, Category 3 facilities – the two smaller facilities (Valley Forge and Nemacolin) that are part of resorts – would not be authorized to offer internet gaming.  An internet gaming permit would have a $10 million fee attached with a $1 million renewal due every five years.

Servers used for internet gaming must be located within the casino’s facility in a secure space; there is no provision for the use of off-site data sites, except for back-up servers which may be located at another site in Pennsylvania only.  Platform and software providers would have to be licensed by the PGCB as a manufacturer.

Gross internet gaming revenue would be taxed at 54%.

Interestingly, if a person lives within 20 miles of a casino that offers internet gaming, that person must open an account in person and may not do so online.  If implemented, this would be unique to Pennsylvania, as other internet gaming states allow accounts to be opened online regardless of the proximity of a patron to a facility.

But Wait – There’s More

This bill contains two key provisions that would significantly alter the dynamic of land-based casinos in Pennsylvania.  The first change would be to Category 3 casinos.  These casinos are not open to the general public unless a patron either utilizes other amenities of the resort, such as restaurants or hotel rooms, or purchases a membership.  Needless to say, this requirement affects the number of customers who might visit a Category 3 facility.  This bill would allow Category 3 facilities to escape the membership requirement, provided that the casino pays a fee of $5 million if the facility is located in a first through third class county and $2.5 million in any other county.  This would significantly change the dynamics of Category 3 casinos.

Second, the bill allows the establishment of “nonprimary locations” and “ancillary facilities” – essentially, satellite casinos limited to 250 slot machines each.  Category 1 facilities (racetracks) would be allowed to open four such facilities each and Category 2 facilities would be allowed to open two.  There are geographic restrictions as to where these facilities may be opened – no closer than 20 miles to another facility, except for within the City of Philadelphia, where that restriction is 10 miles.  These facilities would have a $5 million license fee.  This, too, would change the overall dynamics of casino location in Pennsylvania.

It remains to be seen whether this legislation advances through the Senate, and how it will reconcile with the several bills that have been introduced in the House.

 

 

 

Oral Argument on NJ Sports Betting – What Does “Authorize” Mean?

Today’s oral argument in the United States Court of Appeals for the Third Circuit, on whether New Jersey’s partial repeal of its prohibitions on sports betting, repeatedly came around to one question:  what does it really mean to “authorize” something?  No clear answer was apparent by the end of the argument.

To put the importance of this concept into context, it’s important to look at the Professional and Amateur Sports Protection Act (“PASPA”).  That statute makes it unlawful for a governmental entity to “sponsor, operate, advertise, promote, license, or authorize by law or compact” sports betting.  New Jersey’s first challenge to PASPA was its constitutionality – that it violated the Tenth Amendment to the United States Constitution because it commandeered the legislative power of the state.  The courts rejected that challenge, finding that the state was not commandeered because “we do not read PASPA to prohibit New Jersey from repealing its ban on sports wagering” and determining “what the exact contours of the prohibition will be.”

Against this backdrop, New Jersey repealed its criminal sports betting prohibitions to the extent that they prohibited sports betting at casinos, racetracks, or the sites of former racetracks operational within the last fifteen years.  The sports leagues sued, claiming that this partial repeal amounted to an authorization of sports betting at these facilities – which are heavily regulated by the State already.

Today’s argument centered around that point-  what does it mean to authorize, and is there a distinction between authorizing something and repealing a prohibition on it?  The state argued that it was simply following the Third Circuit’s prior decision that said that the state was free to set the contours of its prohibition on sports betting.  The state also argued that there is a distinction between authorizing something by law and repealing a criminal prohibition on that activity.  Former Solicitor General Theodore Olson, on behalf of the state, said that the Court’s prior opinion said that to “authorize” requires some affirmative act, but the panel seemed to suggest that that statement was dicta and the precise question of whether authorizing requires an affirmative act was not before the Court at that time.

Interestingly, Judges Rendell and Fuentes observed that of all the things prohibited by PASPA, “regulating” is not one of them.  Judge Fuentes suggested that if the state prevails in this case, perhaps the state could still regulate sports betting and be consistent with PASPA, rather than have sports betting operate in an unregulated space.

Former Solicitor General Paul Clement, on behalf of the Leagues, also confronted the question of what it means to authorize, with Judge Rendell pressing him on whether “authorizing” required the implementation of some sort of scheme, or required the state to do more than just repeal a prohibition.  The leagues cited to the legislative history of PASPA, saying that Congress was concerned with stopping casino-style sports betting, and that New Jersey’s partial repeal does exactly that.  The leagues argued that a partial repeal that keeps the vast majority of the statute in place amounts to a state authorization.  Judge Fuentes asked how far the repeal had to go in order to comport with PASPA.  The leagues argued that the repeal cannot be limited to just a few licensed venues in the state.  The leagues suggested that it would be acceptable to repeal the sports betting prohibition to permit wagers under $100, limited to family members or acquaintances.  The leagues further suggested that at least half of a statute needs to be repealed in order for it to be a true partial repeal rather than an implicit authorization.

Despite the thorough, spirited argument, it was very difficult to predict which way this decision might go.  Each side can probably point to different comments by the panel to suggest leanings, but we won’t know the final outcome until the decision comes out – probably in several months.

 

NJ Congressmen Introduce Federal Sports Betting Legislation

In another effort to allow New Jersey’s casinos and racetracks to offer sports betting, two New Jersey Representatives have introduced two bills in Congress that would modify PASPA.

The first, H.R. 416, sponsored by Rep. Frank A. LoBiondo (R-2),  would modify PASPA to allow all states a four-year window in which to modify their own state’s law to allow sports betting.  The second, H.R. 457, sponsored by Rep.  Frank Pallone (D-6), would exempt New Jersey from the provisions of PASPA to the extent New Jersey chooses to exempt itself from PASPA.

Both bills have been referred to committees.  It remains to be seen whether these bills will ever receive committee hearings or considered on the floor of either house; however, it is true that very few of the bills actually introduced in Congress are enacted into law in any given year.

Court Issues TRO Against California Tribe’s Online Bingo Efforts

Following up on our coverage here, on December 12 the US District Court for the Southern District of California issued a temporary restraining order against the IIpay Nation of Santa Ysabel’s internet bingo system.  The Tribe’s system sought to offer online bingo to customers located off of tribal lands.  Both the State of California and the DOJ have sued.  California has moved for an injunction, and it was only California’s request that the Court has acted on. California argued that the Tribe’s online bingo platform violates both the tribal-state compact and UIGEA.

The Court found that California has a likelihood of success on the merits of both of these claims.  As to the tribal-state compact claim, the Court analyzed whether the online bingo was considered Class II or Class III gaming under the Indian Gaming Regulatory Act.  IGRA defines bingo as a Class II game, and Class II games are regulated by the National Indian Gaming Commission and can be operated by a tribe without a tribal-state compact.  However, other gaming is Class III gaming and is allowed only under compact. The Tribe argued that its online bingo was a Class II game – bingo – using a technological aid.  The court noted that there is an analytical distinction between a technological aid for a Class II game or an “electronic facsimile” of a game – which would make the game a Class III game.  The Court rejected the tribe’s argument that online bingo constitutes a technological aid for a Class II game, instead concluding that the game being offered by the Tribe is a Class III game, which is not permitted by compact.

The Court concluded that although the breach of compact claim was enough to demonstrate that the state had a likelihood of success on the merits, it would still analyze UIGEA.  The Court noted that UIGEA requires consideration of the law both where a bet is made and where it was received.   The Court concluded that Indian gaming is permitted only on Indian lands, and therefore, reaching outside Indian lands would violate UIGEA.

The Court therefore enjoined the Tribe from offering any gambling game to anyone over the internet who is not present on the Tribe’s lands.  The Court further ordered the parties to confer as to expedited briefing as to whether a full preliminary injunction should be granted.

DOJ Seeks UIGEA Injunction Against California Indian Tribe

In early November 2014, the Iipay Nation of Santa Ysabel, an Indian tribe in California, began offering internet bingo over a website to patrons age 18 and older, regardless of whether they were located on tribal lands.  The State of California sued, claiming that the authority to offer online bingo off of tribal lands was not within the scope of the compact between the tribe and the state, was not permitted under California law, and violated UIGEA.  The tribe has stated its intention to expand beyond bingo and into poker.   The tribe has justified its activities by stating that it is authorized by IGRA to offer and regulate Class II gaming (poker and bingo) from its tribe.

Today, the Department of Justice filed its own lawsuit against the tribe, alleging that the tribe is violating UIGEA and seeking an injunction.  The DOJ argues in its complaint that the tribe is necessarily “engaged in the business of betting or wagering,” which is a UIGEA predicate.  As a result, the DOJ argues, when someone places a wager from outside tribal lands, the tribe is participating in “unlawful Internet gambling” as defined in UIGEA.  The DOJ argues that lotteries and bingo games are prohibited by California law unless authorized for charitable purposes, and that the bingo offered by the tribe is not a bingo game authorized for charitable purposes.  Accordingly, according to the DOJ, because the tribe’s gaming activities are not authorized by law, any gaming activity that crosses tribal lines violates UIGEA.

Because UIGEA relates primarily to payment processing, the DOJ seeks an injunction prohibiting the tribe from accepting any credit, EFTs, checks, or proceeds of other financial transactions to be used in any online bingo account by any patron.

This matter could ultimately be consolidated with the State of California’s lawsuit.  That case is set for a hearing on California’s motion for a temporary restraining order today (12/4) at 2:00pm Pacific.

Series Of Bills Introduced Regarding AC’s Future

New Jersey’s political and business leaders have been engaged in vigorous discussion lately about the future of New Jersey’s gaming industry and Atlantic City in particular.  Yesterday, New Jersey Senate President Stephen Sweeney introduced several bills as part of these ongoing efforts to address the transitions in Atlantic City and New Jersey’s gaming industry.  I’ve summarized each of them below.

S2572 – Major Changes to Casino Property Taxes

Atlantic City’s casinos pay the lion’s share of property taxes, and those property taxes are calculated based on the assessed value of the property.  Over the last several years, many casinos have successfully appealed the assessed value of their properties, based on the downturn in Atlantic City’s gaming market.  As a result, the amount of tax dollars paid to the City of Atlantic City (which then must distribute a share to the School District and Atlantic County) has declined.

S2572 would dramatically change the property tax structure for Atlantic City casinos.  First, the bill provides that every casino property in Atlantic City is exempt from traditional property taxes.  Instead, the casinos will be organized into the Casino Operator’s PILOT Council (PILOT standing for Payment In Lieu Of Taxes).  The members of the Council will agree to make a PILOT payment to the City of $120 million in 2015, and adjusted for inflation thereafter.  However, if annual gross gaming revenue is between $2.6 billion and $3 billion, the PILOT increases to $130 million; $150 million if revenue is between $3 billion and $3.4 billion; and $165 million if revenue is between $3.4 billion and $3.8 billion.  If revenue falls below $2.2 billion, the amount will be proportionally decreased.

Each casino’s share of the payment is to be calculated by a formula that takes into account, in equal parts, (a) the amount of land in acres owned by the casino; (b) the number of hotel rooms and (c) the property’s gross gaming revenue.  For 2015 and 2016 only the casinos will be obligated to pay an additional $30 million per year.  If new casinos open or existing casinos close, the formula will be adjusted to reflect that.

S2573 – Mandatory Health Benefits for Casino Employees

S2573 is a short bill requiring that a casino licensee submit proof to the Division of Gaming Enforcement that “all agreements it has entered into with each majority representative of its employees for collective bargaining purposes provide for suitable health care benefits and suitable retirement benefits for all full-time employees covered by such agreements.”

A casino that fails to do so would be subject to license revocation.

S2574 – Aid to Schools

S2574 would create a new form of state aid called Commercial Value Stabilization Aid.  This aid would be made available to the Atlantic City school district.  If the Commissioner of Education determines based on a needs assessment that the aid is warranted, then the Commissioner can authorize state aid to defer the school portion of the municipal tax levy.  This aid would only be available until such time as assessed values in Atlantic City return to the levels they were at in 2008.

S2575 – Reallocation of Investment Alternative Tax

In addition to an 8% gross revenue tax, Atlantic City casinos pay 1.25% of gross gaming revenue to the Casino Reinvestment Development Authority (CRDA).  Until 2011, the funds collected by CRDA were used to invest in various projects around the state.  Since that time, the funds are to be used exclusively to fund projects in Atlantic City.  This bill would reallocate all CRDA funds paid by casinos to the City of Atlantic City for the next 15 years and would require that the City use those funds exclusively to pay down its municipal debt.

S2576 – Elimination of the Atlantic City Alliance

The Atlantic City Alliance is a non-profit corporation funded by the casinos to serve as a public-private partnership to market Atlantic City.  This bill would essentially eliminate the Atlantic City Alliance.

It remains to be seen whether any of these bills will pass and what other ideas may become part of the discussion.  Each bill would have to pass both the Assembly and the Senate by the end of the 2015 legislative year, and be signed by Governor Christie, in order to become law.