Atlantic County receives $15 million PILOT settlement from New Jersey

Atlantic County said it has received a $15 million settlement payment from the State of New Jersey, resolving a years-long legal dispute over changes to the state’s casino Payment-In-Lieu-Of-Taxes (PILOT) law.

The settlement stems from a lawsuit filed by the county over the 2016 PILOT law, which was amended in 2021 to exclude online gambling and sports betting revenues from gross gaming revenue calculations. The change reduced the payment pool for local governments, prompting the county’s legal challenge.

“We fought for more than seven years to make our county taxpayers whole,” Atlantic County Executive Dennis Levinson said in a statement. “With this settlement, Atlantic County will have received close to $59 million more than it would have had we not challenged the state over the PILOT legislation.”

The settlement was finalized on April 2 following discussions between Levinson and New Jersey Department of Community Affairs Commissioner Jacquelyn Suárez. The state had until August 1 to complete the $15 million payment.

Levinson previously estimated that the 2021 amendments cost the county around $14 million in lost revenue under the original PILOT terms.

“It was important to fight for what was rightfully ours,” Levinson said. “As the casinos and Atlantic City paid less in taxes, the remaining 22 municipalities paid more to make up the difference.”

The Atlantic City Council approved issuing $15.7 million in bonds to cover the settlement payment. John Lloyd, an attorney representing the state, said the city acted solely as “a pass-through for paying a settlement amount with no impact on the city’s budget.”

Levinson credited the Atlantic County Board of County Commissioners for their support during the lengthy litigation process, despite the legal risks involved.

“While some questioned whether we should continue to fight, they never waivered,” he said.

The settlement comes amid broader discussions about the state’s role in Atlantic City’s finances, including ongoing oversight under the Municipal Stabilization and Revitalization Act and the future of investment alternative tax funds.