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Atlantic City Owes Borgata $62 Million

Tuesday December 22,2015 : ATLANTIC CITY COULD BE BANKRUPTED BY BORGATA TAX REFUND
 
City unable to pay the $62 million it owes casino company.
 
The Borgata gambling company in Atlantic City moved quickly on Monday after the city defaulted on a tax refund payment due Sunday, filing a request  that the courts enforce an earlier order for the city to pay a $62 million tax refund or face bankruptcy and the possible seizure of assets.
 
Monday's court filing asks the judge to order Atlantic City to pay up within 30 days.
 
The Associated Press news agency reports that the refund was ordered by a tax court that found the city had assessed the casino's property at too high a level over the tax years 2009 and 2010, given Atlantic City's declining gambling market. Better off playing online.
 
Atlantic City Mayor Don Guardian has said the city can't afford to pay that all at once, and the city could be forced into bankruptcy if it is ordered to do so.
 
The situation could worsen, too - Borgata senior vice president Joe Lupo claims that including refunds already ordered for other tax years, Atlantic City owes his company more than $150 million.
 
"We are simply asserting our rights as a taxpayer to receive a refund of overpayments," he told the Associated Press. "We are also disappointed that the city is focusing solely on us its attempt to resolve the situation. Atlantic City has paid refunds to every other (casino) property - except Borgata."
 
AP explains that the city's situation follows the decline of Atlantic City's casino market since the first casinos opened in neighbouring Pennsylvania in 2006, when the city's gambling market was worth $5.2 billion. It has since fallen to $2.7 billion last year, and will be lower than that this year. Four of the city's 12 casinos went out of business last year
 
Casino companies now challenge city property tax assessments, often successfully.
 
"The city is already under the supervision of a state-imposed emergency manager, and a financial assistance package passed by the Legislature and awaiting Gov. Chris Christie's signature would hold $60 million in aid hostage until the city passes a fiscal recovery plan the state deems acceptable," AP notes.
 
The Borgata is Atlantic City's top-earning casino; for the first 11 months of this year, it has taken in nearly $683 million, about twice as much as its closest competitor, Harrah's.



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