New Jersey gambling regulators have discovered that the Borgata, Atlantic City’s top-performing casino, underpaid some of its internet gambling taxes by almost $15 million. This led to the casino paying $1.1 million less in taxes than it should have. The state Division of Gaming Enforcement found that the casino took more credits than it was entitled to, resulting in the underpayment. The Borgata has since been ordered to pay the full amount of taxes due, along with penalties and interest totaling $1.3 million. The casino has already paid this amount, including a $75,000 civil penalty.
The Division of Gaming Enforcement stated that this matter is being viewed as serious and that the casino’s conduct was repeated less than 18 months after a previous warning. In March 2023, the Borgata wrongly included $9.8 million in bonuses for table games in deductions that are supposed to be only for slot games, resulting in a tax underpayment of $787,000. In July 2024, a software upgrade by MGM, the parent company of the Borgata, resulted in an additional underpayment of taxes by deducting more credits than the amount of player bonuses awarded, leading to a $365,000 underpayment of taxes. The Borgata was assessed interest and penalties for both violations.
The credits in question are meant to relieve the casinos from paying taxes on free play given to customers once bonuses reach a certain level. In New Jersey, the first $90 million in promotional credit is taxed as part of gross revenue, but anything above that threshold is not taxed. The Borgata has made software fixes to correct the issues with deducting the credits incorrectly. Despite these financial missteps, the Borgata remains the top-performing casino in Atlantic City, having won more than $771 million from gamblers in the first seven months of this year, which is significantly ahead of its closest competitor.
The Borgata declined to comment on the matter, and its parent company, MGM Resorts International, did not respond to requests for comment. The casino has already paid the full amount of taxes owed, along with penalties and interest. The Division of Gaming Enforcement emphasized the seriousness of the situation, noting that the casino’s conduct was repeated after a previous warning. The Borgata was found to have underpaid taxes due to issues with deducting credits incorrectly, resulting in financial penalties for the violations.
Moving forward, the Borgata has made software fixes to correct the problems with the deduction of credits, ensuring that tax payments are accurate. Despite these missteps, the Borgata remains the top-performing casino in Atlantic City, leading in terms of revenue generated from gamblers. The casino’s financial success has not been greatly impacted by these tax underpayments, as it continues to outperform its competitors in the region. The Division of Gaming Enforcement will continue to monitor the Borgata and ensure compliance with tax regulations to prevent similar issues in the future.
