After a prolonged dispute between the Government of the state of New Jersey and MGM Resorts International, it became clear that Borgata Hotel Casino & Spa is to be granted with a tax refund estimated to $72 million. Currently, the venue is known as one of the most successful businesses on the territory of Atlantic City.
The Executive Vice President of MGM Resorts International John McManus, commented on the agreement, saying that thanks to the deal with the State’s Government MGM would be certain that the cash amount would be paid, and that the additional cost and time spent in terms of any further litigation would be avoided.
The two parties agreed that Borgata Hotel Casino & Spa is to drop all its pending appeals dated from the period between 2013 and 2015. Last year, MGM Resorts International managed to win a case filed against the excessive taxes it had been forced to pay through its Borgata Hotel Casino & Spa. Now, the settlement reached with the State’s Government would see the company get less than one half of the total of $165 million it is owed.
As mentioned above, the amount that is to be received by Borgata’s owners as a tax refund is estimated to $72 million and is aimed to cover all judgements and legal claims in the period from 2009 to 2015. Still, under the terms of the agreement, the gambling operator would be stripped of the opportunity to further pursuing similar tax appeals for the period between 2013 and 2015.
Currently, Atlantic City has faced certain difficulties, struggling with debts exceeding $500 million. This led to it increasing taxes imposed on its casinos in an attempt to raise as much cash as needed. Now, the settlement not only saves Atlantic City tens of millions of dollars, but also puts an end to one of the largest legal issues ever faced by the state.
The Governor of the state of New Jersey Chris Christie also confirmed of the agreement, saying that that the deal with MGM Resorts International would save $30 million more than Atlantic City had expected to settle as part of its half-year plan. Mr. Christie also explained that the settlement had been one of the matters of top priority for the state’s administration, which unfortunately, had failed to meet not only this specific goal but many others as well.
The Governor’s administration is expected to present more details on the ways Atlantic City intends to use in order to finance its $72-million payment to the Las Vegas-based company. Until now, previous tax cases ended with an agreement had been funded by using bond payments.
- Author
Daniel Williams
