Borgata Fined for Underpaying iGaming Taxes in New Jersey
Date: 2024-09-06 Author: Alex Crawford Categories: CASINO
New Jersey officials have found that the Borgata Hotel Casino & Spa, the largest casino in Atlantic City, underpaid its online gaming taxes twice. The casino was found to have mistakenly taken advantage of nearly $15 million in tax credits, far exceeding its intended tax credits.
Borgata Ordered to Pay Back Taxes
The New Jersey Department of Gaming Enforcement (DGE) found that the casino was underpaid by more than $1.1 million in taxes. As a result, the Borgata was ordered to pay the outstanding amount, plus accrued interest and a $75,000 fine. The total amount of the payments was $1.3 million.
A letter sent to the casino from Acting DGE Director Mary Jo Flaherty made a point of highlighting the seriousness of the violation. Flaherty explained that the initial error resulted in “an understatement of gross revenue by nearly $10 million,” while the repeat violation was more than $4.5 million.
Repeat Violation and Fines
This repeat violation comes less than 18 months after Borgata previously received a warning from the regulator. The DGE warned that repeat violations could result in fines.
The first violation involved improperly including bonuses in the calculation of tax credits in March 2023. Borgata mistakenly included nearly $10 million in bonuses from table games, even though the tax credits only applied to slot machines. This resulted in underpayment of taxes of $787,000, resulting in an accrual of $88,000 in interest and a $40,000 fine.
The second violation was discovered in July 2024 and involved a software update that resulted in an overpayment of tax credits. This resulted in a $365,000 back tax bill, plus $33,000 in additional interest and penalties.
Resolution and Company Response
According to authorities, the Borgata has paid the debt in full. However, neither the casino nor its parent company, MGM Resorts, would comment on the matter. At the same time, regulators confirmed that MGM had made the necessary software changes to prevent the errors from recurring.
Borgata Bomb Threat Incident
The Borgata was in the spotlight again in July when an anonymous man claiming to be a hotel guest claimed to have explosives and a firearm. This led to heightened security measures, including the arrival of SWAT teams and bomb squads. However, no explosives or weapons were found.
Meanwhile, MGM Resorts has increased the amount of its debt sale from $675 million to $850 million. The additional funds will be used for corporate needs and to pay down the company's debt.
