The New Jersey Division of Gaming Enforcement has accused the Borgata Hotel Casino & Spa of underpaying its taxes on online gambling by $1.1 million. The agency alleges that the popular Atlantic City casino failed to properly account for promotional credits given to customers who wagered on its online gambling site.
According to a recent report by the Press of Atlantic City, Borgata is said to have improperly deducted the value of promotional credits when calculating its gross revenue for online gambling taxes. This practice, known as “netting,” results in a lower tax liability for the casino.
The Division of Gaming Enforcement claims that Borgata’s use of netting resulted in an underpayment of $1.1 million in taxes from 2018 to 2020. The agency has ordered the casino to pay the outstanding amount, plus interest and penalties.
In response to the allegations, Borgata released a statement denying any wrongdoing. The casino maintains that its accounting practices were in compliance with New Jersey regulations and that it intends to challenge the Division of Gaming Enforcement’s findings.
This dispute over online gambling taxes highlights the complexities and challenges of regulating the fast-growing industry. As more states legalize online gambling, regulators are faced with the task of ensuring that casinos report their revenues accurately and pay their fair share of taxes.
For Borgata, the underpayment allegations could have serious financial implications. The $1.1 million in disputed taxes represents a significant sum for the casino, which has been hit hard by the COVID-19 pandemic and the resulting drop in tourism and gaming revenue.
The Division of Gaming Enforcement’s investigation into Borgata’s tax practices is ongoing, and the outcome of the dispute remains uncertain. However, the case serves as a reminder that even the largest and most reputable casinos are not immune to scrutiny and oversight by regulatory authorities.
