Borgata Casino and New Jersey reach tax appeal settlement

Jersey has agreed to pay $72 million Atlantic City's Borgata casino to in order to settle a long-running tax dispute.

Jeff Chiesa, former U.S. senator and New Jersey attorney general, announced that this payment was less than half the amount the city owed the casino from a series of successful tax appeals between 2009 and 2015 filed by the operator. Atlantic City was unable to pay the full $165 million it owed the Borgata, so the casino dropped pending appeals between 2013 and 2015 which could have added another $65 million to the total the city owed.

"The settlement took both sides working closely together to find common ground," said Chiesa.

The debt is rooted in the continuing reduction of Atlantic City's casino industry, which has seen five of its 12 casinos shut down since 2014 due to a wave of competition from casinos in Pennsylvania. Due to the sudden lack of business, Atlantic City's casinos were able to successfully argue that their property tax assessments were too high and won a series of appeals over the years.

Chiesa was appointed by Republican Gov. Chris Christie to oversee Atlantic City's finances.

"The city administration, despite all the time and opportunity given to them, failed to accomplish this goal as they have with so many others," Christie comments."This agreement saves $30 million more for taxpayers than what Atlantic City had anticipated settling for under its five-year plan."

MGM Resorts International agreed to accept less to settle the case in order to help Atlantic City as a whole.

"With this agreement we are assured the relative certainty of payment, and the avoidance of additional cost and time related to further litigation," said John McManus, Executive Vice President of MGM Resorts. "MGM Resorts and Borgata believe this was the right deal for all parties concerned and is in the best interests of MGM's shareholders."