Borgata in Atlantic City Underpaid its Online Betting Taxes by $1.1M

The Borgata in Atlantic City underpaid its online gambling taxes twice by taking almost $15 million more in credits than it was entitled to, leading to the casino paying $1.1 million less than it should have.

The Borgata in Atlantic City was ordered to pay all taxes due, including penalties and interest totaling $1.3 million

Additionally, the New Jersey Division of Gaming Enforcement (DGE) said Atlantic City’s top-performing casino was ordered to pay the full amount of taxes due. Penalties and interest totaled $1.3 million as well. The money has already been paid, including a $75,000 civil penalty, according to The Associated Press.

“The Division views this matter as serious,” the DGE’s acting director, Mary Jo Flaherty, wrote in an Aug. 15 letter to the Borgata. “The original violation was an understatement of gross revenue by almost $10 million.

“This second understatement of gross revenue was in an amount of over $4.5 million. The fact that this conduct was repeated less than 18 months after the Division warned an additional violation of this type could result in a civil penalty is also to be considered.”

For the first seven months of this year, the Borgata has won more than $771 million from gamblers, more than $300 million ahead of its closest competitor. The casino is now being closely monitored by the Internal Revenue Service (IRS), according to reports.

Last year, casino wrongly included $9.8 million in bonuses, including table games in deductions

In March 2023, the Borgata wrongly included $9.8 million in bonuses, including table games in deductions that are supposed to be only for slot games. This resulted in a tax underpayment of $787,000. It was assessed nearly $88,000 in interest and almost $40,000 in penalties.

Then in July 2024, a software upgrade by MGM resulted in deducting more credits than the amount of player bonuses that were actually awarded. As a result, it added $4.5 million in credits beyond what the casino was entitled to. It also led to $365,000 underpayment of taxes.

The Borgata was assessed more than $15,000 in interest and over $18,000 in penalties for this violation. The credits are meant to relieve the casinos from paying taxes on some free play given to customers. This only occurs once the bonuses reach a certain level.

In New Jersey, the first $90 million in promotional credit is taxed as part of gross revenue. However, once that threshold is passed, anything above it is not taxed. Regulators said the company made software fixes to correct the problem.