New Jersey’s $30 million settlement with Atlantic County over the PILOT (Payment In Lieu Of Taxes) program may have ended a legal dispute, but it opened a much larger debate—one that every jurisdiction with a growing iGaming sector should pay attention to.
Originally crafted to stabilize Atlantic City, the PILOT program was always a delicate compromise between casino industry relief and local government funding. The 2021 amendment, which excluded online gambling and sports betting revenues from the tax formula, fundamentally shifted that balance. Yes, it offered relief to casinos struggling post-pandemic—but it also left counties like Atlantic with less funding for services their residents rely on.
The state’s argument was rooted in pragmatism. The digital gaming boom—especially during lockdown—altered revenue streams. But as a result, the tax burden shifted again to local taxpayers.
From a policy standpoint, this case highlights a growing disconnect: regulatory frameworks born in a pre-iGaming era are now clashing with a fast-evolving industry. As online gambling becomes central—not supplemental—to operator income, the old rules no longer apply.
If regulators want to support both healthy public finance and sustainable gaming markets, they’ll need tools more nuanced than PILOT. Digital revenue needs digital-era tax policy—smart, fair, and future-facing.
Otherwise, this won’t be the last “settlement” we see.
