The legal, regulated sports betting industry in New Jersey has been great for Atlantic City casinos and the state, but Atlantic City Mayor Marty Small, Sr. is not satisfied. His city does not receive direct tax dollars from sports betting and he wants that to change.

The Press of Atlantic City reported on Tuesday that Mayor Small expressed his frustration at a meeting of the city Taxpayer’s Association.

“In 14 months, New Jersey has overtaken Las Vegas as the No. 1 sports betting destination, and a lot of it has to with the success of Atlantic City and online,” Mayor Small said. “But we don’t get one penny. … That’s unacceptable.”

After the law was passed regulating sports betting last year, a second bill became law which set an additional tax on sports betting revenue. 1.25% of an Atlantic City casino’s sports betting revenue is earmarked for the Casino Reinvestment Development Authority (CRDA) for “marketing and promotion” of the city.

East Rutherford and Oceanport, home to racetracks, as well as their respective counties, also receive additional tax money because of that bill. The city gets a .75 percent tax, while the counties get .5 percent. According to the law, this money is for “economic development purposes, which shall include, but not be limited to, improvements to: transportation and infrastructure, tourism, public safety, and properties located on or near the racetrack.”

And there’s the difference that upsets Mayor Small. The tax that goes to Atlantic City is for “marketing and promotion,” effectively to be used to attract tourists, whereas the tax that goes to East Rutherford, Oceanport, and Bergen and Monmouth Counties goes straight into their coffers to directly benefit those locations.

For the first half of the year, the CRDA has received $1.14 million from sports betting taxes.

Mayor Small wants the sports betting tax to go toward property tax relief.

“In theory, it’s good to have advertising dollars for Atlantic City because it increases visitation, which, in turn, gets more people to spend money in Atlantic City,” Assemblyman Vince Mazzeo said. “But, we need to be looking at long-term sustainability, and we’re certainly open to ideas for long-term property tax relief.”

“Money generated in Atlantic City needs to stay in Atlantic City,” said Assemblyman John Armato, who is from the same district as Mazzeo.

Assemblyman John Burzichelli, who was one of the tax bill’s main sponsors, argues that the money is going to Atlantic City, just through a different channel. Other municipalities do not have bodies like the CRDA.

“Atlantic City is different,” he said. “The tax is getting to Atlantic City, it’s just going through the Casino Reinvestment Development Authority.”

The state government has raked over $36 million taxes from sports betting in a bit more than a year.

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