ATLANTIC CITY, N.J. -- New Jersey gambling regulators say Atlantic City's top-performing casino, the Borgata, underpaid some of its internet gambling taxes twice by taking almost $15 million more in credits than it was entitled to.

This resulted in the casino paying $1.1 million less in taxes than it was obligated to.

The New Jersey Division of Gaming Enforcement mandated that the casino pay all outstanding taxes, penalties, and interest, amounting to $1.3 million.

Additionally, the Borgata will be required to pay a civil penalty of $75,000, the state announced.

Government officials were unable to immediately confirm on Thursday whether the outstanding payment had been processed. However, a document published on the division's website stated that the tax underpayment “was rectified promptly in each instance.”

"The Division considers this a significant issue,” wrote Mary Jo Flaherty, acting director, in an August 15 letter to the Borgata. "The initial violation involved an underreporting of gross revenue by nearly $10 million. This subsequent underreporting of gross revenue exceeded $4.5 million.

“The fact that this behavior was repeated less than 18 months after the Division cautioned that another violation of this nature could result in a civil penalty must also be taken into account,” she wrote.

The Borgata declined to offer any comments on Thursday; its parent company, MGM Resorts International, did not respond to requests for comment.

In March 2023, the Borgata mistakenly included $9.8 million in bonuses, including table game payouts, in deductions designated exclusively for slot games. This resulted in a tax underpayment of $787,000. The casino was subsequently assessed nearly $88,000 in interest charges and almost $40,000 in penalties.

In July 2024, a software update implemented by MGM led to the deduction of a greater number of credits than the actual amount of player bonuses awarded. This resulted in an excess credit allocation of $4.5 million beyond what the casino was entitled to, and a $365,000 underpayment of taxes. As a result, the casino incurred over $15,000 in interest charges and more than $18,000 in penalties for this transgression.

The credit system is designed to exempt casinos from paying taxes on a portion of free play offered to customers once the bonus amount reaches a specific threshold. In New Jersey, the initial $90 million in promotional credit is subject to taxation as part of gross revenue. However, once this threshold is surpassed, any subsequent credits exceeding this amount are tax-free.

Regulators confirmed that the company implemented software fixes to resolve the issue.

During the first seven months of this year, the Borgata has accumulated over $771 million in winnings from gamblers, surpassing its closest competitor by over $300 million.

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