Caesars pleads for tax relief

Monday, Sept. 4, 2000 | 9:51 a.m.

The Indiana Board of Tax Commissioners will hear Caesars Indiana's case for tax relief Nov. 14. The casino owner's request has met a stiff challenge from Harrison County officials, who argue it's unfair to other taxpayers.

Appeals of assessments by property owners who believe their land or improvements such as homes and barns have been overvalued for tax purposes are commonly requested and granted.

The county already has rejected Caesars' request for a 50 percent "economic obsolescence" deduction off a tax bill of about $551,000. Caesars justified the deduction - which is based on factors beyond the taxpayer's control - by saying unexpected events last year caused gambling revenues to fall below expectations.

Among the factors cited were drought and low water levels on the Ohio River, along with a collision with a barge that put the casino out of commission for two weeks, and required archaeological surveys that delayed construction of a nearby 500-room hotel.

The Glory of Rome riverboat is the world's largest. It is located on the Ohio River, about 14 miles downstream from Louisville, Ky.

"We determined we couldn't let them have it. It was just too much," County Assessor Paul Saulman said.

Caesars' request for tax relief was submitted to county officials five days after statewide gambling revenues for 1999 were made public. Caesars' gross revenues for the year totaled $157 million, lower than what some analysts expected.

Caesars' lawyers provided an extensive analysis to show the casino made far less money last year that it should have. Using boat capacities at Caesars, Argosy Casino at Lawrenceburg in suburban Cincinnati, and Empress Casino in Hammond on Lake Michigan, the lawyers multiplied the number of cruises to determine each casino's maximum potential admissions. They determined the "occupancy percentage" of each riverboat by dividing each boat's 1999 admissions by its maximum potential admissions.

The result, they wrote, is that Caesars had an occupancy percentage of 29 percent, compared with Argosy's 56 percent and Empress' 61 percent. Lost admissions totaled 4.4 million, the brief said, leading to a $32.8 million loss.

The facts justify the tax break, Caesars lawyer Stephen H. Paul said Friday. "The fact is the economic performance of the property is below what the investment in the property should have realized," Paul said.

Vonnie Stewart, the township assessor who calculated Caesars' property assessment early last year, said she is outraged that the casino operator is appealing. Local farmers were devastated by last year's drought but none in her area asked for a tax break on their assessments, she said.

Also, because southern Harrison County is almost entirely agricultural and residential property, Caesars' appeal could mean homeowners "take up the slack," Stewart said.

"If they win the appeal, it's going to fall right back on us as homeowners and landowners . . . we're burdened as it is. Why should they be any different than us? They're there. They're making money."