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April 18, 2014

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Casinos happily cash tax rebates

What Uncle Sam giveth in the form of tax rebate checks, Las Vegas casinos are happy to taketh away.

The first of 92 million federal tax rebate checks are in the mail. Over the next 10 weeks Americans will receive an estimated $38 billion from the U.S. Treasury -- up to $300 for singles, up to $600 for couples.

Casinos that routinely advertise paycheck cashing promotions are now gearing up to cash the rebate checks. This isn't a public service -- casinos hope that those cashing checks will gamble away and spend the funds in their establishments. But perhaps surprisingly, Las Vegas casinos aren't expecting a big windfall from the tax rebate checks and most aren't advertising promotions to cash them -- at least not yet.

Those casino companies that routinely cash payroll checks, such as Coast Resorts Inc., Station Casinos Inc. and Boyd Gaming Corp., say they're willing to cash the rebate checks even though they aren't promoting this service.

"We tried specific marketing messages to generate business during tax (refund) season, and we had no luck at all," said Rob Stillwell, spokesman for Boyd, the owner of the Stardust hotel-casino on the Strip and locals-oriented casinos such as Main Street Station, Sam's Town, the Eldorado and Joker's Wild.

"We develop relationships with these customers. If one of our customers belongs to our slot club, chances are we're already doing business with them, and they'll bring in their checks," Stillwell said.

National surveys suggest most Americans aren't planning to spend the money anyway. A poll conducted by ABC News and the Washington Post found that 34 percent of Americans planned to pay down debt, while another 30 percent planned to save or invest the cash. Just 21 percent said they planned to spend it.

Very few expect casinos will be able to get people to buck that trend.

Sebastian Sinclair, a gaming analyst with Christiansen Capital Advisors, noted that gambling revenues didn't keep up the same growth rate as the general economy in 2000.

"So while consumers had more discretionary income to spend, they allocated a smaller portion of it to gambling," Sinclair said. "The consumer pretty much has all the gambling they want. So I would expect very little impact."

Still, that isn't keeping some casino executives from trying.

One advertising for check rebate business is the Plaza hotel-casino in downtown Las Vegas. Cash your check there, and the Plaza will hand you a restaurant coupon -- $15 for a $300 check, $30 for a $600 check.

Plaza officials acknowledge they don't expect to see a huge increase in business from it. It's early, but as of Wednesday morning, only two rebate checks had been cashed there.

"I don't think we'll have a large number," Michael Nolan, general manager of the Plaza, said. "You try to keep your name out there, and this was just something to keep our name in front of the customer by giving them a meal."

One local that plans to take advantage of that is Jane Galbraith. The Las Vegas teacher expects a $182 rebate in late August, and she's already earmarked it toward a gambling junket. The Plaza's offer, she said, makes it likely she'd return to the casino to cash the check.

Her gambling trip has been in the works for 13 years.

When her grandson was 8, Galbraith agreed to a "gambling date" with him when he turned 21. Her grandson's 21st birthday is in September.

"It's owed to me, but it's 'found money,' I guess you could say," Galbraith said. "It comes at a perfect time for my grandson."

But most people at the Plaza, even the players, say gambling away the cash isn't in the cards. Like most Americans, most are planning to either stash away the money or use it to pay bills.

Anita Cottin, a St. Louis retiree, said she makes trips once or twice a week to the casinos ringing that city. But she's not planning a big gambling spree with this cash.

"Only when I come to Vegas (do) I splurge a little," Cottin said. "Who knows, maybe it will happen. But right now I'm going to save it."

And those who gamble infrequently, such as Mike Leslie, say this won't change their habits.

"It'll go in the bank ... we work too hard for our money," the Las Vegas construction worker said. "If you're a gambler, $600 isn't going to be a special treat. I'm sure they'll blow it."

Anthony Curtis, publisher of the Las Vegas Advisor newsletter, said promotions targeting the rebate checks are a good idea.

"It's just an extension of cashing your paycheck, and it might be even better, because people might consider this total 'mad money,' " Curtis said. "It's pretty creative thinking, and it's thinking real fast, and casinos don't usually think that quick. I think they'll get some people in the door to play."

But then again, Curtis is a professional gambler -- and his newsletter makes its name by sniffing out the best deals for gamblers.

"It stuns me why anyone would ever cash a paycheck in a bank. What are they going to give you, a pen?" Curtis said. "If you're controlled enough to walk out with what you've got, the least you'll get is a cocktail (at a casino)."

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