Gaming doesn’t pay its fair share, Neal testifies

Erin Neff

Wednesday, March 14, 2001 | 11:15 a.m.

CARSON CITY -- Gaming executives came to Tuesday's Senate Taxation Committee armed with economists, a bound 41-page study with color graphs and some of the industry's biggest guns at the ready.

Sen. Joe Neal, D-North Las Vegas, came with a small brown folder of newspaper clippings and graphs; he alleged gaming doesn't pay its fair share and should have no problem supporting a 4 percent increase in the gaming tax paid by the industry.

Neal also alleged that any recent drop in casino revenues could be a result of "skimming," as the Gaming Control Board has a mechanism to count the amount of money in slot machines.

"I believe, as a regulator, those are words to me that are fighting words," said Bill Bible, president of the Nevada Resort Association and former chairman of the Gaming Control Board.

Thus began another round in the ongoing battle between Neal and the industry over gaming revenues.

The committee heard hours of testimony Tuesday afternoon on two of Neal's proposals. One, Senate Bill 105, would raise the gaming tax from 6.25 percent to 10.25 percent. Senate Bill 104 is a safe measure in the event SB105 doesn't get anywhere. That bill would require the secretary of state to place an advisory question on the ballot regarding how much voters want to raise the tax -- by 2 percent, 4 percent or 6 percent.

Neal has attempted to raise the tax on gaming revenues for years, either through his position as a legislator or through the citizen initiative process.

On Tuesday Neal said the 46 million tourists drawn to Nevada each year tax local hospitals, roads and police services.

His proposal wouldn't affect the average tourist because it wouldn't tax goods, services or rooms, he said.

But Mark Dodson, chairman of the Nevada Resort Association and an executive with Park Place Entertainment, said Neal's analysis failed to take into account the tax burden casinos already carry in Nevada.

Dodson said roughly 24 percent to 30 percent of a casino's profits go toward paying state taxes. When casinos upgrade their facilities and market their products because of growing competition nationwide, more profit is consumed, he said.

Neal's tax would force casinos to pay 40 percent to 50 percent of their profits to state taxes, he said.

"If SB105 would have been in place three years ago, we would have never built Paris (Las Vegas)," Dodson said.

No vote was taken on either measure.