Monday, Feb. 16, 2004 | 11:49 a.m.
JACKSON, Miss. -- The state Tax Commission and the state Gaming Commission have conflicting definitions of gaming revenue, and lawmakers have been asked to intervene.
The state Tax Commission collects taxes on gaming, while the Gaming Commission regulates the industry.
"There shouldn't be a problem here, except that if we're approved to collect the taxes, we need to determine what the rules are," Tax Commission chairman Ed Buelow told the House Gaming Committee on Thursday.
The conflict stemmed from a promotion at the Beau Rivage casino called "Free Play." The Biloxi casino gives coins, which have no value outside of the casino, to customers as incentive to play slot machines. The patrons put up no money for the coins, but can win a payout on them.
According to state law, every dollar that is played at a casino, less payouts from a wager, is gaming revenue subject to taxation, said Kathy Waterbury, assistant deputy tax commissioner. Therefore, the Tax Commission contended the payouts on "Free Play" coins couldn't be used to reduce the amount of revenue they reported.
However, the Gaming Commission changed the regulation and allowed the "Free Play" chips to be considered a wager. A Harrison County Chancery Court decision upheld the Gaming Commission's rule.
Mississippi's gaming law is patterned after Nevada's. The Nevada Legislature also changed state law to give casinos a credit against "Free Play."
Buelow said Mississippi law needs to be clear on the issue.
Waterbury said the Legislature should address the discrepancy because it could eventually result in reduced revenues for the state as more casinos begin using the "Free Play" coins. No one estimated the revenue difference.
Gaming Committee Chairman Bobby Moak, D-Bogue Chitto, said lawmakers don't want that to occur.
"We're not in the business of raising anybody's taxes," Moak said. "But we're not in the business of losing revenue."
Andy Bourland, executive director of the Mississippi Gaming Association, a statewide trade organization for the industry, said the law should be left intact. He said the way Mississippi set up the regulatory system encouraged successful growth for the industry.
"Many casino companies in the state have already invested millions of dollars in similar types of 'Free Play' programs on their properties," Bourland said.
No Gaming Commission representative attended Thursday's meeting. Leigh Ann Wilkins, spokeswoman for the Gaming Commission, said the Legislature created the agency 10 years ago with authority over "specific matters."
"We have regulated Mississippi's casino industry in an exemplary fashion as the Legislature intended us to and the courts have agreed with our actions," Wilkins said.
Buelow also complained about delays Tax Commission workers occasionally experience while conducting audits at casinos.
He said the auditors are not immediately allowed into surveillance rooms to view whether casino employees are properly handling money. They are told by casino managers that only Gaming Commission auditors are allowed immediate access, Buelow said.
"We'll talk to the industry and the Gaming Commission about that," Moak said.
Joan Romph, director of marketing at Harrah's Casino in Tunica, said Gaming Commission regulations mandate that Tax Commission auditors get immediate access.
"I imagine most, if not all, casinos would have to follow those regulations," Romph said. "We definitely do."
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