Casino tax breaks decried

By Liz Benston (contact)

Thursday, Sept. 29, 2005 | 11:09 a.m.

Virginia congressman and longtime casino foe Frank Wolf sent a letter to President Bush criticizing the administration's plan to offer tax incentives to casino operators on the Gulf Coast.

But the casino industry's top Washington lobbyist is firing back, saying casinos should be treated like "any other business."

Rep. Shelley Berkley also criticized Wolf's effort to carve casino companies out of any incentives the federal government may provide to speed up rebuilding Southern Mississippi.

The tax incentives would be created as part of a so-called Gulf Opportunity Zone that would encourage all businesses to rebuild Mississippi's Gulf Coast, ravaged in the wake of Hurricane Katrina.

"This special interest incentive would be a disgrace," Wolf (R-Va.) said in his letter. "With budget deficits growing to historic levels, we need to make sure tax dollars are going to those who truly need the government's help ... We trust you will do the right thing and make sure federal resources go to the poor, the needy and the vulnerable and not the gambling interests who already have insurance to cover catastrophic events like hurricanes."

Wolf cited a recent article in the Washington Post estimating that MGM Mirage's tax break under the plan could be as high as $50 million on uninsured damages of $100 million. In Mississippi, casinos haven't received tax breaks or other special economic incentives in the past. The casinos haven't needed such enticements and are ready to rebuild again without them, Wolf said.

Frank Fahrenkopf, chief executive of the American Gaming Association, said it's true that casinos haven't received special breaks in the past. Other businesses besides casinos also haven't been recipients of tax incentives, he said.

But no type of businesses has been excluded from federal legislation designed to help a region recover from a catastrophe, he said. Other large industries, such as oil and defense businesses, also shouldn't be left out, he said.

For example, New York hasn't excluded any types of businesses from the economic development zone it created in the wake of the 9-11 attacks, Fahrenkopf said.

Casinos in the Gulf employed more than 15,000 workers, more than any other industry in the Gulfport-Biloxi region.

"We are the engine of the economy there," Fahrenkopf said. "If the goal of creating an economic opportunity zone is to get businesses running and people back to work, it's counterintuitive that they are not going to include the largest employer."

Casinos wouldn't receive any tax incentives for payments already covered by insurance, he said.

"There is going to be a gap between what's covered by insurance and what's not," he said.

Congress should not punish casino companies by leaving them out of potential tax-breaks for businesses recovering in the Gulf Coast, Berkley said today.

"Congress must not withhold incentives to rebuild from any employer that provides good jobs and tax revenue, if we want to revive the economy of this region," Berkley said on the House floor. "Contrary to the biased view of some, the gaming industry must be treated as fairly and equally as any other business when Congress develops legislation to help the Gulf Coast region rebuild."

Wolf's letter was co-signed by Reps. Christopher Shays (R-Conn.), Lucille Roybal-Allard (D-Calif.), Joseph Pitts (R-Pa.), Walter Jones (R-N.C.), Lee Terry (R-Neb.), Tom Osborne (R-Neb.), Bob Inglis (R-S.C.), John Hostettler (R-Ind.) and Dave Weldon (R-Fla.).

Wolf, who is morally opposed to gambling, has led congressional opposition to casino expansion for at least the past decade.

Sun Washington Bureau reporter Suzanne Struglinski contributed to this report