CARSON CITY, Nev. (AP) — An initiative to raise the top tax rate on Nevada’s highest earning casinos is not economically sustainable by the industry and would lead to thousands of direct and indirect job losses, according to one gambling analyst who called the proposal a “wolf in sheep’s clothing.”
“We estimate the gaming tax increase would result in 7,500 or more lost jobs in Nevada, a notable step backward,” Bill Lerner of Union Gaming Group said in a client’s note.
Nevada leads the nation in unemployment, bankruptcies and foreclosures.
The ballot initiative backed by Nevadans for a Fair 9 percent Gambling Revenue Tax was filed last week by Monte Miller, a Las Vegas businessman and director on the conservative, pro-business group Keystone Corp.
It would raise the top tier of gambling taxes to 9 percent, up from 6.75 percent, for casinos that make more than $250,000 a month in gambling revenue. State regulators said the proposal to change state law would affect about 170 of Nevada’s 443 license holders if approved.
Miller cited an American Gaming Association report that said casinos in other states pay much higher tax rates — as much as 50 percent in Illinois — and said raising the tax on “the billions of dollars that big casinos win from high-rolling gamblers” would ease the tax burden on small business and individuals.
But Lerner countered that Nevada’s casinos pay a greater portion of the state’s budget than in any other gambling jurisdiction in the country.
He estimated taxes paid by Nevada casinos account for 42 percent of state general fund revenues. In comparison, he said casinos in Atlantic City, N.J., account for just 4 percent of that state’s revenues, while casinos in Illinois and Indiana contributed 2 percent and 5 percent, respectively.
“When compared to other jurisdictions, it is clear that the gaming industry in Nevada is already paying more than its fair share,” Lerner wrote.
Virginia Valentine, president of the powerful Nevada Resort Association, called the measure “reckless and irresponsible,” and said it would amount to a 33 percent tax increase.
Initiative backers need to collect more than 72,000 signatures by November to send the proposal to the 2013 Legislature. It would go to voters the following year if lawmakers reject or fail to act on it.
(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)