Lawmaker dusts off casino tax increase proposal

State Sen. Joe Neal dusted off his proposal to raise casino taxes in a presentation Tuesday to a Senate panel that was met with strong opposition from powerful gambling industry lobbyists.

Neal, D-North Las Vegas, wants to raise the tax on larger casinos by 4 percent, a plan that has died in each of the past three legislative sessions.

Nevada has not raised gambling taxes since 1987. Neal said the state's current 6.25 percent tax on all casinos with more than $134,000 in monthly gross revenues is lower than every other state's gambling taxes.

Neal's bill, SB21, would tax monthly gambling revenue more than $1 million at 10.25 percent. The tax would apply to 249 of Nevada's biggest casinos, and legislative analysts said it would generate an additional $620 million for Nevada during the next two years.

Neal says it would help cover a $704 million-plus state budget shortage.

The state's politically powerful casino and union lobbies voiced opposition to Neal's plan during a two-hour Senate Taxation Committee hearing.

The panel took no action on the bill. Taxation Chairman Sen. Mike McGinness, R-Fallon, asked Neal to "be patient" because he wanted to consider the increase along with Guinn's tax proposals, which have not yet been introduced as bills.

"We need to put an a la carte menu out there and pick and choose," McGinness said, adding the casino tax increase was unlikely to pass out of his committee as written.

McGinness and Sen. Bob Coffin, D-Las Vegas, said a much smaller casino tax increase -- of a quarter-percent -- was certain. Coffin said, "I don't know if the votes are there" for a 4 percent hike.

Lorenzo Fertitta, chairman of the Nevada Resort Association, said low taxes are needed because Nevada is "the most competitive casino environment in the world."

He said gambling companies outside Nevada pay more because most operate in a "near monopoly" with larger nearby populations and fewer casinos.

The current tax rate also allows casinos to funnel revenues into glitzy hotel-resort attractions which draw gamblers from across the country, said Fertitta, president of locals gambling company Station Casinos. He said such reinvestment on the Las Vegas Strip and in Reno "has been the lifeblood of this state for many years."

Union advocates agreed.

"Las Vegas is a special place, and it has to stay a special place," said AFL-CIO Nevada Director Danny Thompson.

Neal maintains social problems associated with casinos -- including gambling addiction and rowdy tourists -- have hurt Nevada more than their money has helped it. Gambling levies and tourism-related sales taxes account for about three-fourths of Nevada revenues.

Neal pointed to a University of Nevada, Las Vegas, study showing gambling social costs were $300 million to $900 million in the Las Vegas area alone.

"We do not and have not taxed gaming sufficient enough to take care of the problems that gaming generates in this state," Neal said.

Fertitta and casino industry lobbyist Billy Vassiliadis argued that increasing gambling taxes would work against the state's need to diversify its revenues.

Gambling companies back the governor's plan for a quarter-percent gross receipts tax on large Nevada businesses, including casinos.

"To continue to rely on only one industry to pay for the vital needs of this State is bad tax policy and, I believe, irresponsible," Fertitta said.