Wednesday, March 12, 1997 | 11:59 a.m.
Louisiana Gaming Control Board chairman Hilary Crain said Casino America is the only casino company in the state that has ignored the rule requiring the riverboats to pay taxes on money they pay in double jackpots.
Double jackpots are double the winnings that the slot machines normally pay out on certain returns.
The issue is one of the concerns confronting Casino America as it vies for Louisiana's last riverboat casino license, which the gaming board plans to award on Thursday.
Crain quizzed company officials about the matter last week when the gaming board held hearings on the suitability of the companies applying for the last license.
He said this week that the state is still negotiating with the company over the taxes.
Failure to resolve the dispute could lead to an enforcement action against the casino, including possibly a license suspension or revocation, Crain said.
"There was a rule. The rule was clear. You ignored it," Crain told Casino America officials last week.
America's lawyer, Janet Boles, told Crain that the casino didn't ignore the rule. She said the company does not believe the regulation applies.
"We really have a genuine legal dispute or question that we're trying diligently to resolve with your staff," Boles said.
The double jackpot rule is one of the more controversial regulations adopted by the state police and endorsed by the state gaming board.
Under the rule, casinos are not allowed to deduct promotional expenses from their gross gaming revenue for tax purposes. Riverboat casinos are taxed on 18 1/2 percent of their gross revenues minus customer winnings.
The state defines the double jackpots as promotions since they are used to bring gamblers into the casino in the same way that cars are given away to attract gamblers.
Some casinos say the double jackpots should be considered as customer winnings and therefore deducted from their gross gaming revenues.
Harrah's Shreveport Casino is among the other companies questioning the rule. They have paid about $706,000 in taxes on double jackpots but still believe the rule is improperly applied. Harrah's has stopped giving away double jackpots.
"The first day we started doing double jackpots, we said to them, 'We shouldn't be paying this tax,"' said Harrah's spokesman Michael Weaver. "The state considers that to be taxable gaming win. We do not share that view."
Weaver said Harrah's hadn't reached the point where it would go to court to get the taxes back.
Casino America said in a statement issued Tuesday that it would contest any tax assessment made against the company.
"The company will pay what, if anything, it is deemed owed upon the conclusion of such proceedings," the statement said.
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