Candidate wants to repeal new casino tax deduction

State Sen. Joe Neal, the only gubernatorial candidate calling for higher gaming taxes, doesn't think casinos should be allowed to deduct losses from the use of promotional gambling tokens.

The North Las Vegas Democrat said he would repeal a new tax deduction law that went into effect Oct. 1 and could save casinos an estimated $2.5 million this year. Neal voted against the law in the 1997 Legislature.

"They're taking a tax deduction on something that is not money," Neal said Monday. "They give someone a token and invite them to play, then they want to deduct what they lose. It's a rip-off."

So far, six casinos have applied to the Nevada Gaming Control Board for a total of $982,906 in deductions. They include the Las Vegas Hilton ($441,412), Desert Inn ($198,537), and Sam's Town ($974) in Southern Nevada. The Northern Nevada casinos seeking a deduction are the Sundowner ($322,512), Silver Club ($17,823), and Silver Legacy ($1,650).

Based on recommendations from the board, it will be up to the Nevada Gaming Commission to determine whether any of the requested deductions are granted.

Republican gubernatorial candidate Aaron Russo opposes gaming tax increases but shares Neal's distaste for the casino deduction. Russo said casinos issue promotional gaming tokens for their own good.

"The casinos are doing that for their own benefit, so why should the state lose income?" Russo said. "It's a voluntary decision on their part to use the tokens."

Fellow GOP gubernatorial candidate Kenny Guinn is looking into this issue but hasn't formed an opinion, spokesman Mike Getto said.

"It's not something he's intimate with but he's looking at it," Getto said. "He'd like to see how the bill that passed in the 1997 Legislature is implemented before he makes a decision on it."

Lt. Gov. Lonnie Hammargren, another Republican gubernatorial candidate, said he thinks the deduction is proper.

"It makes sense as a business deduction," Hammargren said. "It's gimmick advertising. There are all sorts of advertising gimmicks that can be considered business write-offs."

Las Vegas Mayor Jan Laverty Jones, who is opposing Neal in the Democratic primary, was unavailable for comment.

Gaming Control Board Chairman Bill Bible argued before the Legislature last year that the deduction shouldn't be allowed because promotional tokens are non-negotiable. But casino lobbyist Harvey Whittemore, who helped craft the law, countered that the tokens induce gamblers to spend more of their own money and therefore add to a casino's taxable revenue.

Neal wants to increase the gross gaming revenue tax rate from 6.25 to 8.25 percent for the state's large casinos.

"They continue to stick their hands in the public's pockets, but we can't stick our hands in theirs," he said.

Russo, however, opposes any casino tax increase. In fact, he said, he believes that all taxes should be lowered, with those paid by individuals lowered first.

Getto said Guinn also opposes a gaming tax increase, and doesn't see a need to raise other taxes either.

Hammargren said he would support a gaming tax increase only if it passed the Legislature.

"If the Legislature passed an increase in gaming taxes, I would feel comfortable to approve it because it had gone through the correct process," he said. "But I have no plans to initiate it."

archive