Casino profits fuel talk of gaming tax hike

CARSON CITY -- A report issued today showed Nevada casinos rang up profits of $1.1 billion last fiscal year and that is expected to fuel debate in the upcoming Legislature over raising gaming taxes.

The state Gaming Control Board said net income in the 235 major casinos rose by $32.5 million or 2.9 percent over fiscal 1997.

But there were mixed signals. The casinos, before federal taxes and extraordinary expenses, kept 8.2 percent of their total revenues, down from 8.3 percent of fiscal 1997.

Total revenue is the money spent by patrons on gaming, rooms, food, beverage and other attractions.

Sen. Joe Neal, D-North Las Vegas, a critic of the casino industry, has already ordered a bill to raise the gaming tax 2 percent from its present 6 1/4 percent of gross gaming revenues.

Sen. Bill O'Donnell, R-Las Vegas, said this week "marginal casinos are hardly making it. The state is not in the business of putting people out of work." He suggested there may have to be a tax reduction for some of the casinos to allow them to survive.

"With Indian gambling, we have to make sure we protect people's jobs," O'Donnell said. He said the tax break would go to those on the "lower end." The big casinos are doing alright, he said.

The trend statewide for several years has been that casinos are keeping a smaller percentage of their total revenues for profit.

But a recent poll by UNLV and the University of Nevada, Reno showed 69 percent of the people sampled favored an increase in the gaming taxes, if more revenue is needed for government programs.

The report released today, called "Nevada Gaming Abstract," said downtown Las Vegas casinos registered a loss of $853,719 for the year but that was a far better performance than in 1997 when they were $49.7 million in the red. Net income was minus 0.1 percent. Net income for Las Vegas Strip casinos was $802.7 million, down 11.4 percent from the previous year.

Russell Guindon, senior research analyst for the board, said profits in casinos in Laughlin were $49.9 million, down 18.7 percent and $57.9 million on Boulder Highway, down .97 percent.

Total revenues of statewide casinos climbed to $13.8 billion in 1998, an increase of 4.5 percent. They paid $590.8 million in state gaming taxes and fees, equating to 7.6 percent of their gaming revenues.

Guindon said a pattern established several years ago continued in 1998, showing that gaming win accounted for less of the total revenue in a casino operation. "Gaming revenues represented 55.8 percent of total revenues," Guindon said. "That's down from 56.4 percent of last year."

Rooms account for 16.7 percent of the revenue, the same as 1997; food contributes 12.6 percent, up four-tenths of a percent; beverages has 5.2 percent of total revenues and other things such as entertainment and shop leasing contributed 9.7 percent.

The report said Washoe County's 44 casinos earned a combined net income of $98.7 million from total revenue of $1.7 billion. South Shore Lake Tahoe in Douglas County had five casinos with $34.8 million in combined net income followed by 14 Elko County casinos with $23.2 million and 10 Carson Valley casinos with $3.2 million.

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