States Want More?

The Wall Street Journal has an article today saying states are caring less about gambling impact and are dialing it up instead.

This is supposed to be news? Very few have ever been concerned on gambling impact. The currently cash-strapped states are focused on the tax revenue to be had and on the impact of the money being gambled in their state rather than elsewhere. Nobody really cares about the morality involved or the disparate economic impact in various social strata. Its well known the Gambling Treatment stuff is pure junk.

Fast food tax! Fast food tax! Fast food tax! Fast food tax! Fast food tax! Why fight addiction when you can make money off of it?

Well, exactly. Americans seem to be much more game for a tax based on consumption rather than a general tax. Rather than do the difficult thing and cut government size, raise taxes, and be thoughtful... let's just open a casino, tax the hilt out of it, provide "entertainment" to the consumer, and externalize the consequences. Take the easy way out.

NJ has an 8 percent tax on casino gross revenue provides over $300 million annually and is dedicated to funding programs for senior citizens and the disabled;
Casinos employ almost 50,000 New Jersey residents in full-time and part-time jobs and have an annual payroll of over $1 billion;

But casinos in PA pull in $1.284 billion per year for the state just from slot machines. Philadelphia Park (PARX) the largest PA casino contributed $239 million tax dollars and fees by itself.

When the state still had a $200 million budget shortfall, it encouraged PA Governor Rendell to sign off on an expansion of gambling to include table games. The licensing fees from 10 casino operators for the right to add table games generated $165 million. In exchange the state agreed to only take 14% from the table games, as opposed to 55% from the slot machines.

I think that is why the response of the NJ state government has been so lukewarm to the crash of the gambling industry in Atlantic City. They may want to introduce urban style casinos with no hotel rooms and minimal entertainment in the northern part of the state, but they want the gaming tax rate of Pennsylvania. In order to do that they have to avoid the worst part of the lawsuits from the existing corporations. A major deal seems imminent.

Pennsylvanians didn't want gambling. They were enticed by the government who said they'd reduce school taxes for every homeowner (except in Philadelphia) and reduce wage taxes in Philadelphia... which they did. The only things are:

(1) You have to apply to your local government for tax relief. This process is unclear - hundreds of thousands of Pennylvanians missed out as the process was confusing or didn't receive applications.
(2) The relief is applied evenly to every property tax owner, regardless of home value.

Gambling in Pennsylvania to me seems like a simple redistribution of wealth. To me, it would have been much more fruitful to simply take the tough road, increase taxes and reduce the size of government.

Up here in Washington (state) the R's are proposing allowing the state sanctioned card rooms to install Tier 2 machines. Currently only the tribal casinos are allowed to have machines, or offer any game that doesn't exclusively use cards.

The D's are in opposition (officially) because they don't want to expand gambling (yet give the state lottery opportunity to expand whenever requested) and these new machines won't bring in as many tax dollars as their proposed sales tax increase.

Of course the real (unofficial) reason the D's oppose it is because the Tribes pay big lobby money to D's to keep their sweetheart deal. The tribes get the machine monopoly and pay 0 tax to the state, giving them a massive advantage over the state sanctioned card rooms.

>NJ has an 8 percent tax on casino gross revenue provides over $300 million annually ...
>casinos in PA pull in $1.284 billion per year for the state just from slot machines.
And there hasn't been one single solitary gambler who chose casinos due to state taxation rates.

>In exchange the state agreed to only take 14% from the table games, as opposed to 55% from the slot machines.
55 percent seems confiscatory to me and even 14 percent seems high. What do other industries pay in tax rates? Hotels, restaurants, bars, movie theaters.

>In order to do that they have to avoid the worst part of the lawsuits from the existing corporations.
What law suits?

Quote: pacomartin

NJ has an 8 percent tax on casino gross revenue provides over $300 million annually and is dedicated to funding programs for senior citizens and the disabled;
Casinos employ almost 50,000 New Jersey residents in full-time and part-time jobs and have an annual payroll of over $1 billion;

Casinos have far more benefits than they do
detriments. They employ thousands, bring
in billions to state coffers, and people can
have fun giving money to the gov't, instead
of a big tax hike.

Quote: EvenBob

Casinos have far more benefits than they do
detriments. They employ thousands, bring
in billions to state coffers, and people can
have fun giving money to the gov't, instead
of a big tax hike.

Have to agree here. Heinz Field and Rivers Casino are effectively across the street from each other. Heinz Field got taxpayer subsidies, employs less than 400 full time, and fills up and thus spins off acctivity to the area at best 20 days a year.

Rivers was built by private business, pays taxes, is open 24/7/366.250001, and has hundreds of people employed in gaming alone. Even more in all other departments. The state takes a mafia-level 55% of slot revenue, which does not let the joint off the hook for other taxes. Many people I know don't even play the games, they like the atmosphere. It has been a good addition overal and I'd rather drop $100 there than give the $100 extra the democrat county government just increased taxes today.

Quote: EvenBob

Casinos have far more benefits than they do detriments. They employ thousands, bring in billions to state coffers, and people can have fun giving money to the gov't, instead of a big tax hike.

I think you have put your finger on one of the central questions of government. People are by nature prone to vices. Which vices do we make illegal, and combat the inevitable criminal empire that will arise to provide these vices, and which ones do we make legal, legislate, control and tax.

In Pennsylvania, when prohibition was repealed, then Governor Gifford Pinchot created the Liquor Control Board whose purpose it was to discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible. In 2011 the LCB still exists because it raises huge amounts of money for the state. Inevitably whatever the tax, whether it be booze or cigarettes, the government will begin to count on the revenue.

Would prostitutes be better off in government sanctioned houses where they are not beat up or get STD's. Would it be possible to work off their indebtedness in five years so that women could come to the USA? Do we want to make cigarettes illegal again? Does it make more sense to tax fellatio or real estate? How about a chocolate tax? In PA they have a breathalyzer attached to giant vending machines that sell tax. How about a scale before you can buy a Reese's peanut butter cup.

Should we give income tax deductions to skinny teetotalers with low blood pressure and two kids?

Quote: pacomartin

In 2011 the LCB still exists because it raises huge amounts of money for the state.

Im MI the retailer can never go under the min sale
price set by the state. There are no sales on liquor
here, the state wants every dime it can get. Thats
what I like about Calif, you could buy seriously cheap
off brands on sale all the time.

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Quote: FleaStiff

55 percent seems confiscatory to me and even 14 percent seems high. What do other industries pay in tax rates? Hotels, restaurants, bars, movie theaters.

Or take the case of Illinois, who in 2005 (I think), voted AGAINST gambling expansion in favor of an increase in taxes on revenue (as high as 75%... and that's on REVENUE!! not PROFIT!). So what did the Illinois casinos do? They started charging admission, they started charging for ALL drinks (including soda), they raised table minimums to unplayable levels ($15 weekdays, $25 on the weekends), penny slots became two-cent or even three-cent slots (at Harrah's). All because the government didn't want to expand casino gambling. The once favorable state to gamble in became the most unfavorable.

This is the main reason I didn't vote for Blagojavich. I knew he was shady when the logical answer (expand gaming) was not offered. But greed gets the best of everybody...

Quote: Ibeatyouraces

Right about that. Taxes here in MI are rediculous. And they wonder why people keep leaving

Just across the border in IN, a 1.75 that will cost you
17.99 in MI, is 13.99. Its worth stocking up, which I
did for years when I went to Shipshewana every week.

Even as one of the more left wing members of the forums, I'm not in favour of the gubbermint having any hand in the running and operation of liquor stores. I understand the taxation part, but the state control of buying and selling booze? Not good idea. It's not something I think the state should be involved in.

BC Liquors stores are a joke here (never open, and never sell cold beer), so the cold beer and wine stores provide a much better service, but are hamstrung by what BC Liquor will let them sell.

Cesspit, I sent you an email.

Quote: slyther

Up here in Washington (state) the R's are proposing allowing the state sanctioned card rooms to install Tier 2 machines. Currently only the tribal casinos are allowed to have machines, or offer any game that doesn't exclusively use cards.

The D's are in opposition (officially) because they don't want to expand gambling (yet give the state lottery opportunity to expand whenever requested) and these new machines won't bring in as many tax dollars as their proposed sales tax increase.

Of course the real (unofficial) reason the D's oppose it is because the Tribes pay big lobby money to D's to keep their sweetheart deal. The tribes get the machine monopoly and pay 0 tax to the state, giving them a massive advantage over the state sanctioned card rooms.

I think you mean Class II under the IGRA, which is somewhat strange considering that the tribal casinos in WA don't use Class II games anyway. Under the WA state compacts, video gaming uses what's called the Tribal Lottery System. It's not a bingo-based game at all. Class II games are generally meant as a fall-back where no state compact exists.

Thanks for the correction ME. I wasn't exactly sure how to describe the machines.