Time to rethink taxing strategy
January 30, 2018 3:11 AM
by Eileen Di Rocco
With the upcoming Supreme Court ruling expected the first half of the year, many states are working on sports betting legislation – just in case the Court’s decision opens the door the Professional and Amateur Sports Protection Act closed in 1992.
But many in state government have not a clue about how sports betting actually works and what it takes to make a profit. They only see total handle numbers from Nevada (estimated by the Nevada Gaming Control Board to be almost $5 billion in 2017) and guess how big those numbers might be for their state. Then they get giddy thinking about possible tax rates and how much money those rates might generate for their upcoming budgets.
After all, states with existing casinos have been able to levy large tax rates – up to 20 percent in Colorado, 35 percent on slot machines in Florida, 15 to 50 percent in Illinois. In contrast, Nevada has kept their gaming revenue tax to 6.75 percent.
Pennsylvania has included a 36 percent tax on sports betting in the legislation passed there in October and the NBA is now suggesting to a New York State Senate committee that it would like one percent of the handle should the Empire State legalize sports betting.
The American Gaming Association is not in favor of the NBA’s proposal. Geoff Freeman, AGA president and CEO said, “We are pleased that the National Basketball Association… joined with the gaming industry in support of vigorously regulated sports wagering. We can all agree that the 25-year ban on sports wagering has been a failure in every regard. Now, let’s get real about eliminating the illegal market, protecting consumers and determining the role of government – a role that most certainly does not include transferring money from bettors to multi-billion dollar sports leagues.”
What those eager to fleece the American sports bettor don’t realize is Nevada’s legal sportsbooks only hold about 3.5-5 percent of the total handle in revenue, which means the one percent fee the NBA would like translates to about 20-29% of the total revenue.
And, says the AGA, “money that leagues skim off the top decreases the total amount of money taxable by state/other governments. These dollars fund vital community services.”
Of course, if money goes to the leagues the books will need to adjust their odds, which will only encourage more illegal betting, a market the AGA currently estimates at about $150 billion in wagers annually.
Maybe everyone, including the major sports leagues, needs to take a deep breath and rethink their taxing strategy on sports betting, otherwise they may kill it before it ever gets out of the starting gate.
ON THE MOVE: Golden Entertainment, Inc. announced Monday the appointment of Mark Seligman as general manager of the company’s Arizona Charlie’s Decatur and Arizona Charlie’s Boulder casino properties.
Seligman brings with him nearly two decades of experience in operations and management within the Las Vegas locals gaming market. He will divide his time between both hotel-casinos.
Bill Keena, formerly general manager of Rivers Casino in Des Plaines, Illinois, has joined Rivers Casino in Pittsburgh as general manager. Keena opened the Des Plaines casino in 2011, and the Chicago-area venue quickly became Illinois’ top-performing casino. Both casinos are owned by Rush Street Gaming.
Harper Ko is the new executive vice president, chief legal officer – general counsel of Everi Holdings, a provider of gaming products and payments solutions to the casino gaming industry whose corporate headquarters are located in Las Vegas. Ms. Ko, who most recently served as deputy general counsel on gaming for Scientific Games, brings over 17 years of legal and regulatory experience to her new position.
Michael Mathis, president and CEO of MGM Springfield, announced his full executive team is now in place. Located in downtown Springfield, Mass., the resort is scheduled to open in the third quarter of this year. A few of those team members are: Alex Dixon, general manager; Anika Gaskins, VP national marketing; Lynn Segars, VP slot operations; Talia Spera, executive director arena operations; Robert Westerfield, VP table games.
See you around town.