Nevada gaming operators, including MGM Mirage, the state’s largest investor, have recommended that Nevada businesses support Governor Kenny Guinn’s proposal to levy a tax on gross receipts.
"We (the gaming industry) are willing to pay more," said MGM Mirage Chairman Terry Lanni at last week’s Preview Las Vegas 2003 conference. "All we ask is that others accept their responsibility to participate in providing needed services and infrastructure for our citizens."
Lanny said the gaming industry already pays "more than half of the entire state budget for schools, hospitals, libraries and senior centers," but that it is "not enough anymore" to expect gaming to continue.
It’s time, Lanny said, for other industries such as the financial services industry, to step up and pay its share. He said in fiscal 2002, MGM Mirage contributed $200 million in state taxes, while the entire financial services industry in Nevada contributed $2.4 million.
"The situation ”¦ is not fair. It is not right. It is not responsible," Lanny said.
Lanny added that the gaming industry can’t be relied upon to automatically post record growth, like it did in the 1980s and 1990s.
"Contrary to popular myth, gaming has grown at a far slower pace than other industries in Nevada," Lanny said, citing economic downturns that followed 9-11 and increasing competition from tribal gaming in California.
"Gaming accounts for only $18 billion, or 15 percent of the total ($122 billion gross receipts generated by all Nevada businesses), yet we bear more than half of the state’s tax burden," Lanny said.
To help generate tax revenue and even the playing field, Governor Guinn has proposed a gross receipts tax of Â¼ of 1 percent and a $450,000 exemption, which would exclude 62 percent of all Nevada businesses from having to pay the tax.
"If a business can’t afford a quarter of one percent of their gross revenue, it’s either a bad business or being run poorly," Lanny said.
While many business leaders, including the Las Vegas Chamber of Commerce, have come out against the proposed tax, the gaming industry appears to be lining up behind it.
Also last week, Harrah’s new chief Gary Loveman, joined Lanny in speaking out in favor of the proposal.
"A gross tax receipts tax, which exists almost everywhere else in the country, makes sense," Loveman said while appearing on TV’s "Face to Face With John Ralston."
Other top gamers to endorse the governor’s proposal include Mandalay Bay’s Senior Vice President Mike Sloan, who was on the governor’s task force that recommended adopting the gross receipts tax, and Nevada Resort Association President Bill Bible, who said Lanny’s comments last week "was what needed to be said."