Detroit’s gaming taxrate expected to rise

Jul 13, 2004 4:40 AM

Michigan lawmakers want to increase the gaming tax on the Detroit’s three casinos but they can’t agree on how much.

The Senate has passed a bill that would raise the current 18% gaming tax to 24% while the approved House bill sends the tax to a lofty 36%.

Hoping to resolve the issue is a conference committee of the two groups. They are expected to meet on Wednesday.

But, either way, the existing operators, Mandalay Resort Group (MBG) and its partner, the Atwater Group; MGM MIRAGE Inc. (MGG), and Greektown, are suggesting a tax boost will jeopardize jobs and the construction of permanent casinos.

"It’s a huge hit," said an Atwater representative. "It hurts our ability to set aside money for future development."

Since a voter initiative first authorized Detroit’s three gaming licenses, state law requires that the Senate can only approve a tax hike if the bill receives a three-fourths majority, or 29 votes. When the upper chamber found itself one vote shy last week, the Senate chambers were locked and a search party was sent out for two missing senators. Actually, the effort was unnecessary because one senator, who was holding out for slot machines at racetracks, switched his vote to the majority.

No such problem faced House members who supported the tax increase by a vote of 89-15.

Whether the two bodies can find an accommodation was unknown since House members appeared adamant that six percent was inadequate.

Awaiting the legislation is Gov. Jennifer Granholm who is on record as favoring a casino tax increase if it helps resolve the state’s budgetary problems.