CR85-p16-America N2:SJC-Casino Review 25/10/09 12:47 Page 1
internationalcasinoreview
Harrah’s could be keeping neighbour afloat
The rumour mill in Las Vegas is suggesting that
News
Harrah’s Entertainment has bought a substantial part of
Planet Hollywood’s $860m US mortgage loan. Financial
results at Planet Hollywood, Harrah’s neighbour on the
Strip have forced the property to negotiate with lenders
to stay in business. Analysts believe the investment may
NORTH AMERICA allow Harrah’s to take over Planet Hollywood if it goes
into bankruptcy.
Government gaming revenues
Pennsylvania’s
lawmakers
fall for first time in 30 years
deliberating
table tax
Trends in State Revenues From small percentage of revenues from
With at least 25 US states having considered
Gambling’, said new gambling activ- gambling, even though it’s the longest
expanding gambling operations as part of
ities often provide a quick boost to established form of legalised gam-
state revenues, but generally do not bling in many states. Preliminary
budget balancing efforts in the past year, the keep pace with traditional tax rev- figures contained in the new report
role that casino taxation can play in
enues and government expendi- indicate those revenues fell off by
boosting governments coffers has never been
tures over time. 14.8 percent from July-March 2008
“The historical tendency for rev- to July-March 2009.
under more scrutiny. The amount of tax paid to
enues from existing gambling opera- The new report also examined the
State and local governments has, though,
tions to grow at a significantly slower extent to which states rely on gam-
pace than other state revenues may bling revenues. Overall, gambling rev-
The Meadows Racetrack and
fallen for the first time in 30 years. Casino in North Strabane has
hold important lessons for states as enues make up about 2.3 percent of
policymakers consider further states’ ‘own-source’ revenues, with
expansion of casinos, racinos, and the percentage for individual states penningnewlaws
other gambling activities,” Institute ranging from as high as 13.6 per cent UNITED STATES
deputy director Robert Ward and for Nevada and 9.2 per cent for West
Institute senior policy analyst Lucy Virginia to less than 0.1 percent in Bringing table games to
Dadayan wrote in the report. “Expen- Alabama and Wyoming. Pennsylvania’s new slot
ditures on education and other pro- Currently, 12 states have legalised sector would create up to
grams will generally grow more and operational commercial casinos. 10,000 new casino jobs
rapidly than gambling revenue over Nevada, home to 60 per cent of reports have indicated.
time. Thus, new gambling operations US casino facilities, accounted for 19 The state is looking at ways
that are intended to pay for normal per cent of all state revenue from of filling a US$3bn shortfall in
increases in general state spending casinos nationwide in 2009 (despite its budgets for 2010. It has
may add to, rather than ease, long- a tax on casino activity that is rela- been delighted with the
term budget imbalances.” tively low, at 6.75 percent). Indiana payback from its slots which
Most individual states reported and Illinois also collected relatively generating $187m in taxes in
declines in gambling revenues over large shares of overall casino August 2009 alone, with a
the last two years. The few states that revenue, at 17.2 and 11.9 percent, daily average of $3.32m going
reported increase, including Pennsyl- respectively, in fiscal 2009. back to Pennsylvanians.
vania and North Carolina, have Total state-local revenues from Statewide the industry
recently authorised the opening of casinos increased by 84 percent, employs around 8,000 people.
new gambling operations. from $2.4bn to $4.5bn, between Table games would more than
According to the report, states gen- fiscal years 1998 and 2009. After double that with one industry
erate tax revenues from four major adjusting for inflation, such revenue report stating that each table
types of gambling operations: state rose 43 percent. game generates about 9.75 jobs.
lotteries, casinos, racinos and pari- Revenues from casinos has been The state Senate has already
mutuel betting. By far the largest mostly downward since 2004 both in passed a bill that would tax the
source of state gambling revenues is nominal and real terms. games at a rate of 12 per cent,
Gambling revenues
lottery income - which experienced State and local government with an additional two per cent
account for 13.6 per cent
an overall decline of 2.3 per cent revenue from casinos declined by going to local municipalities. It
of Nevada’s State income between fiscal years 2008 and 2009. $412m or 8.5 percent from fiscal is planning to charge each
The second-largest source is year 2008 to 2009. Pennsylvania and casino a $15m licence fee,
casinos. During the same period, Missouri reported the highest although smaller venues
taxingissues feller Institute of Government those revenues declined 8.5 percent. growth at 63 percent and 6.6 would pay half that amount.
UNITED STATES Data on the decline come as The third-largest source for gambling percent, respectively. Industry estimates state that
states continue to examine casinos, revenues is the newer racinos, or race Officials in New Jersey blame the each casino would be able to
State and local government revenues video-lottery terminals and other track-based casinos. Revenues from decline in casino revenue in their operate between 50 and 100
from authorised gambling opera- gambling operations as potential those operations increased by 6.7 state on new competition in the gaming tables.
tions declined by 2.6 per cent from sources of new revenue - with more per cent, mainly due to new racinos form of casino and racinos in neigh- While Pennsylvania’s 55 per
fiscal year 2008 to 2009, marking the than 25 states considering such opening in Indiana and Pennsylvania. bouring Pennsylvania. Meanwhile, cent gross tax rate is in line with
first time those revenues have proposals in the past year. Pari-mutuel wagering - which gen- officials in Illinois blame the most states' racetrack-casino
declined in over three decades, Authors of the study called For erally takes place at horse racing, smoking ban in casinos that was taxes, it is the highest rate in the
according to a report by the Rocke- the ‘First Time, a Smaller Jackpot: harness and dog tracks - makes up a enacted in January 2008. country for stand-alone casinos.
The Meadows Racetrack and
Casino in North Strabane has
said it will not add table games
Ameristar adds new hotel to Black Hawk
if the tax rate is too high. It is
supporting the bill that taxes
table games at 12 per cent and
blackhawkup dollars elsewhere. We look voters passed a local referen- charges a $10m licence fee.
UNITED STATES forward to introducing dum to implement Amend- Some politicians want the tax to
Ameristar’s exceptional ment 50, a statewide provision be as high as 34 per cent.
Ameristar has just opened a guest service, gaming, luxury that liberalised several Col- Meadows spokesperson
33-storey, 536-room luxury amenities and food and bev- orado casino regulations. The David La Torre said: “We want
hotel and spa at its casino in erage offerings to an even new hotel and spa enable people to understand, if the tax
Black Hawk. The new hotel is broader range of guests.” Ameristar to fully leverage the rate and the fees are too high
the tallest structure between “We are seeing a brand changes, which included on table games, it simply wont
Denver and Salt Lake City. new demographic of guests,” increasing single-bet limits to work for us.”
Ameristar chief executive added Reggie Fullwood, $100, operating the casino 24 He said that with regulatory
officer Gordon Kanofsky, senior vice president and hours daily and adding the fees and tax, the casino pays
said: “Ameristar remains very general manager of Ameristar games of craps and roulette. almost 60 per cent of its GGR
enthusiastic about Black Casino Hotel Black Hawk. “With the investment we to the state.
Hawk. Our $235m invest- “These are people who are have made in the Black Hawk Nevada has the lowest tax
ment in this expansion will new to our casino and new to community, we are very rate on stand alone casinos at
generate more local eco- our market, and they are proud of the jobs we have proud of the benefit that Col- to receive millions in gaming eight per cent. The highest,
nomic development by bringing a lot of energy and been able to create,” Full- orado will receive from tax dollars, the bulk of which behind Pennsylvania’s, is Illinois,
attracting guests who would enthusiasm with them.” wood said. “Along with our increased tax revenues. The will go to cash-strapped com- where the graduated tax rate
be spending their leisure In January 2009, Black Hawk industry partners, we are also state of Colorado is expected munity colleges.” averages out at 36.1 per cent.
16 November 2009 • northamericanews
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