MEXICO'S TAX HAUL RAISES FEARS OF A RATE HIKEThe Mexican government said it expects to collect more than US$176 million in taxes and license fees from gambling and betting operations this year.
Next year, the collections could exceed $190 million - and they could be higher if a proposed doubling of the 20 percent tax rate is approved by Congress.
The government of President Felipe Calderón is looking to boost revenues, and it was possible last month that a proposal to raise the rate to 40 percent would find its way into the budget he was preparing to present to Congress.
The industry opposes the increase, needless to say.
Alfonso Pérez, president of the Association of Games and Draws Licensees, a trade group whose member include the largest operators in the country, said a tax increase would halt the growth of the industry and result in dramatic layoffs, possibly affecting half the current workforce of 40,000.
“If IEPS [the Special Tax on Products and Services] is increased from 20 to 40 percent they kill the activity,” he said. “There is no way anyone can pay it.”
Perez values the industry at $1 billion a year in revenues and said that if the government could bring illegal operators into line it could boost tax collections to $300 million a year.
UAW MAY BE OUT AT TRUMP PLAZADealers at Trump Plaza Hotel and Casino in Atlantic City want to drop the United Auto Workers as their bargaining agent.
Trump Plaza is one of four casinos in the city where the UAW won groundbreaking elections to represent dealers but has been unable to secure contracts for any of them.
In the case of Trump Plaza the dealers have been waiting two and a half years for a contract, which owners Trump Entertainment Resorts have steadfastly, and apparently successfully, refused to negotiate.
At least 30 percent of dealers at the casino have signed a petition to decertify the union, according to The Press of Atlantic City, citing information from the National Labor Relations Board.
The board will conduct a hearing and decide whether to call a new election.
“It’s an awful time for a union to try and be hanging tough,” Phil Harvey, a Rutgers University professor of economics and law, told The Press. “It’s easy for employers to get the workers they want, and most people are just happy to be there.”
NOVA SCOTIA TESTS CARD-TRACKING FOR PROBLEM GAMBLERSThe Nova Scotia Gaming Foundation has commissioned a study to assess the impact of the province’s innovative Video Lottery Informed Player Choice System for problem and at-risk gamblers.
The IPCS, as it is known, is a card-based player-tracking system scheduled for rollout across the province this fall and winter. Use of the card is voluntary. Players can choose to obtain one and access the features or continue to play normally without it, thus bypassing the system. The card’s unique self-monitoring features include: summaries of the amounts players spend per day, per month and per year, real-time summaries of wins and losses during active play sessions, the option to set time and spending limits, and the ability to self-exclude or limit access to play.
The foundation’s research will be carried out in two phases and will consist of an evaluation of the system’s impacts on problem players who are actively seeking help or treatment and those in the general population who do not necessarily seek out treatment but who are considered at high risk or are experiencing problems associated with video lottery gambling.
BARDEN, GARY MAKE PITCH FOR CASINO ON LANDProponents of moving one of two casinos on Lake Michigan in Gary, Ind., to a land-based location made their case to state lawmakers last month.
Gary’s two riverboat casinos, the Majestic Star I and II, now sit next to each other on a Lake Michigan harbor. Their revenues have declined in recent years, in part because of major upgrades at other Lake Michigan casinos in Indiana and a tribal casino in lower Michigan.
The casinos’ owner, Don Barden, along with many Gary lawmakers and city officials, want to move one of the licenses and build a new facility on a site in the city near the intersection of Interstate 65 and two other freeways. Barden wants to sell the other license to a company that would locate a casino in northeastern Indiana in or near Fort Wayne.
“We are not asking for any special favors. What we are looking for is a common sense move,” Gary Mayor Rudy Clay told an interim legislative study committee on gambling issues.
Barden has said moving both casinos to new locations would generate $40 million to $50 million in new tax revenue for Indiana and help the state’s casino industry weather gambling expansions in Illinois, Michigan and Ohio.
COSTA RICA BIDS TO GET INDUSTRY UNDER CONTROLA bill to regulate and tax land-based and online gambling and betting in Costa Rica was scheduled for introduction in the national Legislative Assembly last month.
The measure, reported to have the support of most political factions, would impose a 2 percent tax on gross revenues of casinos and sports books. This is expected to generate about US$85 million a year.
Casinos and sports books would be subject to formal regulation by a number of government ministries and law enforcement agencies with the aim of combating money laundering and shutting down illegal operations.
It is estimated that 46 casinos and some 300 companies, many operating remote-gambling call centers, are active in the country, none of which pay any taxes.
“We are sure this will be a beneficial project and, as long as it enters [the Assembly], it will not have many obstacles,” said one legislative leader, speaking to Periódico La República.
Philly casino cleared to start buildingChicago businessman Neil Bluhm, who heads the group that owns The Rivers casino in Pittsburgh, has received regulatory approval to build his SugarHouse casino in Philadelphia.
The Pa. Gaming Control Board approved a $220 million financing plan that allows Bluhm to go ahead with construction along the Delaware River north of downtown.
Bluhm professed himself “delighted” in a Pittsburgh Post-Gazette report and said he was ready to “get moving”.
Financing through a consortium of banks, including Credit Suisse, Jefferies and PNC, was expected to close last month, and it is possible the first phase of the casino - with about 1,700 slot machines and perhaps table games if the state legalizes them - could open next August.
Like its waterfront counterpart, Foxwoods, the project has endured years of delays, the result of citizen opposition, delays in getting necessary construction permits from the city and problems getting financing during the current recession. Foxwoods, which is to be located about four miles south of SugarHouse, also is way behind schedule. Its first phase is set for a May 2011 opening.
The state, desperate for the tax revenue, is anxious to get all 14 casinos authorized by the 2004 law up and running as soon as possible. Nine are open so far, six at racetracks and three at stand-alone locations.
Economic urgency is also driving the momentum to legalize table games in the state.
“Given the current budget crisis that we face - the worst economic downturn in decades, and a shaky job climate - there is no better time for Pennsylvania to add table games to our casinos,” said Sen. Tommy Tomlinson, the Bucks County Republican who introduced a bill to legalize live blackjack, craps and poker last month.
His district includes Philadelphia Park Casino & Racetrack in Bensalem.
Tomlinson’s bill calls for operators to pay a one-time $10 million fee to add table games and a 12 percent annual tax on win, which he says will produce $104 million to $160 million in revenue.
A House of Representatives bill, introduced in July by Greene County Democrat Bill DeWeese, calls for a $10 million licensing fee and a 21 percent tax rate. He says his measure would generate about $200 million a year in revenue.
The Gaming Control Board said it could have table games at the casinos within six to nine months after legislation becomes law.
However, some state lawmakers say the process is moving too quickly and want to see a Senate-approved gaming reform bill passed first.
Senate Bill 711 makes several changes to the 2004 enabling law, including reinstating a ban on political contributions from casino officials to state politicians.