Casinos fight efforts to raise Nevada gambling tax
LOS ANGELES (Reuters) - Plans to ask Nevada voters to raise taxes on casinos have alarmed the Las Vegas gambling industry, which is scrambling to block initiatives and come up with other ways to fund projects from education to new roads in the tax-averse, fast-growing state.
The specter of a tax hike is particularly unsettling given the industry's recent doubling-down on luxury casino resorts. Analysts say about $30 billion in new development is currently under construction on the Las Vegas Strip.
Polls have found that a majority of Nevadans would support petitions like one from the Nevada State Education Association to raise the state's gambling tax by 3 percentage points to 9.75 percent.
"If it gets on the ballot, voters will pass it," said Bill Lerner, an analyst at Wall Street firm Deutsche Bank.
To head off that possibility, casino operators are angling to have the initiatives scrapped on legal grounds.
In addition, the Nevada Resort Association, which represents the state's casinos, has been involved in a number of discussions, including talks with other industries, over the need to raise tax revenue; but there have been no concrete proposals, said association president Bill Bible.
Last week, a state judge threw out as untenable two petitions, backed by Las Vegas lawyer Kermitt Waters, which sought to nearly triple Nevada's 6.75 percent casino tax.
Waters is expected to appeal the decision.
Meanwhile, the petition to raise taxes on casinos from the teachers' union was resubmitted earlier this month after a judge said it needed to be reworded.
Lynn Warne, president of the NSEA, said the union chose to pursue a ballot initiative after trying, but failing, to get the state legislature to impose a general business tax.
Nevada does not tax corporate or personal income and Republican Governor Jim Gibbons was elected on a campaign promise of no new taxes.
Warne said the higher casino levy would raise $250 million a year for teacher salaries and "student achievement" needs.
NATION'S LOWEST GAMBLING TAX
She said the union plans to start collecting the 58,000 signatures needed to get the gambling tax initiative on the November ballot but is holding off until next week's deadline for opponents to respond to the reworded petition.
"We have the lowest gaming tax in the country. Going to 9.75 percent is not even the average," Warne said. Continued...
