LOS ANGELES May 20 Nevada teachers have agreed
to drop a ballot initiative aimed at raising taxes on casino
winnings in return for the backing by three major gambling
operators of a bid to raise hotel room taxes.
"This has the potential to grow and raise a great amount of
money for schools," Lynn Warne, president of the Nevada State
Education Association, said on Tuesday.
The teachers association said late Monday that it had
reached an agreement with Harrah's Entertainment, Station
Casinos, and Wynn Resorts Ltd (WYNN.O) under which it would
drop plans for a referendum to raise the state's tax on large
casinos to 9.75 percent from 6.75 percent.
"We view this development as a positive for gaming
operators ... However, we think some gaming companies could be
opposed to this solution given their relative exposure to the
tax if they have disproportionately more rooms than other
operators," Deutsche Bank analyst Bill Lerner said in a
The three casino operators agreed to back an advisory
question on this year's ballot in addition to pushing the
Nevada legislature in 2009 to raise the room tax as high as 13
percent from its current 9 percent.
The funds would go to the state's general fund to offset
budget shortfalls and to back education initiatives, including
supplementing teacher salaries.
Warne said the higher room tax would generate an additional
$180 million in its first year, with the amount rising further
as new casino resorts come on line.
Wall Street analysts say about $30 billion in new
development is currently under construction on the Las Vegas
Strip, including Wynn's 2,000-room Encore and MGM Mirage's
(MGM.N) massive mixed-use CityCenter project.
(Reporting by Deena Beasley; Editing by Tim Dobbyn)