EDITORIAL: Casino taxation

By NEMS Daily Journal

Preliminary discussion of possible increases in Mississippi’s fourth-lowest-in-the-nation casino gambling tax needs to move toward serious consideration, a process that probably will require several years before legislation could pass and not face a promised gubernatorial veto.
Mississippi’s 12 percent casino gambling rate, which applies only to private-sector casinos and not Native American tribal-owned casinos, is lower than all states except Nevada and New Jersey, where gambling is a longer-term part of the economic landscape.
Mississippi’s 12 percent rate, divided between the state (8 percent) and host counties (4 percent) brought in about $295 million in 2009, about 4 percent of the state’s revenue. Income taxes and sales taxes bring in a majority of Mississippi’s revenue.
The casino tax rate has been constant since 1990, when its stealth-like legalization changed the economic landscape of Mississippi River and Gulf Coast counties overnight.
Mississippi has 30 state-regulated casinos, and their gross revenue in 2009 was $2.465 billion, with 25,739 employees who were paid $855.25 million in wages and tips, the American Gaming Association reported.
In comparison, neighboring Louisiana’s 18 casinos had $2.456 billion in gross revenue. They paid $598 million in taxes at 21.5 percent for riverboat and land-based casinos and 18.5 percent for racetrack-based casinos.
Casino tax revenue did not prove to be a cure-all for Mississippi’s state revenue needs, but its impact has been huge, as have its jobs.
It has been 20 years since the tax rate was set. Now that the industry is firmly established and thriving, and because, a revisiting of the rate is appropriate.
Mississippi’s revenue stream from all sources is threatened by the slow recovery from the nationwide recession, and state programs have been cut substantially.
It took years to raise Mississippi’s puny cigarette taxes to a fair level, and the same process should be anticipated in examining gambling taxes.
No strong proponents have stepped forward, but the backroom talk is undeniable.
Increases won’t come easily.
Sen. Hob Bryan, D-Amory, said Monday, “I don’t think we’ll see any action anytime soon. The casinos have pretty well called the shots on this.”
The casinos, of course, don’t have a vote in the Legislature, but like the tobacco interests, they have powerful friends who will vote for them until public demand for balance and proportionality force a change.
The expected long road ahead provides an opportunity for the people, beginning in 2011, to remind legislators and gubernatorial candidates that they are elected by the people, not casinos.