Gaming pays the freight for the rest of us
“God gives every bird its food, but He does not throw it into the nest.” J.G. Holland
Suppose you’re a stockholder in XYZ Company and you could vote an increase in the yearly cash dividend which you regularly receive.
The company needs new equipment in order to improve the quality of its products to preserve its position in the marketplace against strong competition, but can’t finance the new equipment unless it can use the money which would fund the dividend increase.
How would you vote?
Well, if you had a long-term view of XYZ’s business and wanted to ensure your future dividends at past and present levels, I’m confident you would vote against the dividend increase at this time.
This is exactly the situation all of us Nevada citizens are in with respect to raising gaming taxes. Yes, we Nevada citizens are stockholders in the gaming industry as long as that industry pays tax dollars to our state which we would otherwise have to pay out of our own pockets.
The State of Nevada has expenditures which must be met in order to furnish us with the services we demand. And if gaming were not paying between 38 and 40 percent of our state expenses with the money it pays in gross income taxes, every one of us citizens would have to cough up additional tax dollars in order to carry the unavoidable load.
Now, you’re all hearing the cries of the “gimmie-more” types who don’t think gaming is paying “its fair share,” whatever that is. Just what is gaming’s fair share? Who has the gall to stand up and dictate to others what their fair share ought to be? Sen. Joe Neal? The teacher’s union? Real estate interests? Local governments? They’re all special interest groups who want their activities paid for by goring the other guy’s ox!
Getting back to my XYZ Company example, once again I’m going to remind you Nevada gaming “stockholders” that with the proliferation of gaming in many forms in most states, we are now in head-on competition with these new purveyors: Indian gaming, Atlantic City gaming, Biloxi gaming, New Orleans gaming and a host of others coming on-stream.
So how do we maintain the lead we presently enjoy in the face of future competition? There are only two ways: One is to have something which no other gaming establishment has to offer, and that’s highly unlikely since the same machines are found in all casinos and the same table games are offered everywhere.
And the other way is to overwhelm our tourists with ever-changing spectacular resorts which offer every amenity under the sun. In other words, by never letting the competition catch us. And this takes big money.
During my 28 years living in Nevada, I’ve witnessed not only the fantastic newer resort-casino developments within our state, especially in Las Vegas, but I’ve also seen the remodeling and upgrading of almost every older casino at least a half dozen times in order to hang in there with the newer properties. Again, this takes huge after-tax profits because it’s a continuing thing.
What about Atlantic City? Isn’t it true that those resort-casinos pay approximately double the rate of gaming taxes paid by Nevada casinos? Yes. But not only are we comparing apples with oranges, Atlantic City protects its resort-casinos from competition. The number of casinos is strictly controlled. Profits are far more stable and predictable. Not so in Nevada. Here, anybody can open a casino-resort if they have the money, can meet gaming board requirements and local government regulations. The competition within Nevada is fierce. We’ve had several once-great properties take gas during the past five years.
I know the temptation is strong to harp on the easy target, especially if that target is perceived to be a bottomless pit of money for tax increases to pay “our fair share” for us. But I’m asking you to stop and really think it over before you sign any petitions having to do with raising gaming taxes or taxing business in general. Would it really be in your long-term best interests?
Personally, I love my 38 to 40 percent general fund stake as a Nevada gaming stockholder. We’re spoiled rotten. No other state has anything like it! I want to do whatever I can to preserve what we have by giving Nevada gaming the competitive edge against all future competition, and that means our gaming people must have healthy industry profits to be able to keep upgrading and redeveloping their properties, which is the only way to assure the same tourists coming back to Nevada again and again.
Tell the petition pushers to quit bitching and pay their own fair share!
Bob Thomas is a Carson City businessman, local curmudgeon and former member of the Carson City School Board and Nevada State Assembly.