State unable to resolve battle between resorts and ‘slot parlors’

An interim committee formed to try resolve the fight between major resorts and smaller gaming companies the big guys see as unfair competition gave up on finding an answer Tuesday.

Chairman Assemblyman William Horne, D-Las Vegas, was unable to get a second to the motion to prepare a bill draft that would impose a higher tax rate on companies like Dotty’s which operate numerous casinos that resort officials refer to as “slot parlors.”

Horne proposed a similar bill during the 2013 Legislature saying those operators “haven’t made the same investment that the nonrestricted properties have, and are paying less in taxes on that business model.”

Mike Sloan representing Stations said while the resorts contribute significant benefit to the state in taxes and employment, the restricted licensees don’t. He said operations like Dotty’s don’t make the same investment, and gaming is far from incidental to their operation. He said that violates state law, which mandates gaming not be a restricted licensee’s primary business.

Gaming Commission Chairman Peter Bernhard testified his examination of the system indicates the campaign to increase taxes on nontraditional operators is “a very effective campaign led by one nonrestricted licensee.”

That licensee, he said, is Stations Casinos, and Bernhard said he was concerned Stations was attempting to buy Dotty’s at the same time the corporation was pushing for regulations that would “devalue” Dotty’s.

He said the existing law which mandates that gaming should be “incidental” rather than the primary business should be changed. He said the word incidental should be removed from that statute.

Bernhard said he believes the smoking ban is what put a lot of taverns out of business, allowing the nontraditional operators like Dotty’s to move in where they once were. He said those decisions should be left to local governments. Lawmakers and gaming regulators shouldn’t be in the business of regulating the business models chosen by operators or such things as where taverns and other gaming outlets are located, he said.

“Do we want to legislate a certain business model that is yesterday’s technology?” he asked. “Don’t impose business regulations that will hamper a business without a legitimate policy reason.”

The original legislation was aimed at a half-dozen companies including Dotty’s — those with 500 slot machines or more in different bars, taverns and convenience stores — and would have imposed the same gross profits tax on them that is now paid by major resorts.

At present, slot route operators and companies such as Dotty’s pay an annual license rate that is significantly higher than that the big resorts pay per machine but they don’t pay the gaming tax.

The committee was also unable to get a vote on the proposed biennial review of restricted gaming locations or the plan to create a revolving fund to pay for those investigations.