Posted at 1:37 p.m., Thursday, December 13, 2007
Vegas casino executives slam gambling tax-hike plan
By RYAN NAKASHIMA
Associated Press Business Writer
MGM Mirage Inc. chief executive Terry Lanni said two major projects on the Las Vegas Strip, the company's $7.8 billion CityCenter to open in late 2009 and its $5 billion joint venture with Kerzner International and Dubai World to open in 2012, would add $500 million a year to state coffers through gambling, retail sales and other taxes.
"The teachers union is talking about raising $250 million in taxes some time out three, four years from now," Lanni said at a roundtable at the Governor's Conference on Tourism. "These two projects alone produce twice that much."
The backlash from executives followed a lawsuit filed Wednesday by Las Vegas Sands Corp., the casino company run by billionaire Sheldon Adelson, against the initiative. The lawsuit contends the proposal is misleading and overly broad, violating a state law that limits such initiatives to only one subject matter.
The Nevada teachers' plan calls for a raise in the casino tax from 6.75 percent to 9.75 percent on the state's largest casinos, raising at least $250 million a year for schools.
Separate ballot initiatives by Las Vegas lawyer Kermitt Waters would raise taxes on Nevada's biggest casinos those that gross more than $1 million a month in casino win to 20.2 percent, raising up to $2 billion a year.
The proposals would have to win voter approval in the 2008 and 2010 elections. The one that gets the most voter support in 2010 would take effect.
Las Vegas Sands' president William Weidner said he wasn't overly worried about a poll in the Las Vegas Review-Journal this week showed 62 percent support for the teachers' plan. A similar poll in October put support as high as 76 percent.
"You know what that says? Thirty-eight percent of the people here said, 'You know what? A low-tax Nevada is what I want,"' Weidner said. "I think we've got to face this thing head on for what it is. Extortion by the teachers union."
Weidner also argued that an approximately 9 percent room tax in Clark County should be diverted away from the Las Vegas Convention and Visitors Authority, which collects nearly half the room tax revenues, for some 40,000 new hotel rooms expected to be built by 2011.
"Voila, $250-$350 million more dollars by the time the teachers tax would come in in 2012," Weidner said. "There's a money source that I consider that we are wasting. That's all I'm saying. Look at it. It's not that hard to figure out."
Afterward, LVCVA president Rossi Ralenkotter defended the role of his organization, which is most famous for creating the "What Happens Here, Stays Here" tag line for Las Vegas and running the Las Vegas Convention Center.
Some 1.7 million conventioneers go through the facility each year, spending some $1.7 billion on hotel rooms, dining, shows and gambling in Las Vegas.
"If you negate what we do as an organization, you will impact the economy, impact jobs, impact the ability to market," he said.
He said Las Vegas' nation-leading hotel room occupancy of 90 percent would be jeopardized if LVCVA funding was curtailed.
"We're No. 1 now, we've got to stay No. 1," he said. "When you're on top, you've got to continue to drive the ball down the field."
Boyd Gaming Corp. president Keith Smith argued any tax revamp should cover all industries and pointed out that for large casino operators, more than half of their revenue is now coming from sources other than gambling.
"There has to be a broad-based approach," Smith said. "Our business has evolved. The state's economic model and how they fund themselves has to continue to evolve."