The state's effort to collect more taxes from Hawai'i residents on their gambling winnings isn't expected to have a significant impact on business at Boyd Gaming Corp.'s downtown Las Vegas casinos frequented by Island gamblers, the company's chief operating officer said yesterday.

Under a law that went into effect last month, Hawai'i gamblers can no longer offset their winnings with their losses for Hawai'i income tax purposes. Previously gamblers would be taxed only on their net winnings, but now they will be taxed on gross winnings. The law change doesn't affect federal tax rules.

Paul Chamak, Boyd's executive vice president and chief operating officer, said the company is keeping tabs on traffic from Hawai'i but doesn't expect the new law to make a major dent in business from the Aloha State.

"I think the state has quantified the amount they expect in additional revenue from this at $300,000. So it's not a hugely meaningful number overall," Chamak said in a conference call with investors following the release of Boyd's quarterly financial results.

"Obviously it's not a positive, relative to our customer base. At the same time, we think we've got some great customers that come out of the state of Hawai'i and really don't see something like that impacting their patterns."

Boyd's California Hotel and other downtown Las Vegas gambling properties are popular with Islanders.

Chamak was upbeat about the performance of the Boyd's downtown operations, despite a sharp decline in profits companywide.

Earnings before interest, taxes, depreciation and amortization — a measure of operating profit known as EBITDA — increased at its downtown properties for the second straight quarter, he said.

"Disciplined cost-control measures and reduced fuel costs have helped improve our operating margins, and effective yield management is filling our Hawaiian charter flights with valued customers," Chamak said.

Overall, the Las Vegas-based company earned $12.8 million, or 15 cents per share, for the three months ended June 30 compared with $21.7 million, or 25 cents per share, a year earlier.

"The uncertainty which exists in the economy today continues to negatively impact consumer spending," President and CEO Keith Smith said in a statement.

But Smith said that the company is continuing to see signs that its business is stabilizing.

Excluding pre-opening expenses and other items, profit was $10.4 million, or 12 cents per share. The adjusted results met Wall Street's expectations.

Analysts forecast earnings of 12 cents per share, according to a Thomson Reuters survey. Analysts' estimates generally exclude one-time items.

Revenue fell 8 percent to $423 million from $460.8 million.

The results missed the Wall Street estimate of $431.6 million.

Shares of Boyd Gaming fell 29 cents, or 2.9 percent, to close at $9.65 yesterday in New York Stock Exchange composite trading.