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Gaming Guru

Howard Stutz

Wynn reiterates: Nevada casinos "in ill health"

15 May 2013

LAS VEGAS -- Wynn Resorts, Limited Chairman Steve Wynn defended his recent remarks to Nevada lawmakers on the health of the gaming industry while voicing support for a broad-based tax on all companies and businesses earning more than $1 million annually.

Wynn, who traveled to Carson City on May 1 and met behind closed doors with the governor and legislative leaders, said in an interview Monday evening that the gaming industry “would be of one mind and would support” a broad-based business tax of 0.5 percent on all companies, including hotel-casinos, manufacturers, mining, supermarkets and other service industries.

He said the modified business tax, also known as the payroll tax, should be eliminated and replaced by a broad-based business tax.

“Everyone would pay it. It’s that simple,” Wynn, 71, said during a wide-ranging interview that initially was focused on his company’s expansion efforts in Boston and Philadelphia. “The answer is a thin, broad-based answer. Everyone would pay a half-percent on gross receipts.”

Wynn estimated the tax would raise “between $300 million and $500 million” during a biennium.

Wynn repeated his statements made in Carson City that Nevada’s casino industry “is in ill health” and that it needs time “to climb out of this slowly.” He said the remarks weren’t directed at any perceived attempt to raise the state’s gaming tax above the current 6.75 percent level.

Wynn said unnecessary costs on the casino operators, such as the payroll tax, kills the industry’s recovery.

He cited the Gaming Control Board’s annual Gaming Abstract Report, which compares revenues and income produced by casinos generating more than $1 million in gaming revenues during the fiscal year.

The most recent abstract, released in January, showed the state’s casino industry reporting a net loss of $1.21 billion in fiscal 2012, which compared with a net loss of $4 billion in fiscal 2011.

Wynn said Wynn Resorts is exploring expansion opportunities outside Nevada “as a way to broaden the base of the company.”

While Wynn Las Vegas and Encore make up the company’s headquarters, the bulk of Wynn Resorts’ annual revenues and profit come from Macau.

In the first quarter, revenue from Wynn Macau operations rose 4.4 percent to $992.1 million. Overall, the company reported $1.38 billion in revenues.

During his trip to Carson City, Wynn met privately with lawmakers in a vacant Legislative Building office, spoke briefly with reporters, and then met with Senate Minority Leader Michael Roberson, R-Las Vegas.

Wynn said he also met with lobbyists from the gaming industry and discussed his tax ideas. He said he was opposed to targeting the mining industry for a tax increase, because he doesn’t favor “singling out” one industry.

“In my opinion, a broad-based business tax wouldn’t hurt,” Wynn said. “It’s like getting a flu shot. The needle is thin and it doesn’t hurt.”

Wynn also said Nevada “needs to do a better job” of funding education.

“It’s not OK with me that we have 35 kids in a classroom,” he said.

Wynn supported remarks made on May 8 by his former wife, Elaine Wynn, to the Las Vegas Metro Chamber of Commerce.

Elaine Wynn, president of the State Board of Education, said Nevada schools “are grossly underfunded.”

“Elaine has spent 20 years of her life trying to fix education,” Steve Wynn said. “We have a fiscal problem here, and everyone needs to chip in.”