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Gaming Guru
Gaming Tax Proposal Draws Criticism14 May 2003
Last week, the Business Section of The Detroit News reported wide spread concern about the proposed legislative measure. The News' report included an interview with a visitor from Buffalo, N.Y. who said the proposed additional tax on casino patrons would most definitely discourage him from traveling to Detroit for recreational gambling. He said, "If people are going to come all the way to Detroit and pay taxes, why would they bother coming?" Not only players are upset about the new tax. Detroit Metro Convention & Visitors Bureau President Larry Alexander testified against the legislation before the House Tax Policy. Bureau Spokeswoman Michelle Fusco told The Detroit News, "It would put Detroit at a disadvantage with other casino destinations when we compete for business meetings looking for [casino] entertainment." It is clear that the bill's sponsors believe the legislation will result in additional state revenues. However, MGM Grand Detroit Casino spokesman William Hurt told The Detroit News, "If passed, this proposal could ultimately lower tax revenues to the state. If the State of Michigan desires to increase its tax revenues, it must allow us to compete with other jurisdictions on an even basis." Greektown spokesman Roger Martin told The News that the tax policy is contrary to state tourism efforts. "It amounts to a tax on tourism," Martin said. The legislative proposal now moves to the Michigan Senate where the bill's sponsors will face the daunting task of seeking a tax increase from the Republican controlled Senate, which traditionally has opposed backdoor attempts to tax Michigan businesses. Michigan State University's Tourism Department conducted a survey in 2000 that concluded that 20 percent of the Detroit casino market is from non-resident visitors. The survey results also indicated that the 20 percent who visit and spend tourist dollars in Michigan also tend to incorporate a visit to a Detroit Tiger's, Lion's or Red Wing's game. On average, the Detroit casinos attract 30,000 visitors each day, and some days many more than this. With an average of 20 percent being from out of Michigan, that equates to 6,000 visitors daily. Detroit is heavily dependent on the success of the Detroit casinos and this proposed legislation will be a strong message to non-Michigan visitors to consider spending their dollars in more tourist-friendly communities. This, of course, will lead to a significant loss of gaming tax revenue from the casinos themselves, and a loss of spin-off revenue to the other tourist attractions in town. This legislation will also further erode the state's equine industry at a time when the Legislature has been looking for ways to preserve it. The Detroit casinos and horse racing tracks already pay very heavy state taxes. If Michigan continues to over burden this industry, the state's benefits will begin to diminish. Casinos and gamblers are easy targets for lawmakers seeking revenue. However, too much taxation will hurt these Michigan businesses and put them at a competitive disadvantage with Windsor and other gaming destinations. Let's hope that the Senate doesn't kill the goose that lays the golden eggs by taxing this important new form of state tourism out of existence. Related Links
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David Waddell |
David Waddell |