Last Word

he State of Louisiana in America is T proposing an intriguing support measure for casinos — Senate Bill 5. It proposes to give each casino operator in the State a tax break on US$5 million of free ‘promotional play wagers’. At a time when government revenues are stressed due to lower tax receipts, this is quite daring thinking by a government, in my opinion. It supports operators attract patrons, with the ultimate objective of course for patrons to spend money in casinos and thus, via gaming taxes, provide the State of Louisiana with much-needed tax revenues. Successful operators’ promotional marketing programs also help overcome the psychological de-conditioning that’s happened over the last few months of orders for the public to stay home (see my Last Word in issue #138).

There are similarities between this proposed tax break and the promotion run by Derek Stevens — owner of the D, Golden Gate Hotel & Casino, and the soon-to-open Circa Resort & Casino in Downtown Las Vegas — when in the Keep America Flying promotion Mr. Stevens first offered 1,000 free one-way flights to Las Vegas from 20 cities across America. With all flights snapped up in less than two hours of the promotion launch, Mr. Stevens added another 1,000 free flights to Las Vegas…these too were scooped up within hours by enthusiastic patrons. These are exactly the steps required to overcome the effects of psychological de-conditioning of stay-at-home orders.

Governments the world-over have provided fiscal stimulus measures for economies that are unparalleled in previous shocks. I initially advised my clients the Coronavirus pandemic would be 3x as costly to the global economy as the 2008/09 financial crash. I now think it will be more like 5x as costly. As much as governments are providing support to economies across the world, they also need support. Their tax revenues have taken a huge hit. As much as Modern Monetary Theory may provide some solutions, the basic principles are still blatantly obvious — to paydown the debts they’re currently taking on to support private enterprise, governments will need support for many years following this health-induced crisis.

Net effect? Your business operations should plan for increased taxes. If industry associations and our industry play this correctly, this can be a turning point in how politicians perceive our casino industry. If we proactively support governments and actively lobby for the fair increase in taxes on our commercial operations, we can positively move the dial of how politicians perceive our industry. Yes, I’m advising our industry asks government to increase the taxes casinos pay. It’s going to happen anyway, so why not be proactive about it and control the agenda by taking the moral high-ground?