Just for fun, ask yourself which of the following groups of Coloradans you’d give a tax cut to if you had the chance:
A) Farmers who have been hard-pressed by extreme weather conditions ranging from droughts to blizzards.
B) Working families struggling to survive on minimum wage jobs.
C) Casino operators who are grossing at least $5 million a year in revenue.
We doubt very much that any of you answered “C” unless they happen to own a casino. Yet the Colorado gaming commission is studying just such a giveaway to the gambling lobby under the dubious rubric of helping “mom-and-pop casinos.”
We gag on that very term. Our moms may play a mean hand of bridge, but none of them owned a casino. That folksy language is just a political cloaking device drawn over what would actually be a tax cut for every casino in Colorado – including the wealthiest.
The industry has found a sympathetic ear for its plea in the Colorado Limited Gaming Control Commission. Chairman Jim Alderden said recently the body is studying whether a lower tax rate would help small and medium-sized casinos that are struggling to compete against larger gambling operations.
The simple fact is that small casinos already enjoy a major tax advantage over their larger competitors. Under the current tax structure, the first $2 million a casino generates is taxed at 0.25 percent; $2 million to $4 million is taxed at 2 percent; $4 million to $5 million is taxed at 4 percent; $5 million to $10 million is taxed at 11 percent; $10 million to $15 million is taxed at 16 percent; and $15 million and above is taxed at 20 percent.
Eliminating all tax on the first $5 million of gross revenue would only save a small casino $85,000. But since a casino grossing $20 million would also get the same $85,000 tax cut, there would be no competitive advantage for the small operator. But the tax cut would reduce the money going to state and local governments, including funds that go to the cities and counties that host the casinos and their neighbors to help pay for the impact of gambling on local communities.
The existing tax will remain in place at least until July 1, 2008. At a bare minimum, the gaming commission should consult with the Colorado legislature and Gov. Bill Ritter before unilaterally cutting casino taxes and, in the process, weakening the cities and counties that have to support the casinos with services ranging from streets and highways to law enforcement.
