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Dec. 14, 2007
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TOURISM CONFERENCE: Bosses unite over gaming tax

Casino execs say increase would hurt Nevada

By BENJAMIN SPILLMAN
REVIEW-JOURNAL

Bill Weidner, left, president of Las Vegas Sands Corp., speaks Thursday during a conference on Tourism held at the Caesars Palace.
Photo by The Associated Press.

The most powerful resort chieftains in Las Vegas are bracing for tight times in 2008 and aren't interested in sharing more of their gambling haul with Nevada's schools.

That was the gist of a public powwow between the leaders of Las Vegas Sands Corp., Boyd Gaming Corp. and MGM Mirage -- three companies in the midst of spending more than $14 billion on three new Strip resorts.

The talk was part of a conference on Nevada tourism and meant to probe the thoughts of gambling executives on the continued resort development boom in Las Vegas.

It turned into the executives using the forum to slam a proposal by the state's biggest teachers union to raise gambling taxes to 9.75 percent in 2011, up from 6.75 percent.

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    • Teachers say the money would help move Nevada schools from the back of the pack nationally by raising about $250 million annually for higher teacher pay, class-size reductions and anti-dropout programs.

    The gambling executives characterize the proposal as a 44 percent tax increase that would put the chill on the kind of resort building boom that has raised Nevada's profile from cowboy gambling outpost to a global resort destination that attracted more than 52 million visitors last year.

    "It will ruin this state," said Bill Weidner, president and chief operating officer of Las Vegas Sands Corp., the company that owns The Venetian and the Sands Expo and Convention Center and is putting the finishing touches on the $1.8 billion Palazzo. "We have to fight back, not pretend like we want to compromise."

    The casino bosses complimented Gov. Jim Gibbons, who has pledged to avert a projected $285 million state budget shortfall without raising taxes. But Terry Lanni, chairman and CEO of MGM Mirage, acknowledged disagreements with the governor yet pledged continued loyalty should Gibbons seek another term in office.

    Gibbons, who sat in the front row in the Caesars Palace ballroom where the talk was held, clapped when Weidner said casinos would invest less in Nevada if taxes went up.

    Lanni and Keith Smith, president and chief operating officer of Boyd Gaming, differed from Weidner on how the state should raise revenue for things such as schools, roads and government services.

    Weidner said he supported Gibbons adherence to his no-tax pledge. Lanni and Smith, to varying degrees, were open to the notion of a broad-based business or corporate tax.

    Smith said the lack of a business tax lures enterprise to Nevada but, "that doesn't help fund the impacts that are created by those businesses."

    Smith and Lanni also differed from Weidner on whether to wrest control of the Las Vegas Convention Center from the publicly run Las Vegas Convention and Visitors Authority and sell it to private interests.

    Weidner supports the plan partly because he believes the convention center could wring more money from visiting events by charging rates similar to the Sands Expo and Convention Center or Mandalay Bay Convention Center, two large private local convention centers.

    Weidner said privatizing the convention center would allow the state to redirect about $120 million in room taxes annually from operations to averting a budget shortfall.

    Lanni and Smith disagreed. They said the success of the publicly run center helped their companies grow into multibillion-dollar behemoths capable of hosting their own conventions. But the center is still important to attracting business that goes to smaller hotels and remains effective at putting heads in beds throughout Las Vegas.

    "The convention authority has been a large part of the success of Las Vegas over the years," Smith said. "We've all taken advantage of that."

    Lanni did say, however, that if budget belt-tightening is required, the convention authority and convention center shouldn't be immune to cuts.

    "I think, probably, that is well worth looking into," Lanni said.

    He also said he suspects MGM Mirage, with 10 hotel-casinos on the Strip, will be doing some belt-tightening of its own in 2008. Lanni expects that the residential real estate slump, tumultuous global credit markets and rising oil prices could sap enthusiasm -- and disposable cash -- people and companies need to visit Las Vegas.

    "We are not going to add positions," Lanni said during an interview after the talk. "We have departments with 'x' number of people, we are going to leave them at that."

    As for the outcome of the tax debate, that's up to the voters. In addition to the teacher proposal, there is another proposal to raise taxes on gambling revenue to more than 20 percent.

    Both are expected to wind up on ballots in November. So far, polls suggest voters favor raising taxes on casinos for the benefit of schools.

    Lynn Warne, president of the Nevada State Education Association, the teachers union behind the more modest tax petition, said voters are more than willing to move money from craps to classrooms.

    "The gamers are enjoying the lowest tax rate not only in the country but the world, and our schools are suffering," Warne said.

    Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or (702) 477-3861.

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    Patte wrote on December 14, 2007 04:20 PM: Personally, I don't think the teachers deserve another dime. They are overpaid whiners, at least the union is.
    But when Lanni and Smith (Laurel and Hardy?) AGREE with raising taxes and starting a corporate income tax which really WILL ruin Nevada(DUH), They can Kiss my Grits! We Don't need more taxes for marble and granite mansion
    schools, staffed by teachers who think the sun rises and sets on them and THEIR needs. WHO CARES????
    NO NEW TAXES! If Lanni and Smith do not
    switch positions I will vote for the
    bill that eliminates my property taxes.
    2003 Karma Lanni and Smith.


    Ken wrote on December 14, 2007 04:07 PM: I think the teachers' union is very naive to think that the goose (casinos) that lays the golden egg has deep pockets that can finance them out of their financial straits. The timing of the petition could not come at a worse time. I believe the Vegas casino industry will be facing some tough times ahead. We see signs of it already with Harrah's scandal and Tropicana inability to renew their gambling license due to them cutting corners to pay back their huge debt. I think the other casinos will follow suit. When it does, the State will either raise our taxes or modify the proposed increased eventually. Sales tax revenue this has also dropped forcing our govenor to cut spending. So, why tinker with the casino tax rate? Since most here are retirees and senior citizens, the burden rests with those that have children .... period. I predict the petition will fail for these reasons. You do not raise taxes during tough times to come. Las Vegas is no longer the boom-town we were led to believe it was a few years ago.


    Tom, Burbank wrote on December 14, 2007 02:05 PM: Tami, thanks for the clarification. I was so confused. The casinos can afford a higher tax, but not one that would go exclusively to schools. The education industry in California is strangling the state. More funding means more administration, more unelected bureaucracy and more fraud. Any time adults hide behind children to raise taxes, be sure there's more going on behind the scenes.


    David wrote on December 14, 2007 01:23 PM: Gibbons, who sat in the front row in the Caesars Palace ballroom where the talk was held, clapped when Weidner said casinos would invest less in Nevada if taxes went up.

    And where would casinos invest, if not in Nevada? Illinois perhaps, where the gaming tax approaches 50%.


    RonNV wrote on December 14, 2007 12:55 PM: Leave the tax where it is. The casinos generate plenty of jobs. We can tighten our belts and stop the expansion of government jobs. Look at the mess that other states are in since they caved in to the teachers union.


    Stan Welch wrote on December 14, 2007 11:15 AM: I'm not sold on saddling our gaming partners with such a burden nor am I willing to bank my children's education on an unpredictable source of funding. For these reasons I'll be doing more research and look to hearing more from all sides.


    Tami wrote on December 14, 2007 11:10 AM: He meant "Ghost Town" and a completely agree with him. This should be a shared tax between all business and not just casinos. This is a declining market with casinos and you'll slit your own throats if you impose this unfair tax upon them. If it weren't for the casinos, there would be no employment in NV or kids to go to school...so that the teachers can have jobs. Be very careful how you vote on this one...


    Tami wrote on December 14, 2007 11:08 AM: He meant "ghost town" obviously and I agree with him. This needs to be a shared tax between all corporations. The casinos are the reason that the teachers have jobs! Without the casinos, there would be no furniture stores, restaurants, shopping centers, etc. Don't slit your own throats with greed from casinos...


    Tom, Burbank wrote on December 14, 2007 10:44 AM: What's a goast?


    x wrote on December 14, 2007 08:19 AM: As a native I am so sick and tired of the casino's getting a bad rap. The casino's built and sustain this entire city. I you don't like it LEAVE! I support and belong to a union, but the teacher's union is the problem with the schools here and accross the country. Every time anyone comes up with a good plan to get more money and better schools, it is the union that knocks it down. Unless you want a goast town here, leave the casino's alone and while your at it....leave my yard alone also!


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