Waters wanted to earmark the additional revenue for a variety of public purposes, including building roads, increasing teacher salaries, developing solar and geothermal energy, bringing additional water to Nevada and paying property taxes on every owner-occupied residence in the state.

But Maddox said it would be unconstitutional to delegate to other states the authority to determine the gaming tax rate for Nevada.

"It would be a watershed change in the way we do things," said the judge, who made his decision before Waters completed his arguments.

Maddox mentioned he liked Waters' idea of using 10 percent of the additional revenue to cover costs of courts in the state, but he declared that the laundry list of ways to spend the taxes violated the single-subject law.

"They are all individually good ideas, but they are separate subjects," the judge said.

If Waters wanted to circulate a petition that increased the gaming tax rate to 40 percent and did not specify where the money would be spent, then that "would be fine," Maddox said.

After the hearing, Waters said he would switch to "Plan B," but he declined to elaborate on what that involves.

"We are not giving up," he added.

Waters' two petitions were challenged by the Nevada Resort Association, the organization that represents many of the large casinos in the state.

During arguments Friday, Nevada Resort Association lawyer Todd Bice invoked the founding fathers, declaring Waters' plan to let other states set Nevada's tax rate as "taxation without representation."

Waters, however, argued that his plan was the "ultimate form of representation" since Nevada voters themselves would decide whether they wanted it.

To qualify for the ballot, Waters needed to collect 58,836 valid signatures for his petitions by May 20.

Then voters in November and again in 2010 would have to approve the plan to amend the state constitution. The new tax procedure would not have been implemented before 2011.

In past interviews, Waters said he circulated the petitions because it offered the only way to increase gaming taxes in Nevada, which he said has the lowest gaming taxes in the country.

Waters said the Legislature won't increase gaming taxes for necessary projects because it is controlled by the gaming industry.

He argued Friday that the Legislature regularly violates a law that requires bills deal with a single subject.

Maddox said that may be true, but that it is an issue that ultimately should be heard by the Nevada Supreme Court.

He noted the Supreme Court had upheld the law requiring petitions deal with a single subject in a 2006 decision on a petition that would have limited government spending.

In making his decision, Maddox mentioned that Senior Supreme Court Justice Miriam Shearing, acting as a district judge, last month threw out a Nevada State Education Association petition to raise the gaming tax rate because it also violated the single-subject law.

But the teachers union in early February filed a new petition with the secretary of state. This second petition also would increase the gaming tax rate and earmark the additional money to increase the salaries of school employees other than administrators.

A gaming industry challenge to the latest teachers' petition is expected next week.

With Maddox ruling quickly, Bice wasted little time on arguments against the petitions.

Bice did say the formula that Waters wanted to use to set the gaming tax rate could be used by other states to curtail gaming in Nevada. Other states could set a 99 percent tax rate on the last gaming tax dollar they receive each year, and that would become the overall rate for all gaming taxes in Nevada, he said.

"All the casinos would be wiped out," Bice said.