Swift passage through Senate
The Louisiana Senate has approved Senate Bill 5, legislation that will provide tax relief to the struggling casino industry. The measure, passed by a 26-8 vote (five absent) on Wednesday, would give casinos in the state an $83m tax break over a five-year time frame. The goal is to help gaming operators stay afloat after they were forced to shut down during the COVID-19 pandemic.
$5m in promotional play credits per year tax-free
Introduced by Senator Ronnie Johns, a Republican from Lake Charles, the bill would allow casinos to issue as much as $5m in promotional play credits per year tax-free. Gross gaming revenues, toward which promotional play credits normally count, are taxed at 21.5%.
Louisiana casinos hit hard by COVID-19
The gaming industry in Louisiana employs almost 20,000 people; many their jobs are at risk because of the pandemic. COVID-19 forced casinos to shut down back in mid-March and even after just a couple months of non-operation, the state’s 2020 gross gaming revenue is down $122m through May 17.
During an earlier vote in the Review and Fiscal Affairs Committee, Senator Ronnie Johns pointed out how Senate Bill 5 will help to offset some of the losses suffered by casinos during the closure. Already, one casino in the state has closed because of the financial effects of the pandemic: DiamondJacks of Bossier City announced last month that business circumstances have forced a permanent closure.
Concern relief method
Senator Karen Carter Peterson was the most vocal opponent of the casino tax relief bill. Peterson argued that the bill is a risky solution, as it allows gaming operators to lure potential problem gamblers with promotional credits.
The Senator said:
Everybody in here, whether you’re on the committee or in the audience, knows someone who has ruined their family, who has spent all of their retirement money because of gambling.”
Peterson pointed out that the Senate cannot ignore gambling problems. She has struggled with her own gambling addictions in the past and knows firsthand how people can be affected. She asked that committee members think of ways to support addicts who cannot afford the help they need.
Moving forward
Despite Senator Peterson’s opposition, the bill still passed easily. A fiscal analysis of the bill concluded that it will save casinos $11.2m in the 2020-21 fiscal year. The next fiscal year would see $16.2m in savings, followed by $18.6m for the next two years.
The bill now must clear a review by the House and be voted on before the special session adjourns in just two weeks.