New analysis eliminates GCP Board concern about alleged tax exemption in casino proposal

Monday, October 05, 2009

Cleveland, Ohio—All wagering—including cash bets--in the four Ohio casinos proposed in State Issue 3 would be subject to the state’s gross casino tax, according to an analysis prepared in response to questions raised by the Greater Cleveland Partnership Board of Directors. The Spectrum Gaming Group—an internationally-known gaming-industry consultancy—looked into this concern to answer questions raised by GCP Board members after Issue 3 opponents alleged that cash wagers might be exempt from taxation.

“We wanted to be sure that this concern has been thoroughly researched,” said Joe Roman, the GCP’s president and CEO. “Our Board voted to endorse this issue because of its potential to have a long-term positive economic impact on Northeast Ohio. It’s important to clarify that tax revenue from cash wagers are part of the package.”

“The definition of Gross Casino Revenue is broad, and encompasses cash wagering, making such wagering subject to the 33 percent tax,” wrote Spectrum’s Rick McDonough in a letter to the GCP. “Any other reading of the amendment flies in the face of the clear intention of the amendment and is both illogical and erroneous,” he said.  Click here to read the letter.

The analysis also stated that: “Given the undisputed premise that the motivation for the proposed constitutional amendment is the desire to create jobs and to generate new sources of tax revenue for cities, counties, public school districts, law enforcement and the horse racing industry, it is clear there is no intention to create an exemption, nor is there an exemption, for cash wagering that could result in the loss of potential tax income...The language of the amendment itself makes it clear that any cash wagers must be considered gross casino revenue and subject to taxation.”

Roman observed that this clarification is important because it addresses the bottom-line of the ability of a casino to provide revenues for Cleveland, Cuyahoga County and public schools. “This project represents a multi-million dollar investment in our community’s future,” he said, “which can contribute to our economy for many years to come.”

As an association of business members, the Greater Cleveland Partnership mobilizes private-sector leadership, expertise and resources to create jobs and leverage investment to improve the economic vitality of the region.

 

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