Taxing gamers

The opening last week of The Venetian in Macao was greeted with the international press proclaiming the Chinese version had “eclipsed” Las Vegas.

And when you look at the statistics, it seems apparent Macao will be eclipsing Las Vegas in many respects as it continues to develop.

The $2.4 billion Venetian Macao Resort, which opened a week ago, is larger than its flagship on the Strip. The casino is monstrous and its arena is lining up exhibitions that sports fans here would pay good money to see — namely Roger Federer vs. Pete Sampras.

The Macao administrative region is set to draw at least 25 million visitors this year. The Strip does slightly better for now.

But the opening of the Venetian, coupled with the Wynn and the MGM Grand project to open later this year, should help Macao draw more.

This may be good for Gaming Inc. abroad. But what does it mean back home, particularly in a state that has always regarded Las Vegas as the world’s No. 1 gaming destination?

And more specifically, what does it mean for the taxes that gaming pays?

Raising the gaming tax in Nevada has widespread public support but very little chance of occurring in the current political scheme.

The gamers have always had an argument for why Nevada’s gaming tax needs to be so low. First it was the threat of New Jersey. Then it was the threat of the spread of gambling. Next came Indian casinos and, now racinos.

Other jurisdictions extract double and triple what the gamers pay here on their gross gambling win.

Nevada legislators have heard the excuses for two decades. In 2003, gaming “agreed” to have the gross gaming tax increased by a quarter of a percentage point, if lawmakers also approved new taxes on businesses.

The gaming tax rate of 6.75 percent (for the biggest casinos) has enabled all local gaming companies to expend their empires. And it’s been good for business, whether on riverboats in the Midwest, partnering with tribes in California, and even surviving Katrina on the Gulf Coast.

Most Nevadans viewed these endeavors as good for the local economy as the casino industry religiously spun stories that the spread of gambling would only make more people want to come to Las Vegas — the world’s biggest gaming destination.

Yet parents are increasingly wondering about the foray into China. Sure China is on pace to have the world’s biggest economy. It’s even hosting the Olympics. But consider local parents Tina and Mike Restoni and their view of China.

They worry about toy safety, pet food imports and global warming — not to mention sticky human rights problems.

“I know it’s changing, but I still remember the pictures of the tanks and wonder how different the government is,” Mike Restoni said as he dropped his kids off for school last week. “We’re here trying to stop new coal plants and they’re building new ones every week.

Restoni, an auto mechanic who has three kids in public school, said he has no real problem if Nevada companies want a piece of the Macao market. But his wife, a dental hygienist, isn’t so sure.

“They always get a piece don’t they?” Tina Restoni said. “Maybe they can take some of the money they make in China and put more into the schools.”

The Restonis worry about class sizes in middle school, about bright kids getting ignored so less-capable students can catch up. “There are so many needs, we could talk about it all morning,” Mike Restoni said outside Gibson Middle School. “But I got to go to work.”

The Restonis both support raising the gaming tax. Mike suggested putting it at 8 percent while Tina thinks 10 percent would be better.

Past efforts to raise the gaming tax by ballot initiative have gone nowhere. But the Clark County School District is already preparing to ask voters in 2008 to pass a school bond.

And when voters are asked for more money for schools, they may begin to once again look to someone with deeper pockets.

Of course the gaming industry doesn’t just pay gaming taxes. Casino companies are the largest employer and pay the most sales and property taxes. They also generate the bulk of the state’s live entertainment tax.

That’s the argument that flies so well at the Legislature. And with a governor who has vowed to veto tax increases, lawmakers don’t even try.

As we saw poignantly during this year’s Legislature, the state’s needs continue to outstrip the revenue. You can haggle about what constitutes a real need — whether it’s $4 billion to fund transportation projects or $1 billion to give the state’s superintendents what they say they require to fix the schools.

Raising the gaming tax would help expand the Interstate 15 tourist corridor. And who doesn’t want a better-educated work force? We’ve got to compete with China, after all.

Macao helps remind us of that. And as it grows, so too will calls to bring that money home.

Erin Neff’s column runs Sunday, Tuesday and Thursday. She can be reached at (702) 387-2906, or by e-mail at eneff@reviewjournal.com.