SHORELINE — The city’s five mini-casinos will be given a six-month gambling tax reduction, from 11 to 10 percent.
The Feb. 7 City Council decision to temporarily lower the gambling tax came after casino owners and operators previously requested a gambling tax reduction, from 11 to 9 percent, for two years. They claimed their businesses were no longer profitable.
“For the first time, we are asking the city for help,” Larry Wheaton, representing Goldie’s Casino, told the Council. “It comes down to Shoreline receiving 7-9 percent of something, or a percent of nothing.”
There are five operating casinos in the city, including Drift on Inn, Goldie’s, Parker’s, Golden Nugget and Club Hollywood Casino. The Hideaway recently closed, but is expected to eventually open as a Silver Dollar Casino, according to city staff.
Mark Mitchell, owner of Club Hollywood and Drift On Inn, said card rooms have drastically changed since the 1970s, when the 11-percent tax was established. He said while there used to be few casino employees, there are now hundreds.
“We are the sixth biggest taxpayers in Shoreline,” Mitchell said. “The Hideaway just went broke.”
Resident Mark Deutsch encouraged Council members to consider the economic development factor, especially since there still is no economic development director. With a tight budget, Deutsch warned that lowering the tax might not be a one-time remedy. He also encouraged the Council to consider the gambling industry and adult entertainment, and whether it deserved city support.
“Is that what we want Shoreline to be known for?” Deutsch asked.
During the staff report, finance director Debbie Tarry said that the 2005 city budget includes about $3 million of revenue from gambling taxes, or 10 percent of general fund revenue. Each 1 percent of card room gambling tax is approximately $240,000.
Tarry outlined three options for the Council, including:
• Directing staff to further analyze the profitability of casinos, which would require audited financial statements that could cost thousands of dollars.
• Changing the current 11-percent gambling tax without further analysis.
• Making no change to the 11- percent rate, as recommended by staff.
Council member Bob Ransom initially proposed a 10-percent gambling tax rate for all established casinos in the city. He referenced other cities that have either lowered or increased their gambling tax to 10 percent.
“The list of the 123 casinos (30 closed) show that the current rates are going down to 10 percent from those that are higher, and ones like Everett that were a lower 5 percent are going up to 10 percent,” Ransom said. “The median and mode are 10 percent.”
Council member Maggie Fimia proposed the six-month time limit on the reduction, which would be enacted in March. Fimia also asked that an analysis be undertaken, and a schedule established to thoroughly review the gambling tax.
“This is a timely issue,” Fimia said. “These folks came to us months ago.”
Some concerns of other Council members were that additional analysis was needed, and lowering the tax would result in a reduced budget that would require cutting programs.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
