Job growth in Nevada has led the nation for a dozen consecutive months. Unemployment is down and wages are up. From Resorts World to the new home of the Raiders at Mid-Air Engine Failure Field to assorted conference and convention space renovations and more, some $20 billion worth of projects are in the works in Southern Nevada,
And you know what all that’s good for?
“These robust economic factors are also fueling what is a very strong and resilient Las Vegas locals gaming market,” the chief financial officer for Red Rock Resorts, the parent company of Station Casinos, explained during a quarterly earnings presentation last week.
“These positive economic trends, along with a very favorable supply demand dynamic, stable regulatory environment and the lowest-gaming tax rate in the nation, only serve to support our view that the Las Vegas locals market is the most attractive gaming market in the United States,” said CFO Stephen Cootey, according to a transcript of a conference call with investors and analysts.
“And with our best-in-class assets and locations, unparalleled distribution and scale and deep organic development pipeline, we remain…”
…wait … what? Did Cootey say the lowest gaming tax rate in the nation?
Oh let’s just list ‘em.
State Gaming Tax Rates
|Delaware||58% - machines|
20% - table games
|Iowa||22%||New York||45% - machines|
10% - table games
|Maine||46% - machine|
16% - table games
|Maryland||61% - machines|
20% - table games
|Rhode Island||28.5% - machines|
16% - table games
|Michigan||19%||West Virginia||53.5% - machines|
35% - table games
Yup. Nevada. 6.75 percent. Lowest in the nation. Easily.
Nice work, everyone.
These rates are according to the American Gaming Association (AGA) 2019 “State of the States” report. There are a lot of different rates for racinos or riverboats and such. The rates shown above are the highest rates, that is, those that would apply to what we in Nevada would consider a regular grown-up casino.
Red Rock Slots, er, Resorts isn’t in China (yet?), but MGM, Sands and Wynn are. They’ve somehow managed to build Macau into the world’s largest gambling market, as measured by revenue, a magnificent achievement considering they are laboring under what must assuredly be an onerous and burdensome gaming tax rate of 35 percent.
Nevada can at least take comfort in still being the largest gambling market in the U.S., with nearly $12 billion in total revenue last year. No other state came remotely close. Only one other state broke $3 billion, and in most states, gambling revenue was less than a billion, according to the AGA.
And your Nevada gambling industry paid $850.6 million in state gaming taxes last year.
Quiz! Which states collected more gaming tax money, in total American dollars, than Nevada?
A: None of them because Nevada’s gambling revenue is ginormously larger than every other state so how could any other state possibly generate more tax revenue than Nevada, or…
B: Oh no this is going to be humiliating for Nevada but go ahead and tell us anyway.
That’s right. B.
Pennsylvania collected almost $1.5 billion in gaming taxes — the most of any state, not far from double the industry’s gaming tax contribution to Nevada’s state budget, and on a paltry (by Nevada standards) $3.2 billion in gambling revenue. At $1.1 billion, New York’s state budget also got more from the gambling industry than Nevada, even though New York’s gambling revenue, $2.6 billion, was about a fifth of that in Nevada.
Maryland gets an honorable mention for collecting $709 million in gambling taxes, almost as much as the industry paid in Nevada, but with only about 14 percent as much gambling revenue.
As noted above, state tax rates vary for different types of gambling. Rates are tiered in Nevada too, but nobody really pays much attention because the vast majority of gambling in Nevada is taxed at the 6.75 percent rate.
One differentiation in rates Nevada does not have but some states do, is that wherein machines are taxed at higher — sometimes much higher — rates than table games.
Which brings us back to … Station Casinos. Sort of.
Some of us — and you know who you are — may have wondered, If not for problem and pathological gamblers who live for time on the machine, would Station even still be in business?
Alas, if anyone knows, it’s Station, and they would never say. The Nevada Gaming Commission could probably make them say. But it hasn’t.
The prevalence of problem and pathological gambling, you see, is something Official Nevada pretty aggressively does not want to know. There hasn’t been a study of the issue since one in 2002, but since it’s the only study we’ve got let’s use it.
The research found the “combined prevalence of current problem and probable pathological gambling” in Nevada was 6.4 percent in 2000. That was substantially higher than other markets studied around the same time.
Maybe it’s higher now, maybe it’s lower now, but whether it’s 6.4 percent of adults or half that or twice that or whatever the prevalence, it seems fair to assume a much higher concentration of those gamblers will populate a neighborhood casino chock full o’ video poker machines at any given time, no? Another fair assumption is those folks gamble more frequently and for longer periods of time than other folks and … yeah, maybe Station would be in the black without problem and pathological gamblers but then again maybe not and again, Nevada doesn’t want to know.
If Nevada did know, however, it might be an argument for emulating the practice of other states and jacking up the gaming tax on machines to much higher rates than that on table games.
(Oh, and just one word: Dotty’s.)
Meanwhile, not everything is awesome.
Nevada has the nation’s worst mental health services, woefully inadequate public transit, a homeless crisis, an affordable housing crisis generally, almost no support for child or elder care, a justice system that needs to prey on poor people or judges won’t get paid … I could go on and on but let’s face it if you’re the sort of person who gets this far into one of my columns you could too.
All those systemic barriers make life even harder for a workforce which has seen some of the nation’s fastest job growth, but slowest wage growth, and which is still more precarious and part-time than before the Crash.
Red Rock Video Poker Warehouses, er, Resorts, doesn’t see any of that as a problem.
“It’s a very unique supply demand situation in the Las Vegas Valley,” Red Rock Resorts Chairman and CEO Frank Fertitta told analysts during the earnings presentation. A law was passed in the late 20th century when Southern Nevadans were kind of freaking out about, well, Station popping up all over. As a result of that law, Fertitta explained, Nevada “limits where local casinos can be built.
“We own and control most of the future pipeline of where that growth can take place,” Fertitta boasted.