Local card room owners were dealt a royal flush Tuesday.
Spokane County commissioners slashed the county’s tax on commercial gambling operations from 15 percent to 2 percent, saying they want to make sure local businesses can remain competitive with tribal gaming.
Card room operators, who came out in force to support a tax cut, appeared stunned by the extent of their good fortune. Most said they expected a cut to 5 or 10 percent, not 2 percent.
Though commissioners said they didn’t make the tax cut to encourage card rooms to relocate from other jurisdictions into Spokane County, the move will likely have that effect.
“I can’t afford not to move,” said H.T. Higgins, owner of Big Daddy’s on Spokane’s South Hill.
He now pays the city tax on card rooms – 20 percent of gross gambling receipts. That’s amounted to $1.8 million over the past three years, a period in which Big Daddy’s has lost $500,000, Higgins said.
The county tax applies to punch boards, pull tabs and card room operations in unincorporated parts of the county only.
Commissioners completely eliminated the tax on pull-tab and punch board gambling operated by charitable organizations, saying it doesn’t make sense to tax their good works.
Both cuts take effect Oct. 1. Spokane County made $128,000 on gambling taxes last year, mostly on pull tabs.
Spokane city officials are also considering lowering their gambling tax. If they don’t, Higgins said he won’t stay.
“I’m already looking at possibilities,” he said, adding that lower taxes will enable him to offer employee health benefits.
The cut was first suggested to Commissioner Mark Richard by card room owner Jerry Heggestad.
Heggestad recently moved his business, Ace’s Casino, to the northwest corner of Francis and Division – just outside Spokane’s city limits – in a bet that the tax reduction would happen.
Heggestad testified Tuesday that Ace’s had been losing money at its previous location in Spokane Valley, where the gambling tax rate is 10 percent.
Some at the hearing opposed cutting the tax, saying gambling weakens families and contributes to crime.
“Why should we make it easier for this unsavory industry to grow?” asked Maureen Moberly.
Spokane City Council candidate Nancy McLaughlin urged the commissioners to raise the tax in unincorporated parts of the county to match the city of Spokane’s 20 percent level.
But commissioners and commercial gambling operators said that even if a higher tax forced private mini-casinos out of business, it wouldn’t stop gambling in Spokane County. People will still play the lottery and go to the Kalispel Tribe’s Northern Quest Casino.
“Nothing we do tonight or any other time is going to make a difference with whether gambling is allowed in this community,” said Commissioner Todd Mielke.
Card room accounting manager Dawn Roskam said her casino job saved her family, boosting her off of welfare and food stamps and into an income bracket were she can now afford to raise her six kids herself.
“Two years ago I bought a house,” said Roskam, who was moved to tears as she testified.
Commissioner Phil Harris said protecting those jobs was a key reason he supported the cut.
“I don’t think they’re making that much money,” Harris said of the casinos, “But I’ll tell you who is making money, that’s the employees.”
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