County considers lower gambling tax

The house’s take could be getting a little bigger.

Spokane County commissioners are considering lowering card room gambling taxes from 15 percent of the gross to 5 percent as part of a bid to regain lost gambling tax revenue by luring new card rooms and helping them better compete with tribal gaming operations.

Commissioners also discussed Tuesday the possibility of eliminating gambling taxes entirely for nonprofit groups operating bingo halls.

A hearing on the issue will be held, but no date has been set.

The county used to earn about $1 million in gambling taxes, said County CEO Marshall Farnell. But that figure has dropped to just $125,000 in receipts on pull tabs since Spokane Valley incorporated, absorbing card rooms like those at Aces Casino and Players and Spectators.

There are now no casinos or bingo halls in unincorporated Spokane County.

Five percent of something is better than 15 percent of nothing, said Commissioner Todd Mielke, who said lowering the gambling tax could encourage new casinos to open or lure existing casinos to move to unincorporated areas.

Tuesday’s discussion was prompted by a potential casino owner’s remarks to Commissioner Mark Richard.

“We should look at doing something to be competitive, and get some revenue,” Richard said, by persuading that person to locate in unincorporated Spokane County, where the county would collect the gambling tax.

Richard wouldn’t disclose the individual’s name because he’s still in the process of property negotiations.

Casino owner H.T. Higgins said reducing the tax is a great idea.

Higgins’ family owns Big Daddy’s on Spokane’s South Hill. He says that he was unable to offer health coverage to his employees this year, but that a lower tax might have made health insurance affordable.

Spokane’s gambling tax is 20 percent of gross receipts, which is twice the rate of Spokane Valley’s tax and 5 percentage points more than the current unincorporated county’s tax.

Just two months after being elected, Spokane Valley’s first City Council reduced its card room tax from 15 percent to 10 percent, with some saying it could save jobs. Players and Spectators contributed to six of the seven council members’ election campaigns.

Would Higgins move his business, which also includes a bowling alley and restaurant, if Spokane County lowered its rate to 5 percent?

Higgins was noncommittal but said a lower tax would make a huge difference in how he could operate his business.

“The city of Spokane is unreasonable,” he said.

Many private card room owners and nonprofit groups have complained that it’s difficult to compete against tribal casinos, which are exempt from local taxes.

The Kalispel Tribe’s Northern Quest Casino pays only a 2 percent impact fee on net gambling returns to Airway Heights. To date, that has amounted to about $1.7 million, said casino spokeswoman Jennifer Simmons.

Northern Quest Casino contributes in other ways, however, including boosting local retail sales and creating jobs, Simmons said.

Lowering taxes would help private casinos compete, Commissioner Phil Harris said.

“It’s not whether I’m pro-gambling or not. It has to do with fairness,” he said.