Trying to bridge a state budget gap, Gov. James E. McGreevey proposed a casino tax Monday that would cost Atlantic City casinos at least $135 million this year, cutting into its net profit and reducing its cash flow by 11 percent. McGreevey says he wants to raise casino revenue tax to 10 percent from 8 percent, impose a sales tax on the rooms, meals and other incentives casinos give free to their best patrons, and also impose a 7 percent occupancy tax on hotel rooms statewide. Experts said the timing is bad for the casino industry as it comes off a year in which revenue grew only 2.4 percent and casino-style gambling is likely to spread to neighboring states. Dennis Gomes, president of the Casino Association of New Jersey, called the plan “a ridiculous proposition.” According to Gomes, it would hinder expansion, scare investors, cause job cuts and threaten weak casinos – ultimately resulting in less money for social programs funded by the state gaming tax. The casino-revenue tax rate in Atlantic City hasn’t changed since the first casino opened 25 years ago.
Internet Gaming Bills Could Go to House Soon
On the first day of the 108th session of Congress, Jan. 7, Rep. James Leach introduced a bill–similar to the one he introduced last year–that would prohibit online gambling. The bill could go to the U.S. House of Representatives soon. Leach’s new bill, HR 21, would make Internet gambling illegal by virtually all payment methods now used by players to finance their online gaming. Credit cards, wire transfers and all other bank instruments Roobet Crash would become illegal for online gaming merchants to accept from U.S. players. A source from within the legislative process, who spoke to Interactive Gaming News, said Rep. Michael Oxley, who is the chairman of the House Financial Services Committee, would like to put the Leach bill on the suspension calendar. If that happens, the bill would go directly to the House floor and would be subjected to limited debate. It would need a two-thirds majority vote to pass. Hearing the bill on suspension would likely be blocked by Rep. Barney Frank and Rep. John Conyers, who are both opposed to the Leach bill. Conyers is also planning to reintroduce a bill he had offered in the last session of Congress. Conyers’ bill aims to establish a commission to study Internet gambling to see if there is a way to regulate it in the United States.