Several companies are vying for one of the first casino licenses to be made available in Massachusetts. Two of the competitors, Las Vegas-based Wynn and MGM, are appealing to legislators to amend the state’s income tax laws, which according to Wynn and MGM, will be bad for business.
According to The Associated Press, the two companies want the state to repeal a tax information reporting provision that requires gambling facilities to withhold and report 5 percent of certain winnings exceeding $600 for state income tax. They claim that the current state tax law could deter customers, as facilities in surrounding states adhere to lower standards that closely match federal regulations.
Not only could the provision be harmful for casino revenue, but it could present administrative challenges. MGM and Wynn allege that gambling facilities will need to halt play often, as a tax form will need to be given to each player who reaches the threshold.
“It’s functionally impossible to interrupt play after each hand to administer reporting or withholding,” a letter from Wynn to state regulators read.
Regulators agree with MGM and Wynn
A few revenue officials for Massachusetts agree with the two casinos.
“We anticipate that Massachusetts will follow the practice used in other states,” said Maryann Merigan, a spokesperson for the Massachusetts Department of Revenue.
Additionally, the Massachusetts Gaming Commission, an independent governing body that has taken note of the request, said the claims are not unfounded. Commission Chairman Stephen Crosby asserted that the best route is to align with the federal standards, as the current tax reporting provision presents both administrative issues and problems for competition.
Competing casinos agree with the law
Although Wynn and MGM have some allies, others see fit to comply with the current regulations. In particular, Mohegan Sun, a tribe-owned casino operator and a competitor for the Boston-area license, said it sees no problem with the existing provision. Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority, agreed and said the rules were well established prior to the availability of the licenses and Wynn simply wants to bend the rules.
Residents fall on either side of the argument, and some believe that the winnings should be taxed as long as the provision acknowledges the impact on customers. Others have no grievances at all because of the added benefit of having a closer gambling facility.
“I’m old,” Tom Tomszyk, a Revere resident and customer of Suffolk Downs, an East Boston horse racing track, told the AP. “I live half a mile from here. I’m not going to go to Connecticut. The ride’s too much. I’m still coming here.”
