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January 12, 2009 / jimnv

Privatize Some Casino Audits

The Gaming Control Board’s – Audit Division does financial audits of Nevada’s casinos, certainly a vital function of the Board. Unfortunately, because of the budget problems it can’t do the number of audits it used to or would like to do. Therefore, I propose the State of Nevada contract with a qualified firm or series of firms to perform gaming audits of Nevada’s casinos. This would be along the lines of energy efficiency and medical billing audits where the company would get a percentage of the unpaid taxes as payment for services rendered. This would undoubtedly uncover lots of cash the state sorely needs to operate.

I do not propose laying off state auditors. The are still needed to do audits because private firms can’t do them all, plus they have the authority to apply the applicable statutes and regulations. They also need to oversee the private auditors and take appropriate legal measures to collect the taxes owed.

Am I saying casinos don’t accurately report income? Yes!   They have been “mis-characterizing” income since their legal beginning in the 1930’s. That is why there are auditing provisions in the statutes, “Licensing and Control of Gaming”. Let’s make sure Nevada collects the gaming tax it needs which, by the way, is the lowest gaming tax percentage nationwide, probably planet-wide. Further, Nevada’s 6.75 percent figure is a maximum amount, many pay less.

FYI: These are some gaming tax percentages in the nation: Colorado, up to 20%, Illinois, 15-50 %, Indiana, 15-35 %, Iowa, up to 22 %, Louisiana, 15.5 %, Maine, 47.8 %, Michigan, 24%, Mississippi, 24 %, Missouri, 20%, New Mexico, 45.24%, New Jersey, 9.25%, New York, 70.3%, Oklahoma, 41%, Pennsylvania 34%, Rhode Island, 75.6%, South Dakota, 8% and West Virginia, 57.80%.

Based on the percentage figures above and including Nevada’s, the nationwide average gaming tax is 30.62 percent.

Source for the raw figures unsed here: American Gaming Association


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