Remember the days when everyone in Las Vegas had a job, the valley was growing like gangbusters … and big-government boosters demanded punitive tax rates on the Strip’s gaming giants? When folks who wanted all sorts of government program expansions declared that Nevada’s low gaming tax rate was subsidizing the construction of out-of-state casinos that would be subjected to much higher taxes?
Well, imagine where Nevada would be today if the global gaming corporations headquartered in Las Vegas hadn’t broadened their customer base. Gaming operations outside Nevada helped keep open the doors of Strip resorts during the darkest days of the Great Recession – and keep Las Vegans employed – when some properties couldn’t give hotel rooms away. If Nevada had taxed casinos to the point of limiting their growth or making expansion impossible, the state economy undoubtedly would be even worse than it is today.
The growth of any business in this state, even outside the state, is something to be celebrated, not condemned.
In that regard, it was good news Tuesday that Maryland voters passed Question 7, which authorized gaming expansion in that state. MGM Resorts International spent almost $41 million advocating passage of the question, and because the campaign was successful, the company now will enter the formal bidding process for a license that would lead to the construction of an $800 million resort at Prince George’s National Harbor complex.
Question 7 also reduces Maryland’s gaming tax rate and allows existing casinos to add table games, a change that has prompted Caesars Entertainment to expand its casino project in Baltimore.
Meanwhile, on Thursday, Wynn Resorts announced it would bid for a casino license in Philadelphia. The more these companies widen their reach, their bottom lines become less volatile and their Las Vegas operations become more stable.
Gaming companies are willing to pay higher tax rates in other jurisdictions because the number of licenses is capped. There’s less competition. Nevada has no cap on the number of casinos that can open here, hence its rate is much lower.
“Starting today, MGM’s talented team of designers and resort experts begin work on our proposal for a great destination resort for the people of Prince George’s County and the state of Maryland,” MGM Resorts Chairman Jim Murren said after Question 7 was approved.
Nevada no longer has a monopoly on gaming. But Nevada gaming companies are industry leaders because Nevada provided an environment in which they could prosper and grow. That’s a lesson that can be applied to all Nevada businesses in these tough times.