Three tribal casinos are in a battle with New Mexico and its gambling regulators after the state informed the casinos they owe $40 million in additional revenue. The three casinos strongly disagree with this and are claiming that the state is misinterpreting an old agreement. The issue has gotten so serious that the three casinos have taken their case to court.
Casinos Seek Help From Courts
The casinos in question are the Tesuque, Sandia, and Isleta Peublos. They have requested that the court stops New Mexico from collecting money that the casinos do not owe, claiming that it is an illegal tax on the casinos and an attempt by the state to make a quick buck.
As you’d expect, the state of New Mexico believes otherwise, saying that it is simply trying to make sure that businesses pay what they owe to the state. In total, there are 28 casinos in New Mexico, along with five race tracks. It remains to be seen if the state will be going after the other gambling facilities and if they will join the lawsuit.
New Mexico Wants Tax From Free Credits
The entire issue seems to be centred around free casino credits, which are used to draw players to the casino in the hopes of them spending more money. As it stands, if a player spends $20 at a slot machine and walks away with $2, then the casino has to pay a share of the $18 to the state. However, if the player uses $20 of free credits and spends all of them, the casino doesn’t pay anything to New Mexico.
When the agreement between the casinos and the state was signed in 2015, free credits were not mentioned at all. Earlier this year though, New Mexico began sending out letters saying casinos must pay for the free spins as well. Current estimates suggest that New Mexico is looking for $3.2 million from Tesque, $26.5 million from Sandia, and $10.3 million from Isleta Peublo. No other casinos have yet been mentioned.
We’re definitely on the side of the casinos here, why should they have to pay revenue when customers use free credits? The casinos are not making any money off of those, and if they player does then start spending real money, then the state will get its share.