Schools May Be Missing Out On Casino Revenue
When Ohio voters gave the "okay" for casinos to hit the state more than five years ago, there was a catch. Operators would have to pay a 33 percent tax on their revenue, calculated by subtracting "promotional credits" and payouts from their overall earnings. A chunk of that money then would be funneled to local governments and schools. One state senator thinks the current equation means districts are losing big.
Promotional credits are things like “10 free gaming dollars” or other methods aimed at bringing in customers. And right now, there’s no limit to how much casinos and racinos can say they gave in promotional credits.
That’s all money that could have been taxed to bring in revenue for schools and local governments, says State Sen. Bill Coley. He says over the past three years, the lost tax revenue amounts to roughly $165 million.
In his recently introduced Senate bill, the Republican from southern Ohio is capping calling for casino operators to limit their promotional credits at $5 million in his recently introduced Senate bill.
Coley says the extra revenue means districts could potentially see a big payday.
“You know, when you look at Cleveland Public Schools, or you look at a public school system in our large metro areas, it’s hundreds of thousands of dollars, and that’s money they can utilize to provide education for students in the classroom,” Coley said.
But Penn National Gaming, which runs casinos in Toledo and Columbus, said promotional credits are not unlike pizza coupons. “Taxes are calculated on the price you paid, not the original price of the item,” officials argued in an earlier written statement, adding that promotional credits help keep Ohio’s casinos competitive against neighboring states.
Coley’s bill currently sits in the senate finance committee.