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CARSON CITY – In a rare legislative battle between those in the gaming industry, an Assembly committee was told Thursday that a tax plan to build a sports and entertainment arena behind the Harrah’s Las Vegas hotel on the Strip included bad tax policy.
Russell Rowe, representing a number of big gaming companies, testified the plan to impose a 9/10-cent tax increase in the casino corridor created an unequal system.
Harrah’s, owned by Caesars Entertainment, gathered 220,000 signatures on an initiative petition to put the issue on the election ballot next year to levy a tax in a three-mile area of the Strip to pay for the arena.
Opponents are supporting a bill in the Legislature to put a competing measure on the ballot indicating that the sales and use tax must be uniform throughout the county. The bill, Senate Bill 495, is before the Assembly Taxation Committee, which will vote on it next week.
The bill would prohibit a special district from being created that would impose a higher sales and use tax in one section of the county.
Caesars Entertainment has proposed building a $500 million, 27,000-seat arena.
John Sande III, an attorney for Caesars Entertainment, said he has been lobbying the Legislature for 30 years and this is the first time he remembers seeing major casino companies battling each other. He argued the bill was aimed at confusing voters and to “thwart” the Harrah’s project.
Sande said the proposed arena would produce about $20 million in tax revenue annually and could result in an NBA or NHL team coming to Las Vegas.
But Rowe, representing companies such as MGM Resorts International, Station Casinos and Las Vegas Sands, said the arena project would benefit only a small segment. Tax policy, he argued, should not be used to give a competitive advantage to one group.
District Judge Todd Russell of Carson City ruled earlier this week that Caesars Entertainment had sufficient signatures to put the issue before the voters.
Danny Thompson, who traditionally represents the AFL-CIO, said he was addressing the committee as director of a charitable corporation to which Harrah’s donated the land for the arena, worth $151 million.
Thompson said the bill “puts the Legislature in the middle of a hefty fight.”
Rowe, in answer to a question by Committee Chairwoman Marilyn Kirkpatrick, D-North Las Vegas, said Senate Bill 495 would not affect the power of the Legislature to give tax abatements.
Assemblywoman Dina Neal, D-North Las Vegas, told attorneys for Caesars Entertainment that those who signed the initiative petition in her district were “not sure who was on the hook” to pay for this arena.
Neal questioned how the project would be a public benefit, saying it would only help a small minority.
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