As Mississippi's economy continues to recover from the recent recession,
any increase in the gross gaming tax that casinos pay on revenue
would likely be counterproductive, says a University of Southern
Mississippi researcher who recently completed her third study of
the state's gaming industry.
The study --
"Gaming Taxes and Their Impacts on Mississippi -- released
March 1 by Dr. Denise von Herrmann, associate professor of political
science, shows that attempts to generate new revenues by raising
these taxes would likely result in the closure of up to six casino
Dr. von Herrmann
says that her study's projections indicate that casino closures
would result in the direct loss of about 4,600 casino jobs. In turn,
this would cause indirect job losses in other industries as casino
employees are laid off and closed casino firms cease to purchase
goods and services.
show that a three percentage point increase might initially net
the state somewhere between $4 and $68 million. But much would be
offset by losses in income tax revenues, sales taxes and related
revenues. Any increase in the taxes that casinos pay could ultimately
mean that the state gains very little by doing this," said
currently collects a 12 percent tax on gross gaming revenues. The
state's lawmakers have considered raising the tax, as have some
other states with casino gaming.
The 2004 study
was commissioned by the Mississippi Gulf Coast Economic Development
Council (MGCEDC) and is an expansion and update of von Herrmann's
previous studies in 2000 and 2002. The current study used both primary
and secondary research, making extensive use of the original data
collected for previous studies and was conducted between November
2003 and March 2004. Researchers from the Center for Tourism and
Economic Development (CENTED), based in the university's College
of Business and Economic Development, also assisted.
the study is very timely in light of what other jurisdictions will
be looking at doing. We want legislators to have current research
and information. If the Legislature is going to be making decisions,
we want them to have all the facts available," said Chevis
Swetman, president of the MGCEDC.
Among the study's
patron surveys reveal a mature, stable gaming market in which the
vast majority of patron visits to casinos are planned. "The
gaming market is definitely mature in Mississippi. It's not growing
rapidly any more," said von Herrmann.
42.8 percent of gaming taxes paid in the state comes from Mississippi
residents. Approximately $96 million of the direct gaming tax is
paid by Mississippi residents who patronize casinos, while the remaining
$224 million or so is paid by nonresidents. Dr. von Herrmann said
this may mean that the same number of people are going more frequently
or more Mississippi residents are patronizing casinos.
88 percent of Mississippi casino employees are state residents.
"What's somewhat surprising, and now we have evidence that,
more than 40 percent of those surveyed said they came to Mississippi
to work in the casino industry," said von Herrmann. Collectively,
casino employees in the state paid some $42 million in direct income
taxes. Data was collected from 258 employees at nine casino properties
on the Gulf Coast and in Tunica County.
casinos look healthier and slightly more profitable than two years
ago at the time of the previous study. "That is surprising
in some ways because of the state of the economy during that time,"
said von Herrmann. "Previous studies showed that Las Vegas
casinos came out of the last Nevada recession faster than other
businesses. Our study showed that the same thing happened this time
value of this type of study is that the industry is changing over
time. "We can't assume that what we found will be the same
in the future," said von Herrmann.