Governor Terry Branstad wants to raise taxes for casinos from 22% of its revenue to 36%. And Argosy Casino officials say his proposal would kill jobs in Sioux City.
The state of Iowa is home to 18 casinos, which employ over 9,000 people. And all of the casinos pay at least 22% in taxes.
Argosy Casino in Sioux City pays 6% more than that, with the extra tax money
Governor Branstad is proposing raising the state casino tax to 36%, and he says, it's not that unheard of across the country. "What we're talking about in terms of the gaming tax in Iowa, it still won't be anywhere near what it is in Illinois or Indiana or Ohio and I think Maryland is the highest," says Governor Branstad.
The big difference though is that those states work on a sliding scale. The more revenue a casino brings in - the higher the tax. Most stay down around 20%. Another difference: volume.
General Manager of Argosy Casino Kees Eder says, "The advantage that they have is that they're sitting right outside Washington D.C. and Baltimore and have millions of people in the population so the volumes there make up for a lot."
If the tax hike goes through as planned, the Argosy Casino is set to lose about $8.4 million a year. And of course, jobs will be the first to go. "Labor is the highest cost factor in running a casino so there would be job losses involved," says Eder.
And the area with the lowest revenue and the highest number of employees: table games. Currently, there are 50 table game dealers at Argosy, making them a target for cuts.
Branstad believes the casino business has flourished in the state and with its 18 existing casinos, he doesn't see any more possible growth in the industry.
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