Gaming Commission in Nevada hesitates over compensating slot operator for excessive $3.1 million tax payment with interest.
The Nevada Gaming Commission is considering paying $222,744 in interest on a $3.1 million tax overpayment made by Dotty's over a nearly three-year period. The overpayments occurred from August 2021 through March 2024, based on $46.9 million in gaming revenue.
The Commission, which handles tax overpayments by commercial casinos, typically issues refunds that include interest payments and reimbursements for investigative costs related to identifying the overpayments. In recent cases with Dotty's slot parlors, the Commission approved claims totaling millions of dollars in gaming tax refunds along with interest payments.
The system that caused the overpayment has been making correct calculations since April. However, Smith, Dotty's general counsel, stated that the casino's management system wasn't state-approved and couldn't identify overpayments during the period in question.
Regarding negotiation or settlement possibilities, while the search results do not explicitly mention a formal negotiation or settlement process, the Commission's approval of interest payments and reimbursements suggests a structured administrative review process that allows adjustment of amounts owed. This implies casinos may be able to work with the Commission to resolve disputes over tax liabilities, potentially including negotiations over interest or related costs.
Commission Chair Jennifer Togliatti called the financial burden on the state the "best investment ever" at the current interest rate. However, commissioners echoed similar sentiments, expressing dissatisfaction with paying interest for Dotty's tax overpayment. Commissioner Brian Krolicki questioned why Dotty's should receive interest on the overpayment, criticizing the operator for its lack of attention in handling the tax overpayment.
Smith mentioned he couldn't make concessions on the interest payment without discussing it with his client, but was open to such discussions. Senior Deputy Attorney General John Michela mentioned that state statute dictates the payment of interest, even when an operator is at fault. After approval, Dotty's went back through the overpayment amount with state officials. Dotty's did not provide a specific reason for the large degree of the overpayment in the provided paragraph.
The Nevada Gaming Control Board directed the payment of the principal and interest to be put before the Commission. Commissioner Krolicki lamented the large amount of tax, audit, and license division staff time devoted to the issue. Smith explained that state regulations exclude cash promotions from gross gaming revenue, which might have contributed to the overpayment.
In conclusion, the Nevada Gaming Commission is considering paying interest on a large tax overpayment made by Dotty's. While the Commission may have a structured administrative review process that allows adjustment of amounts owed, formal settlement procedures are not detailed in the available sources. Further precise procedure details would likely be found in the Commission’s policies or regulations governing tax disputes.
Casino operators, such as Dotty's, might benefit from the casino-culture in Las Vegas, where commercial casinos like theirs, even when at fault, are expected to pay interest on tax overpayments as per state statutes. This pays off in the long term, as shown by Commission Chair Jennifer Togliatti's comment, "the best investment ever" at the current interest rate. However, the casino-culture also requires diligence in handling tax liabilities, as Commissioner Brian Krolicki questioned Dotty's for not properly managing their tax overpayment, which could lead to casino-games losing value through penalties. The Nevada Gaming Commission, handling such situations, typically reviews and adjusts amounts owed in the casino-and-gambling industry, offering opportunities for negotiations over interest or related costs.
