MGHA Posts Comments to Proposed IRS Regulations

These comments are posted by the Mississippi Gaming & Hospitality Association (MGHA), a non-profit association whose members consist, in part, of 28 casinos operating and doing business in the State of Mississippi. The 28 casinos doing business in Mississippi are operated by 17 different companies and of those 17 companies at least nine operate in multiple jurisdictions outside of Mississippi.

In 2014, Mississippi saw more than 22 million out of state visitors with a combined spend of nearly $6.1 billion. In terms of casino gaming operations, Mississippi casinos reported more than 20 million casino visits to its 28 commercial casinos generating approximately $2.1 billion in gross gaming revenues and $700 million in non-gaming revenues. While these statistics appears healthy, Mississippi has seen a precipitous decline in visitation and revenues since 2008. There are many factors contributing to the decline including the recession, the BP Oil Spill, and the expansion of gaming operations near and around its borders. With the decline in visitation and revenues, Mississippi experienced job loss and declining tax revenues especially in the northern region of the state.

The proposed regulations that would cause commercial casinos to report at a $600 threshold on slot machine winnings rather than the current $1,200 threshold will have a negative impact on the customer experience. We have seen that a positive customer experience is vital for the success of business, especially in the hospitality and gaming industry. Each year, the hospitality and gaming industry spends millions of dollars in customer service training because of the importance of providing a customer with a positive experience. Anything that infringes or undermines that experience has been proven to have a negative impact upon visitation and, in turn, on business operations. Reduced visitation and lower customer counts mean lost revenue, lost jobs and reduced tax revenues, which ultimately mean less funding for public services. This has been experienced in Mississippi due to the factors already mentioned above.

The $1,200 threshold has been in place since 1977 and is part of the existing customer experience. With a multitude of factors already impacting a customer?s decision regarding entertainment options, the proposed changes, if adopted, will have a negative impact on the customer’s experience and decision-making process. As such, there is little doubt it will negatively impact the business operations of commercial casinos around the country, including those in Mississippi. On behalf of the 17 companies operating 28 casinos in the State of Mississippi, we would urge you to reject the changes and leave the tax reporting threshold requirements as they have been since 1977.

Respectfully submitted this the 2nd day of June, 2015.

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