Deduction cap may play role in casino debate

When it comes to the ongoing debate over renegotiation of state-tribal gaming compacts, there’s an elephant in the living room everyone pretends to ignore for now, but that may soon play a big role in negotiations.

In 2018, lawmakers voted to cap income-tax deductions at $17,000 per return. That’s a problem for Oklahoma casino operators—several of whom supported the 2018 tax hikes—because it hits many of their customers. It turns out a lot of people lose a lot of money in Oklahoma casinos. This fact was highlighted recently when the senior counsel of the Chickasaw Nation said California is the only state where more money is spent on gambling than Oklahoma, and on a per-person basis California gets just $90 per citizen versus $407 in Oklahoma.

The huge per-person gap is a reflection of the size of the losses experienced by gamblers in Oklahoma.

Oklahoma’s casino interests are promoting a bill to exempt gambling losses from the deduction cap even as they resist Gov. Kevin Stitt’s call to renegotiate gaming compacts.

Stitt has the stronger case on the merits. But he may also have more leverage thanks to the casinos’ desire for a gambler tax break, which would act as an indirect taxpayer subsidy of their operations.

 

 

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