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4/7/2011

Impact on Iowa of the Proposed Wagering Tax Increase

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Iowa Governor Terry Branstad has proposed increasing the wagering tax by 63% in an effort to raise $195 million.  This tax increase would have a devastating impact on the state’s gaming industry and a counterproductive effect for Iowa and Iowans.


For 20 years, Iowa’s commercial casinos have invested in their facilities and communities.  For over three years, Iowa’s 17 casinos have had an annual economic impact to the state of around $1 billion.


Each casino property has worked to become an entertainment destination in Iowa.  The properties have paid for most infrastructure and enhancements with few incentives or tax breaks.  In fact, The Des Moines Register reported that, “The number of customers that visited the 17 state regulated casinos last year was three times the size of the combined home attendance for Chicago’s Cubs, White Sox, Bears, Bulls and Blackhawks.” And, about half of the customers were from surrounding states.


Many of Iowa’s casino are an employer of choice and appreciated in their communities.  Casinos contributed millions of dollars each year to local and state charities.  In addition, citizens have responded to the casinos impact by passing mandated county referendums by an overwhelming average of 78.5%.


Should the proposed tax rate pass, the adverse impact on the state’s economy would be drastic, including loss of jobs, reduction of amenities, decreased local spending, eliminating non-mandated contributions, and, potentially, property closures.


Harvey Seigelman, a leading Economist that served 16 years under Iowa Governor Terry Branstad, prepared a report for the IGA that summarizes in more detail the impact this proposed tax increase would have on Iowa’s gaming industry, the State and its citizens.


Click here to view the report, “Impact on the State [Iowa] of Proposed increase in the Wagering Tax to 36%.”


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