Louisiana Parish Might Tax Comp Casino Hotel Rooms Given to Gamblers

Officials in East Baton Rouge Parish, LA, are open to the idea of taxing complementary rooms that are given to gamblers at L’Auberge Baton Rouge as well as the Belle of Baton Rouge. The Metro Council, along with the local tax attorneys Alejandro R. Perkins and Drew M. Talbot, are expected to vote on a contingency contract today.

The Department of Finance and the Office of the Parish Attorney Want New Tax

East Baton Rouge Parish’s Metro Council will meet with the two attorneys today to discuss the contract, which could be worth as much as $50,000. The attorneys would be reportedly called up to represent the city-parish any time there is a tax revenue collection issue involving casinos.

The revenue manager for the city-parish, Tiffani Delapasse, stated that this item is the product of a previous case settled this year in which a Louisiana Supreme Court ruled that Harrah’s Casino in New Orleans owed taxes to the state on comped rooms. The parent company of Harrah’s Casino is Caesars Entertainment, which recently unveiled its most dynamic betting app.

Caesars Reportedly Owes Millions in Taxes

With the ruling, Caesars owes the state $43 million, but was shown some leniency as the Legislature passed a bill that settled the case and determined the payments. According to the Legislature, Caesars will have to pay $39 million now, then complete $1.3 million in annual payments for the following 32 years. The latter payments are part of a restructuring of the operator’s current agreement that has the company paying state sales, use and occupancy taxes that total around $1.6 million a year. That money is given to two state entities, the Louisiana Stadium and Exhibition District and the Ernest N. Morial New Orleans Convention Center.

The state is apparently moving to cut a deal with Harrah’s just months after the Louisiana Supreme Court ruled in the state’s favor. Federal filings show that Harrah’s owes the state about $43 million in taxes not paid while contesting the law.

Wade Duty Is Against Taxes on Comped Rooms

Delapasse added that there’s litigation potential and that all of this is still highly contested. The executive director of the Casino Association of Louisiana, Wade Duty, said that the ruling against Harrah’s is not applicable to hotels that are connected to riverboats as it was only enforceable to brick-and-mortar casinos.

According to Duty, taxing gamblers on comped rooms because they wager at a hotel that has a casino is the equivalent to taxing customers that keep booking rooms at Marriott or Hilton because they show loyalty towards the brand.

He says the ruling is “a door opening into a room that has no boundaries.” According to Duty, if the city-parish has the power to collect comped room taxes, that could lead to taxes on pretty much every product or service provided at a certain casino hotel because both services and products can be labeled as a part of a customer loyalty program.

Due to the fact that there is a massive grey area in which the guests can be taxed on countless things, this is an unwanted scenario.