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Burlington casino pays $20,000 state penalty after tax reporting error

Racing and Gaming administrator Brian Ohorilko says the problem involved how free plays given to casino customers are taxed after the state law was changed two years ago. “It exempted certain types of promotional play from state tax after a certain number of promotional play has been issued throughout the entire state of Iowa,” Ohorilko says. He says Catfish Bend was giving customers free plays after they paid a certain amount of cash and then they counted those free plays against the statewide tax limit. “They were including that in the overall formula — it should not have been included in that formula — and so what it did was, it cause that threshold where taxes did not need to be paid for promotional pay to be hit a few weeks earlier than it should have,” according to Ohorilko. Ohorilko says they had to collect gambling taxes from casinos to make up for the mistake. “It was approximately $250,000 in state gaming taxes that was collected over the course of two years,” Ohorilko says. Ohorilko says the taxing of free play in casinos is done by some states and some states do not tax it. Other states tax are like Iowa and only tax a portion of the free play. Ohorilko says free plays are legal and are one of the incentives the casinos use. “Free play is very common throughout the industry. It’s issued to slot players, typically based on their play.

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