Companion Bill in Nevada Outlines Fees

18 April 2001
While the Nevada state assembly has been working on its Internet gambling legislation, equally important work has been done on a related bill, AB 578, that would lay out the interactive gaming licensing and fee structure, along with taxation rates.

Under the proposed amendments to AB 578, an application fee of $100,000 would be assessed up front. Potential license holders would still have to pay for any investigation into their suitability as an interactive gaming operator. Once the two-year license is awarded, a $1 million licensing fee would be assessed. In addition, there would be a 6.25 percent tax on gross revenues earned from interactive gaming services.

Other fees have also been proposed, including a $250,000 licensing fee assessed for companies that manufacture interactive gaming devices as well as a $50,000 fee for each casino that contracts the manufacturer. The manufacturers would also face a sliding taxation rate ranging from a 6.25 percent tax on monthly gross revenues up to $500,000; a 9.5 percent tax on monthly gross revenues between $500,000 and $1 million; and a 12.75 percent tax on monthly gross revenues exceeding $1 million.

"The Judiciary Committee placed the dollar fees in AB 578 and the questions relative to the behavior of a manufacture in this bill to clearly mark the line between what the gaming industry wanted in AB 296 and what the Committee was looking for in terms of fees," explained Assemblyman Bernie Anderson, who heads up the Judiciary Committee

The suggested fees and taxation levels left a few of those present at an April 16 committee hearing astonished. Judiciary Committee member Dennis Nolan called the proposed fees an attempt to kill the "goose before we get our hands around it." A representative from the Association of Gaming Equipment Manufacturers lamented, "We've been taken to the woodshed."

Despite these comments and similar thoughts expressed by other attendees, the bill and its amendments were passed. Like AB 296, the next stop is a floor vote later this week.

Click here to read a copy of AB 578. The amendments outlining the fees were not yet available for publishing.