NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates SB396

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

Gaming Control Board (GCB)

SUMMARY

Synopsis of Bill

This bill reduces the gaming machine tax on net win for veteran and fraternal organizations from the current 25 percent to 15 percent.

Significant Issues

Note these organizations are currently allowed to have up to 15 machines per club.

FISCAL IMPLICATIONS

Veteran and fraternal organizations have shown a delay in operating their gaming machines for a variety of reasons, and there is uncertainty as to the extent of the number and timing of these clubs coming on-line. Recurring General Fund revenue loss could be as high $2,900.0 in FY01 and $3,200.0 for a full year, based on assuming 80 clubs with 1,200 machines operating at the end of FY01. This assumes that all clubs would have the maximum of 15 machines.

GCB believes that clubs may, on average, have approximately only 7 machines per club, which would lead to a lower General Fund revenue impact. However, this type of incentive may encourage the clubs to install the full allocation.

TECHNICAL ISSUES

An effective date of July 1, 2000 would make this bill easier to administer. The percent of distribution for charitable or educational purposes may need to be adjusted.

AW/njw