riverboat casino; gaming tax; casino
Gaming and Casino Operations Management | Gaming Law
Original Research Article
The purpose of this research is to investigate a potential consequence related to the 2003 Illinois Gaming Tax rate restructuring. Specifically, did the assessment of a higher gaming tax rate in the state of Illinois negatively impact promotional spending by an Illinois riverboat operator in an attempt to limit revenues and avoid incurring a higher tax rate? Data were contributed by a major Illinois riverboat operator and the researchers utilized an Autoregressive Integrated Moving Average (ARIMA) method for analysis of the data. The findings demonstrate that this particular operator reduced promotional spending when confronted with increases in gaming tax rates. These results suggest that legislators have a cause for concern when considering increases in a state’s gaming tax rate. This study confirms that operators may reduce their effort to attract gaming volume in response to gaming tax increases, and opens the door to questioning whether their business volume is diverted elsewhere to generate gaming revenues and the resulting gaming tax receipts.