[1/6/03]Making Mississippi casinos pay steeper taxes would raise more than $100 million for state and local governments, but casino officials said it would have a “detrimental” effect on their industry.

State Rep. Robert G. Clark, D-Lexington, has introduced a bill that, if passed, could mean a 4 percent more of casinos’ gross revenues would go into the state treasury.

The Mississippi Gaming Association will oppose the bill, citing a study saying such an increase would force casinos in Mississippi to close, executive director Andy Bourland said.

“The increase would have a detrimental effect on the industry and, we believe, the state,” Bourland said.

Curt Follmer, senior vice president and general manager for Rainbow Hotel Casino in Vicksburg, said the fee would be catastrophic to the industry.

“They’re looking for a cash cow to a bad situation and it’s not going to work,” he said.

Mississippi first licensed casinos in August 1992. For the last fiscal year, the industry paid $327 million in taxes, but for the past two years the state has been tapping reserves to balance its budget and the forecast is no better for next year.

“This is a way of looking for additional revenues to continue to offer first-class service to the people of the state of Mississippi,” Clark said. “You have to look for money wherever the money is.”

Rep. Chester Masterson, R-Vicksburg, said Clark’s idea isn’t a good one.

“The state’s in pretty bad shape, but I don’t think that’s the way to go,” Masterson said.

Clark said he understands this is a sensitive issue and that the bill will not pass without a fight.

“This is my duty, my calling and my responsibility to do the tough things that need to be done,” he said.

Bourland said Mississippi “did three things right,” when bringing casinos to the state 11 years ago.

“There was a firm, strict regulatory climate, a reasonably pro-business environment and a reasonably fair taxation rate,” Bourland said.

The casino industry in Mississippi operates on very tight margins, Bourland said, and to skew that balance would be devastating.

Clark said he is “not concrete” on the additional 4 percent. “It could be 3 percent or even 2 percent,” he said.

Still, Bourland said, the association would oppose the bill.

“The gaming industry contributes its fair share,” he said.

Mississippi ranks third among the nation’s largest gaming industries, behind Nevada and New Jersey.

According to a study in 2002 by the University of Southern Mississippi, an increase in the revenue fee would cause six to nine casinos to fail and 5,000 casino employees to lose their jobs.

There are 29 state-licensed casinos all along the Mississippi River and Gulf Coast. Silver Star and Golden Moon, near Philadelphia, are operated by the Mississippi Band of Choctaw Indians and are not regulated or taxed by the state.