MassLive – At least two of the companies looking to win one of Massachusetts’ first casino licenses say the state needs to change how it taxes winnings to avoid discouraging people from playing and cutting into the take for the state and the casinos.
Las Vegas-based MGM and Wynn want the state to repeal a provision requiring gambling facilities to report and withhold 5 percent for state income tax on certain winnings over $600. They say casinos in surrounding states all use lower, federal standards for income tax withholding, making them more appealing to regular players, casual day trippers and tourists.
Some Massachusetts gamblers — particularly horse and dog racing betters that have had their winnings subject to the state’s withholding provisions for about a year already — agree it should be addressed.
“You’ve got to make it right not just for the companies, but also for the customers,” said Ed Lynch, a Quincy resident who was at Suffolk Downs, an East Boston horse racing track Friday. “If you don’t, they’ll catch on.”
MGM and Wynn say the provision is “wholly impractical” and a “massive administrative burden.” Wynn suggests the requirement could severely hinder game play, forcing a stoppage anytime a person won more than $600 on a hand so that they could complete a tax form.
“It’s functionally impossible to interrupt play after each hand to administer reporting or withholding,” the casino said in a letter to state gambling regulators.
Whether the law is interpreted that way in Massachusetts is unclear. The state Department of Revenue says discussions with gambling regulators and industry officials are ongoing. “We anticipate that Massachusetts will follow the practice used in other states,” said Maryann Merigan, the department’s spokeswoman.
