Nevada Gaming Tax Increase on Monthly Revenue above $250,000 Initiative (2022)

Nevada Gaming Tax Increase on Monthly Revenue above $250,000 Initiative
Election date November 8, 2022
Topic Taxes and Gambling
Status Not on the ballot
Type State statute	Origin Citizens

The Nevada Gaming Tax Increase on Monthly Revenue above $250,000 Initiative (S-01-2020) did not appear on the ballot in Nevada as an indirect initiated state statute on November 8, 2022.

A "yes" vote would have supported increasing the rate of the tax on monthly gross gaming revenue above $250,000 to 9.75% for nonrestricted gaming licensees.

A "no" vote would have opposed increasing the rate of the tax on monthly gross gaming revenue above $250,000 to 9.75% for nonrestricted gaming licensees, thereby maintaining the existing tax tiers: 3.5% on gross revenue of the licensee which does not exceed $50,000 per month, 4.5% on gross revenue of the licensee which exceeds $50,000 but does not exceed $134,000 per month, and 6.75% on gross revenue of the licensee which exceeds $134,000.

During the 2021 legislative session, the state legislature passed a law to allow sponsors to request the removal of initiatives from a ballot after certification. The Clark County Education Association, which sponsored this initiative and an increased sales tax initiative, requested to withdraw the initiatives after a legislative compromise was reached. In October 2021, Secretary of State Barbara Cegavske (R) announced that the initiative could not be removed from the ballot after certification and upon the sponsor's request because the new law did not supersede her constitutional mandate to place the initiatives on the ballot after they had qualified. On March 9, 2022, District Court Judge James Wilson ordered Cegavske to withdraw the initiatives and not put them on the 2022 ballot. Click here to read more.

Measure design

See also: Text of measure

This measure would have increased the rate of the tax on monthly gross gaming revenue above $250,000 to 9.75% for nonrestricted gaming licensees. Currently, the Nevada Gaming Commission collects a tax on monthly gross revenue from nonrestricted licensed gaming facilities. The tax is imposed according to the following tiers:

• 3.5% on gross revenue of the licensee which does not exceed $50,000 per month,
• 4.5% on gross revenue of the licensee which exceeds $50,000 but does not exceed $134,000 per month, and
• 6.75% on gross revenue of the licensee which exceeds $134,000.

This measure would have added another tier for the gross revenue of the licensee which exceeds $250,000 at a rate of 9.75%.

A nonrestricted gaming license is a "state gaming license for, or an operation consisting of, 16 or more slot machines or a license for or operation of any number of slot machines together with any other game, gaming device, racebook or sports pool at one establishment."

In 2019, the gross gaming tax generated $783.5 million in revenue for Nevada. The Nevada Gaming Control Board estimated that if the additional tax had been in effect in 2019 it would have generated an additional $317.6 million.

Currently, a portion of revenue from the nonrestricted license gaming tax is generated by gambling on off-track pari-mutuel wagering, which is placing bets on other gamblers' odds. State law requires that a portion of the gaming license tax revenue be allocated proportionally to counties with populations smaller than 100,000 and where off-track pari-mutuel wagering occurs according to the following rates:

• 0.04% of the revenue generated from the license fee for gaming revenue in excess of $134,000
• 10% of the license fee generated from these wagers in excess of $5,036,938 per calendar year

The tax would have taken effect on November 22, 2022, if approved by voters at the 2022 general election.

Text of measure

Description of effect

The description of effect for the initiative petition was as follows:

“

The Nevada Gaming Commission collects a monthly fee based on the licensee's monthly gross gaming revenue. Currently, for nonrestricted licensees, the maximum percentage collected is 6 ¾ percent of any monthly gross gaming revenue over $134,000. This initiative would increase that percentage to 9 ¾ percent for any monthly gross gaming revenue over $250,000. The fee increase proposed by this initiative would not affect gaming licensees whose monthly gross gaming revenue is less than $250,000. The initiative would not affect restricted licensees, i.e. those consisting of 15 or fewer slot machines. The initiative will increase the potential bond amount the Commission can require for Ii censure under NRS 463 .225 (2). The initiative may increase the amount of money that goes to augment stakes of pari-mutuel horse racing in counties with populations of under 100,000 under NRS 463.320(l)(c)-(d). The remaining revenue would be credited to the State General Fund. The initiative will go into effect on July 1, 2021 if enacted by the Legislature and approved by the Governor, or on November 22, 2022 if approved by voters in the 2022 general election.

”

Full text

The full text of the initiative can be read below:

Support

Nevadans for Fair Gaming Taxes led the campaign in support of the measure.

Supporters

Unions

• Clark County Education Association

Arguments

• John Vellardita, executive director of the Clark County Education Association: "We think that gaming can contribute more to the state revenues. It has the lowest tax in the country and even with this increase it still would be below the national average. We don’t think it will hurt the industry. We think the public supports it."

Opposition

Opponents

Officials

• Assembly Speaker Jason Frierson (D)

Unions

• Nevada Resort Association

Organizations

• Las Vegas Metro Chamber of Commerce

Arguments

• Assembly Speaker Jason Frierson (D): "I don't believe that those measures are the best way to go forward. ... I think you're talking about sales tax in a state that already has one of the highest sales tax (rates) in the country, and you're talking about room tax when our rooms are empty."
• Nevada Resort Association: "As Nevada’s largest industry and economic engine continues to do all it can to recover and bring employees back to work, now is not the time to target the resort industry with a 44 percent tax increase that would further damage Nevada’s recovery efforts, create permanent job losses and further jeopardize capital investment and future economic development."

Campaign finance

The campaign finance information on this page reflects the most recent scheduled reports that Ballotpedia has processed, which covered through June 30, 2022. The deadline for the next scheduled reports was October 15, 2022.

See also: Campaign finance requirements for Nevada ballot measures

There is one ballot measure committee, Nevadans for Fair Gaming Taxes , registered in support of the initiative. The committee has reported over $1 million in cash and in-kind contributions.

	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
Support	$1,020,000.00	$66,096.21	$1,086,096.21	$1,000,000.00	$1,066,096.21
Oppose	$0.00	$0.00	$0.00	$0.00	$0.00
Total	$1,020,000.00	$66,096.21	$1,086,096.21	$1,000,000.00	$1,066,096.21

Support

The following table includes contribution and expenditure totals for the committee in support of the ballot measure.

Committees in support of Nevada Gaming Tax Increase on Monthly Revenue above $250,000 Initiative (2022)
Committee	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
Nevadans for Fair Gaming Taxes	$1,020,000.00	$66,096.21	$1,086,096.21	$1,000,000.00	$1,066,096.21
Total	$1,020,000.00	$66,096.21	$1,086,096.21	$1,000,000.00	$1,066,096.21

Donors

The following table shows the top donor to the committee registered in support of the ballot measure.

Donor	Cash Contributions	In-Kind Contributions	Total Contributions
Clark County Education Association	$1,020,000.00	$66,096.21	$1,086,096.21

Opposition

If you are aware of any committees registered in opposition to the ballot measure, please send an email with a link to editor@ballotpedia.org.

Methodology

To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.

Background

Gambling in Nevada

As of January 2020, there were 219 commercial casinos and four tribal casinos in Nevada. In 2019, gross gaming revenue for all 223 casinos in Nevada totaled $11.7 billion. The Nevada Gaming Commission established in 1959 by the passage of the Gaming Control Act is responsible for licensing and regulating gaming operations. The Commission consists of five members appointed by the governor to serve four-year terms.

Currently, the Nevada Gaming Commission collects a graduated tax on monthly gross revenue from licensed gaming facilities. Tax revenue is deposited into the state's general fund. The tax is imposed according to the following rates:

Gross gaming revenue tax rates
Gross gaming revenue	Graduated tax rate
$0 – $50,000	3.5%
$50,000 – $134,000	4.5%
Over $134,000	6.75%

The following chart lists the total taxable gross revenue and gross gaming tax revenue generated between 2015 and 2019 in Nevada:

Annual gross gaming revenue and tax
Year	Total taxable gross revenue	Gross gaming tax revenue
2019	$11.7 billion	$783.5 million
2018	$11.3 billion	$752.5 million
2017	$11.1 billion	$742.9 million
2016	$10.8 billion	$723.9 million
2015	$10.6 billion	$704.5 million

Status of gambling across the U.S.

As of September 2020, gambling in some form was legal in 48 of the 50 states, with complete bans in Utah and Hawaii. In 2019, total gross commercial gambling revenue across the 989 commercial and tribal casinos was $77.3 billion, and $40.8 billion was paid in gaming taxes at the state and local levels. Twenty-five states have legalized commercial gaming, and 30 states have authorized tribal casinos.

Path to the ballot

See also: Laws governing the initiative process in Nevada

In Nevada, the number of signatures required to qualify an indirect initiated state statute for the ballot is equal to 10 percent of the total votes cast in the most recent general election. Moreover, signature gathering must be distributed equally among each of the state's four congressional districts. The initial filing of an initiated state statute cannot be made before January 1 of the year preceding the next regular legislative session. Signature petitions must be filed with county officials by the second Tuesday in November of an even-numbered year—two years prior to the targeted election date. The final submission of signatures to the secretary of state must be made at least 30 days prior to the start of the next regular legislative session.

The requirements to get an initiated state statute certified for the 2022 ballot:

• Signatures: 97,598 valid signatures were required.
• Deadline: The deadline to submit signatures to county clerks was November 18, 2020.

Signatures are verified by county clerks using a random sampling method if more than 500 signatures were submitted in that county. If enough signatures are submitted and verified, the initiative goes before the legislature. If the legislature approves and the governor signs the measure, there is no election. Otherwise, the initiative goes on the next general election ballot.

Stages of this initiative

• Robert Hollowood filed this initiative with the Nevada Secretary of State on January 13, 2020.
• In February, the Nevada Resort Association challenged the petition language submitted by initiative petitioners in a lawsuit.
• On March 13, Judge James Wilson ruled in favor of the Nevada Resort Association requiring initiative petitioners to resubmit the petition language.
• Sponsors submitted amended petition language on March 30, 2020.
• Proponents reported submitting over 200,000 signatures to county election officials on November 17, 2020.
• On December 15, 2020, county officials verified 148,605 of the 201,935 submitted signatures for the petition, about a 73.6% validity rate. The initiative was considered during the 2021 legislative session, which was set to begin February 1, 2021, and adjourn July 31, 2021.
• The measure was certified for the ballot after the Nevada State Legislature did not choose to vote on the indirect initiative prior to the March 12, 2021 deadline.
• On June 28, 2022, the Nevada Supreme Court ruled to remove the initiative from the ballot.

Attempt to remove the initiative from the ballot

On May 31, 2021, the final day of the 2021 Nevada legislative session, the state legislature passed a bill to increase the mining tax and dedicate revenue to education striking a compromise between legislators, the mining industry, and the largest teachers' union in the state—Clark County Education Association. Assembly Bill 495 (AB 495) reached the two-thirds (66.67%) vote requirement needed to pass the tax with a 28-14 vote in the Nevada State Assembly and a 16-5 vote in the Nevada State Senate. AB 495 maintains the state's net proceeds on minerals tax structure and dedicates the revenue to a new fund for education. In 2019, the net proceeds tax generated $61 million in revenue. Clark County Education Association Executive Director John Vellardita said, "This is the first time that dedicated revenue goes directly into K-12."

Clark County Education Association led two initiative campaigns to increase the state's sales tax and gaming tax to generate revenue for public schools. The initiatives qualified for the ballot on March 12, 2021, when the deadline for the state legislature to pass the initiatives passed without any action by the legislature.

On May 31, the state legislature also amended and passed a bill related to election laws, Assembly Bill 321 (AB 321), to allow initiative campaigns to remove ballot measures from the ballot 90 days before the election at which voters would have decided on the petition.

On July 28, 2021, Nevada Attorney General Aaron Ford (D) issued an opinion in response to a request by Governor Steve Sisolak (D) regarding the constitutionality of AB 321. Ford determined that the law was constitutional and that initiatives may be withdrawn prior to the election.

In October 2021, Secretary of State Barbara Cegavske (R) announced that the Nevada Constitution did not permit her to remove the certified petitions from the ballot despite the 2021 law authorizing petition withdrawal. In a letter explaining her decision, Cegavske wrote, "The use of the word ‘shall’ in ordinary language imposes a mandatory, not discretionary, obligation. Although the Nevada Legislature can adopt statutes ‘for procedures to facilitate the operation’ of the initiative process as provided in [the Nevada Constitution], the affirmative duty imposed by the Nevada Constitution on the Secretary supersedes any statutory enactments by the Nevada Legislature that contradict the affirmative duty."

Lawsuit

On December 29, 2021, Fund Our Schools and Nevadans for Fair Gaming Taxes, the PACs sponsored by the Clark County Education Association, filed a lawsuit against Secretary of State Barbara Cegavske (R) asking the court to allow the initiatives to be removed from the 2022 ballot. The PACs argue that the law passed in 2021 allows them to remove their initiatives from the ballot. The union said in a statement, "CCEA expects that the law will prevail and the Secretary of State will be required to withdraw both initiative petitions."

On March 9, 2022, District Court Judge James Wilson ordered Cegavske to withdraw the initiatives and not put them on the 2022 ballot. Wilson wrote, "Nothing in Article 19 appears to contravene the Legislature’s ability to enact a provision permitting proponents such as Petitioners from deciding to withdraw their initiative measures.”

On March 15, 2022, Jennifer Russell, a spokesperson for Cegavske, said regarding Wilson's ruling, "We’re moving forward with the appeal.”

On June 28, 2022, the Nevada Supreme Court ruled for the petition to be withdrawn from the ballot. The majority ruled that the Constitution allows the Legislature to facilitate the operation of citizen initiatives.

Nevada Resort Association v. Clark County Education Association

Lawsuit overview
Issue: Is the ballot summary misleading?
Court: Carson County District Court
Ruling: Ruled in favor of plaintiffs, requiring petitioners to resubmit ballot summary
Plaintiff(s): Nevada Resort Association	Defendant(s): Clark County Education Association

  Source: The Nevada Independent

In February 2020, the Nevada Resort Association challenged the ballot language submitted by initiative petitioners. The plaintiffs argued that January 1, 2023, will not be the date of effect as stated in the petition, and the funds raised by the increased fee are not solely dedicated to public education. The Nevada Constitution says that taxes imposed through the initiative process "take effect upon completion of the canvass of votes by the Supreme Court." On March 13, Judge James Wilson ruled in favor of the plaintiffs requiring initiative petitioners to change the effective date and clarify that revenue from the fee would go into the general fund.

See also

2022 measures

• 2022 ballot measures
• Taxes on the ballot
• Gambling on the ballot

Nevada

• Nevada ballot measures
• Nevada ballot measure laws

News and analysis

• Ballot measure lawsuits
• Ballot measure readability
• Ballot measure polls

External links

• Initiative full text
• Financial Impact Statement