The general manager of at least one of Iowa’s state-licensed casinos is voicing concern about a piece of Governor Branstad’s budget plans. Branstad is asking legislators to approve a double-digit increase in the state tax on casino profits, raising the tax rate to 36%.
Prairie Meadows in Altoona and the Horseshoe Casino in Council Bluffs currently pay a 24% tax, while the 15 other operations pay 22%. Bob Thursby is general manager of Terrible’s Casino in Osceola. “It’s a real hit to us,” Thursby said of the possible tax hike. “I think anyone in business would realize almost doubling the tax on our gross income would have a devastating effect on us.”
Branstad’s plan would allow the state to collect an estimated $200-million more in taxes. Thursby says the tax hike probably wouldn’t put his casino out of business, but it would definitely alter expansion plans. “We’re meeting with architects, engineers and builders right now to do an expansion to our hotel. We’re going to put another 90 rooms on,” Thursby said.
“That would certainly go on hold. We’re not going to spend those millions of dollars…at least until we can get our arms around what our business model looks like after this massive increase in taxes.” The general manager of the Horseshoe Casino declined to comment on Branstad’s proposals.
Calls from Radio Iowa to the heads of several other casinos have not been returned.