Regulator argues tax revenue should go to state where gaming server is located
The Alderney Gambling Control Commission (AGCC) has urged Nevada to consider gaming compacts with jurisdictions beyond the US by amending its current online gaming legislation.
The AGCC was responding to a request made last month by the Nevada Gaming Commission for comments on how interstate compacts should be structured, particularly regarding revenue sharing.
Michael Ellen, AGCC director of licensing and strategy, stressed Alderney’s interest in striking an online gaming compact with Nevada should the state amend its current regulations to allow such an agreement.
“The original provisions of Assembly Bill 114 appeared to allow compacting with jurisdictions outside the US,” Ellen said. “These provisions now appear to restrict the ability to compact to only US states. While we understand there may have been political reasons for the change, we would urge that the law be amended to allow the Governor to consider other jurisdictions.”
As part of its reply, the Alderney regulator also argued the location where a bet is made should be deemed to be the state containing the gaming server therefore giving this state the right to determine where tax revenue is allocated. However, the state in which the player is located would be entitled to indirect taxation such as gaming duty, the AGCC continued.
The AGCC’s view is not shared by Arizona-based company Automated Revenue Collection System (ARCS) though, due to complications surrounding tribal sovereignty.
In ARCS chief executive Greg Mullally’s submitted response, he argued players themselves should be directly taxed based on their physical location. With tribes not required to provide a state with tax revenue under the Tribal Gaming Act, Mullally said taxing the player would ensure state governments do not miss out.
Other comments received from individuals focused on the need to make sure player funds are kept in segregated accounts and ample care is taken to prevent fraud from both operators and players.
Nevada Governor Brian Sandoval legalised interstate compact legislation in February, claiming regulation in New Jersey made the change a necessity to “help Nevada maintain its position as the gold standard in gaming”.