Quote:
Originally Posted by Dima2000123
On this particular point, and this particular point only, I'm going to side with Jim215. There is no way that NJ casinos pay 8% tax on revenues if you definite revenue as any time casino wins a bet.
This is correct. But "revenue" has a very specific definition in the gaming industry, and "any time casino wins a bet" is not it.
Quote:
Originally Posted by Ruler of the East
That is correct. The money going into the slot machine is called coin in.
Stan
Stan, this is simply not accurate. If a player puts a $5 bill into a slot machine with a $1 bet per spin, and has the following results:
- insert $5 bill ($5 credits left)
- bet $1 lose $1 ($4 credits left)
- bet $1 lose $1 ($3 credits left)
- bet $1 win $5 ($7 credits left)
- bet $1 lose $1 ($6 credits left)
- bet $1 lose $1 ($5 credits left)
- bet $1 lose $1 ($4 credits left)
- bet $1 lose $1 ($3 credits left)
- bet $1 lose $1 ($2 credits left)
- cash out $2 (zero credits left)
then the relevant statistics would be:
coin-in: $8
gaming revenue: $3
Jim215 is correct that revenue taxes are computed on the $3 of gaming revenue, NOT the $8 of coin-in or the $5 inserted into the machine. This is because the $3 is defined as REVENUE by the regulating state commissions as well as the accounting boards and SEC, and the IRS. $3 is not PROFIT, which comes after payroll, revenue taxes, interest on debt, the electric bill, and every other expense that every business has. The casinos then pay income taxes, just like every other company, on their net profit.
Perhaps this is nit-picking, however when your post contains the word "profit" capitalized, bolded, and underlined, you should make sure that you are using the word correctly. Because it has a unique way of making money, the gaming industry has defined these terms very specifically and exactly, so when you say "profit" when you mean "gaming win", you are incorrect.
Regardless, this argument is irrelevant, since I have already pointed out (in post #79) the government-published win and hold statistics for both NJ and PA which clearly demonstrate that PA is very much in line with NJ casinos in terms of hold percentage and payback percentage to the players. In both states the hold % is about 8 to 10%.
(OFF-TOPIC: Stan would be correct if he was talking about table games, not slots. Slots and table games are accounted for differently. Slot machines, which are really computers, have the ability to accurately count every single bet. Coin-in is the sum total of all individual bets made on the machines. In table games, every single individual bet is not tracked, so it uses total "handle" (also known as "drop"), which is the sum total of all the cash that goes in the box (the slot in the table where the dealer puts your money). So with tables, if you walk up to the table with $500 cash, buy chips, and leave with $300 in chips, the drop was $500 and gaming win (revenue) was $200. Doesn't matter if you made 2 $100 bets and lost them both, or 40 $100 bets and went up and down. This is different than the way slots calculate coin-in.
Extra bonus fact: typical "hold" on blackjack is 15-17% -- even though the mathematical edge on a single hand is about 1%, the recycling of bets means that for every $100 cash that goes in the box, the casino typically keeps $15-17.)