Wager sum can be kept secret, S.C. justices say
The S.C. Supreme Court ruled 4-1 Monday that casino boat companies do not have to report monthly wagers at gambling machines to the state, a move that some say could make it hard for municipalities to collect casino boat taxes.
Horry County instituted a USD 7-per-passenger tax on two casino boat companies in Little River earlier this year, but John Weaver, the county attorney, said Monday’s ruling should not affect the county’s ability to collect the tax.
The lawsuit pitted SunCruz Casinos, one of the Little River operators, against the S.C. Department of Revenue.
At issue was whether the company was required to submit monthly reports of total wagers, or just a percentage of winnings to losses to the department.
Monday’s ruling reversed a decision by the state’s Administrative Law Court in 2006 that said the casino boat companies should be required to report their total wagers each month.
The majority ruling said the department is still allowed to obtain the total wagers from casino boats on an annual basis since state law requires the department to conduct annual audits of the companies.
But the department can only get percentages of winnings to losses on a monthly basis, and not total wagers, because state law explicitly mentions monthly percentages, but not monthly wagers, the ruling said.
Justice John Waller disagreed with the majority ruling.
State law allows municipalities to levy a tax on total wagers, also called gross proceeds, so not allowing the department to get monthly reports of the proceeds would make it hard for municipalities to know how much tax they should be collecting.
„The result of the majority’s interpretation would lead to the absurd result that counties and municipalities have the ability to levy a tax on gross proceeds of a gambling vessel, but the gambling vessel is not required to report these gross proceeds,“ Waller wrote.
Weaver, the county attorney, said the ruling should not affect the county’s tax on casino boats because the county, SunCruz and Southern Cruise Lines, the other Little River boat operator, signed a consent order at circuit court in Conway agreeing to the county’s tax.
The companies also agreed to drop a lawsuit challenging the tax.
The county has collected nearly USD 550,000 from the tax this year, according to the county’s finance department. The county estimates it will collect USD 2.1 million in fiscal year 2009, which runs from July to June, according to the proposed budget.
Harry Hancock, an attorney with the Revenue Department, said the department would not appeal the ruling and that he was pleased the court had clarified the state statute.
Gary Inks, the vice president of marketing and sales for SunCruz, could not be reached for comment Monday afternoon.
Dwight Drake, a lawyer with Nelson Mullins in Columbia who represented SunCruz, also said his client was happy with the ruling, although he called it a „moot point“ since the county and the casino boats had already agreed on the tax.
„The government was asking for more information than the law provided for them to request,“ he said. „This client, like most people, is perfectly willing to abide by the law, but is not willing and is not eager to provide more information than the law requires.“