- Associated Press - Thursday, June 4, 2015

PITTSBURGH (AP) - The Meadows Racetrack and Casino would like to go whale hunting - with a little help from state gambling regulators.

An official with the gambling resort about 15 miles south of Pittsburgh told the Pennsylvania Gaming Control Board that the state’s casinos are losing slots revenue to casinos in other states, in part because they can’t deduct the cost of perks casinos use to attract high rollers. Such big gamblers are also known as “whales” in the casino industry.

William Paulos, a principal in Meadows-owner Cannery Casino Resorts, made that argument during the casino’s license renewal hearing Wednesday in Pittsburgh.

Paulos said the state’s 55 percent tax on gross slot revenues, combined with a local 6 percent tax, means the casino would lose money if it spent, for example, $10,500 to fly, wine, dine and lodge some big gamblers who wound up losing $20,000 at the casino’s slot machines.

“I’m a good guy, but I’m looking to make money here,” Paulos told the board. “But for every dollar I add to my bottom line, the state makes a lot more.

Paulos wants state regulators to let casinos deduct the cost of those perks from slot revenues before they’re taxed. If that happened, then instead of the casino losing $2,700 on the example he gave, the casino would turn a $3,705 profit, he said.

The casino needs to tap the market for out-of-state gamblers, say, by flying in big gamblers from Chicago while the Cubs are in town to play the Pittsburgh Pirates. But it can only profit on that if the cost of luxury boxes, a private plane and other amenities are deducted from slots revenue before its taxed, he said.

The board didn’t respond directly to the proposal, though some members indicated such changes would be under the jurisdiction of the Legislature.

State Rep. Dom Costa, D-Allegheny, said he was wary of the proposal before The Meadows made a similar case before the House Gaming Oversight Committee last month.

“We have to stay ahead of the game and look at new ideas that are good for the casinos and the Commonwealth,” Costa said.

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