Greenetrack in Eutaw, Arkansas, the state’s second-oldest dog track and only non-tribal casino, recently closed because its July tax bill was higher than its monthly revenue.
In June, the Alabama Supreme Court enforced a 13-year-old tax assessment which stated that the track owed more than $106 million in taxes and fees. The high court’s opinion also established a new tax structure for electronic bingo casinos, allowing gaming taxes and state taxes to be stacked.
Greenetrack Chief Executive Officer Nat Winn said, “We couldn’t continue to operate at a loss. I’m not sure what the future holds for us. A lot of that depends on how evenly the revenue department treats everyone.”
The high court opinion only allows the Alabama Department of Revenue to collect the taxes; it doesn’t instruct it to collect them. So, the revenue department could enforce stacking taxes on electronic bingo casinos in Alabama, in which case all of the state’s non-tribal electronic bingo casinos would have to close. The exception would be VictoryLand, which is protected by a constitutional amendment.
On the other hand, the revenue department could determine that stacked taxes were unfair and only collect gaming taxes. That decision would let casinos stay in business—but it also would cost the state at least $70 million, and possibly hundreds of millions if imposed equally on other electronic bingo casinos—because it would eliminate the additional taxes Greenetrack owes.
An attorney who has represented electronic bingo casinos in Greene County said, “It’s pretty crazy that you have businesses operating right now and they don’t know for sure if they will be upside down on taxes because the revenue department won’t simply tell them.”
According to the attorney, the court’s decision reversed years of precedent and broke numerous legal norms. For instance, the justices disregarded a 1975 gaming act that established the tax exemption for dog racetracks. It also disregarded subsequent legislation that clarified that the exemption was meant to include all activity at the tracks.
The ruling also overturned two circuit court decisions, including one from a judge that the gaming commission had selected to hear the case. It also overturned a decision by the Alabama Tax Tribunal, which ruled that Greenetrack was exempt from the imposed taxes.
But what truly shocked lawyers statewide, the attorney said, was that the high court ignored long-established precedent and basic law by taking up matters in its opinion that never had been heard at a lower court, never were introduced in appeals and were not considered matters before the court.
The closure of Greenetrack has impacted the surrounding community that has depended on the casino for tax revenue and jobs, observers said.
