The New Mexico Gambling Control Board claims five tribes owe nearly million in casino revenue taxes related to a dispute over the use of free play slot machine credits. The state said Tesuque Pueblo owes .2 million, Sandia Pueblo owes .5 million, Isleta Pueblo owes more than .3 million, Santa Clara Pueblo owes million and Santa Ana Pueblo owes million. The tribes said the tax is illegal and violates federal law. They recently filed a lawsuit against the state.
In a statement, governors of the pueblos said, “This claim makes no sense. It is a specious attempt to reach deeper into the pockets of New Mexico’s Native American tribes than the agreements between the tribes and the state provide.” They compared it to a clothing store selling shirts on sale for half price but charging tax on the full price.
New Mexico casino operators typically use free play slot credits to attract players. However, if players lose, casinos do not report the credits as income for tax purposes. But state regulators argue that all casinos should pay tax on all earnings from gamblers, including paying taxes on free play wagers.
The 2015 gaming compact between the state and the tribes does not count free play slots credits in the definition of taxable revenue. However, as the state attempts to recover from a budget crisis, regulators want pueblos and tribes pay for credits issued before the 2015 compact. The federal Bureau of Indian Affairs sided with the tribes. Then-Assistant Secretary Kevin Washburn wrote, “It is our view that the state’s unilateral determination to include such sums in revenue sharing calculations would constitute an impermissible tax.”
A spokeswoman for Governor Susana Martínez said, “We simply believe in being accountable for state dollars. However, we have only been made aware of this lawsuit and cannot comment further.”
