International edition
September 28, 2020

A 33 % tax on gross gambling revenues approved

Alaska tax on cruise ship casinos is still a work in progress

(US).- One of the more interesting wagers of the summer is how much money Alaska is going to collect from its new gambling tax on the cruise ships that visit its ports, according to the website Cruise-Casinos.com.

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laska voters in last August’s primary election approved a variety of new levies on cruise ships including a 33 percent tax on gross gambling revenues of cruise ship casinos while they are in Alaska waters.

Draft regulations for the gambling tax are still being written with the hope that they can be adopted early this fall, and tentative plans call for the the payment of this tax to be due each year on April 15.

While guesses as to how much the state will receive from the cruise line gambling tax have ranged around us$ 15 million, “Nobody can really handicap how much money will come in on gambling,” said Joe Geldhof, a Juneau attorney who helped draft the initiative.

Several cruise lines have said that they are not inviting groups of casino "high-rollers" on Alaska cruise junkets this summer as a result of the tax they would have to pay to the state if these cruises proved profitable to the cruiseline.

Alaska state officials also have expressed some concern about how they will verify taxable gaming revenue. “The question of how we’re going to audit that is yet to be determined,” said Jerry Burnett, legislative liaison for the Revenue Department, told the Alaska Journal of Commerce.

“I’m assuming these are reputable corporate operators, and they’re going to tell the truth,” Burnett added, but he also suggested it is “likely that we will have to do some kind of test to determine if they are reasonable. I think we may have to send an observer (on board).”

Meanwhile, the other tricky issue is how to calculate exactly how much money is won or lost on cruise ships in Alaska state waters - the only time the income is subject to the tax.

When ships are in so-called donut holes -areas in larger channels that are more than three miles from any shoreline such as the Southeast panhandle’s Inside Passage - they are exempt from the tax, according to John Shively, a spokesman for Holland America Lines.

“It’s a problem. Things don’t just turn on and off when you cross a line. My guess is the state’s going to have to come up with some kind of proxy system, based on the time we’re in Alaska waters,” Shively said.

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