Castle Rock considering gambling tax reform

The Castle Rock City Council is being asked to re-examine their gambling taxes in light of the fees’ impact on local businesses.

It was stated during the Jan. 27 council meeting the owners of the Pastime tavern (127 Front Ave. NW) have expressed concern regarding the city’s five-percent tax on the gross revenue from their pull-tabs, stating they are not able to turn a profit on the games at that rate, according to Mayor Paul Helenberg.

“Lewis County charges zero on gambling tax and they were wanting to know if we would at least look at it and lower it somewhat,” said Helenberg, stating he has been told pull-tabs are a major draw for those visiting the Pastime.

In addition to the tax on pull-tabs, the Pastime and other organizations, both commercial and non-profit, are required to pay five percent of adjusted gross revenue, meaning funds raised minus the cost of prizes, from bingo games and raffles; two percent of adjusted gross revenue from amusement devices, such as pinball machines and pool tables; and 20 percent of gross revenue from card rooms. Non-profits, however, pay a rate of 10 percent of adjusted gross revenue for pull-tabs, according to Ordinance 99-22.

City Clerk Ryana Covington said these rates are currently the highest the city is allowed to levy, according to RCW 9.46.110, and generated around $22,000 for the city’s general budget last year, the bulk of which she said was used to support law enforcement. It was mentioned most of this revenue came from the Pastime, though a portion was also contributed by organizations such as Parker’s restaurant the Fraternal Order of Eagles, who hold gambling-oriented fundraisers during the year.

Helenberg said he understood the need to give businesses a hand, particularly when high taxes could mean closing their doors, but also said the city can’t afford to lose a viable source of revenue, especially when income from other sources such as the hotel/motel tax have all but dried up.

“I can’t see doing away with it because it’s a big part of the budget,” he said, “but I think we need to definitely take a look at it, give them a break somewhere along the line. They [the Pastime] put a lot of money into charities around town.”

Helenberg said he would like to form a committee to look at alternatives, and directed City Attorney Frank Randolph to examine the current ordinance and the city’s other options. Covington said one proposed option would be to apply the non-profit rate to businesses as well, so they would pay the tax out of their adjusted gross revenue rather than all money received through the games.

Covington also clarified any amendment would not just be for the sake of the Pastime but would affect all businesses offering gambling or amusement devices.

The next Castle Rock City Council meeting is scheduled for Feb. 10 at 7:30 p.m. at the Senior Center. Those with questions or in need of accommodations may call (360) 274-8181.