Nuanced approach to gaming tax needed

The TT Coalition of Bars and Restaurants (TTCOBAR) and the Barkeepers Owners/Operators Association of TT (BOATT) have stepped forward with vigorous complaints about the government's proposed gaming amusement tax.

Both organisations believe that an increase of more than 400 per cent for each gambling machine annually, from $6,000 to $25,000, will be a disaster for hundreds of community-based bars that are said to depend on revenue from the machines to supplement their bottom lines.

That perspective was supported by the TT Coalition of Service Industries, which called for collaboration and discussion on the matter.

In other jurisdictions, taxes on gambling machines operating outside of casinos are based on the revenue from each machine.

Are bar owners willing to be transparent about their actual take from each machine in their watering holes?

Sixty per cent of the estimated 2,500 bars operating in TT are said to operate with known gambling machines.

The returns are evidently lucrative enough that otherwise legitimate bar licensees are willing to risk fines for undeclared machines that run to the hundreds of thousands of dollars.

Payouts for these machines are lower than those offered in private members' clubs, which pay a tax of $24,000 annually for a slot machine and $120,000 for a roulette table. Bar owners are already talking about cutting staff to pay the new tax.

After the cost of acquisition and the annual tax, a gambling machine is an otherwise no-cost way of relieving customers of their hard-earned cash. It does not require a salary to serve or mix drinks and accepts cash efficiently. It is a revenue-producing tool for bars that does not require sick leave.

How will the government improve tax collection in the sector if more bar owners take their machines underground?

Games at a bar, such as pool or darts, are inherently social and provide a sticky incentive for customers to hang around, ordering more drinks.

Despite the softer term "gaming," the equipment that's being taxed is not an arcade game, despite its colourful screen. It is a sophisticated electronic gambling device and unlike traditional bar games, these are devices that encourage solitary, focused use.

Gambling machines create no new jobs while offering a powerful lure for the probability addicted to sink ever-increasing sums of money into the dispassionate maw of these devices in the hope of an elusive payoff.

Taxes on such devices globally are normally turned to specific use, including funding programmes to rehabilitate compulsive gamblers.

It's a nuanced issue and one that deserves more attention and collaborative conversation than a blunt and potentially damaging 400 per cent hike that appears to be part of the government's effort to finance its programmes through taxes that increase the cost of pursuing bad habits.