"As the state of Florida negotiates a compact with the Indian tribes regarding the taxation of tribal casinos, it should avoid the mistakes of other states, most of which have left billions of dollars on the table through poorly designed compacts that were highly favorable to Indian tribes.
Indian gaming is a sizable business in Florida, and revenues for 2006 were $1.6 billion, according to the Indian Gaming Industry Report. Based on the tribes’ near-monopoly position and their exemption from federal, state and local taxes, their casinos are extremely profitable. The tribes do not report financial results publicly, but a reasonable estimate of operating income before third-party management fees, interest payments and rental expenses is $1 billion annually. Indeed, if the tribal casinos were listed on the New York Stock Exchange, the resulting shares would have a market value in the billions of dollars. It is clear that the tribes can afford to pay substantial taxes to the state and the question becomes the following: How much is appropriate?" Get the Story: