The PRHTA said that the tax reform enacted by the governor is not revenue neutral.
Puerto Rico.- The Puerto Rico Hotel and Tourism Association (PRHTA) released a statement in which it reiterates that the tax reform enacted by the Governor is not neutral as it will cannibalise the revenue received by the government from casino operations.
The tax reform legislation, which legalises gaming machines outside casinos, was passed by the Puerto Rican Legislature and signed by the Government in November. The Financial Oversight & Management Board for Puerto Rico had voiced its disagreement with the measure as it considered machines would cannibalise revenues that casinos pay to fund other government programmes.
Clarisa Jiménez, president and chief official of the PRHTA, said in a statement that a study by Spectrum Gaming Group, commissioned by the Tourism Company, evaluated the impact of legalizing the slot machines outside the casinos and concluded that the reduction in casino revenues would be between US$149 million and US$195 million, which translates into losses for the University of Puerto Rico of up to US$35.4 million annually, while the general fund and the Tourism Company of Puerto Rico (PRTC) would lose up to US$42.5 million each year.
“These numbers make it impossible for the measure to be neutral. Even when the slot machines produce some revenue, the multimillion-dollar losses Spectrum projects will leave the register short,” she added.