Casino boat tax skirmish amplifies County chasing gaming revenues

Horry County pressed forward Monday on the state's first casino boat tax despite a legal challenge from a boat operator.

The tax could go before County Council next month and, if passed, net millions of dollars in annual revenue from two gambling boats in Little River, according to the council's Administration Committee.

The county's been in a tug-of-war over fees and taxes for nearly two years with Florida-based SunCruz Casinos, which is the parent company of one Little River boat.

SunCruz said Monday it's still open to negotiating a passenger boarding fee. Meanwhile, it is suing the state Department of Revenue instead of opening its books to a tax on wagers and winnings.

The case is on appeal after a state administrative law judge ruled July 27 that SunCruz must open its books. The judge also denied a request by SunCruz last week to suspend the ruling until the appeal is completed, which prompted the county to make its move Monday.

SunCruz is using the boarding fee talks to stall county efforts and it's now time to write a tax on gambling proceeds, County Attorney John Weaver said.

"We discussed on and off the possibility of having a boarding fee. Those discussions quite frankly were very shallow; they were very sporadic," Weaver told the Administration Committee during a regular meeting in Conway. "I do not feel they have made a good-faith effort in following up with the concept of a boarding fee."

The new tax could require the gambling boats -- including newcomer Diamond Casinos -- to report wagers and winnings from each gaming table and machine.

SunCruz President Robert Weisberg said the industry is being unfairly singled out with an illegal tax.

"We are trying to work as partners with the county as we have always done," Weisberg said. "We have an obligation to help pay for the infrastructure ]of Little River]."

But because gambling is illegal in South Carolina and the boats must conduct all gaming in international waters, the state should not be allowed to regulate the industry's income and the county should not be able to tax it, he said.

The state legislature passed the law allowing local taxation of casino boat proceeds last summer. SunCruz sued a few months ago and is now taking its appeal to circuit court. It may appeal its case all the way to the state Supreme Court.

"We oppose taxing our revenue because it is illegal" and the courts will ultimately determine the new law to be unconstitutional, Weisberg said.

The county estimates the tax could bring in as much as $2.5 million from the SunCruz boat and the Diamond Casinos boat.

"I think the legislature and the governor told us by statute what we can and can't do. I think we should follow that to the letter of the law," said County Councilman Harold Worley, whose district covers Little River. "I think we should pass this ordinance as quickly as we can. They put us off for a long time and it is time they paid their fair share down there."

The money could be used for improvements to fire and emergency medical services in the town, County Administrator Danny Knight said.

The Little River fire station, which now depends on volunteers, could hire paid firefighters and buy a new ambulance with the tax money, Knight said.

"Of course, there is always a need for police. There is a lot of activity up there," he said.