Nevada Gaming Commission hesitates to refund interest on a $3.1 million tax overpayment made by a slot machine operator
The Nevada Gaming Commission is set to pay $222,744 in interest on a $3.1 million tax overpayment made by Dotty's, a commercial casino in Nevada. The overpayment, based on $46.9 million in gaming revenue over a nearly three-year period from August 2021 through March 2024, was due to the casino management system not being state-approved and unable to tell what overpayments had been made.
Senior Deputy Attorney General John Michela stated that state statute dictates the payment of interest, even when an operator is at fault. This is based on Nevada Administrative Code (NAC) regulations related to tax refunds and over-collections, which require interest to be paid on tax overpayments to compensate for the time value of money and to comply with administrative rules on tax refunds.
Commission Chair Jennifer Togliatti described the financial burden on the state as the "best investment ever" due to the high interest rate, with the interest currently calculated at 4 ΒΌ%, accumulating at $446 a day. However, Commission members expressed a willingness to pay the interest, but are perturbed by doing so for someone else's mistake.
Commissioner Brian Krolicki criticized Dotty's for its lack of attention and stated that it is impossible to know how much interest the state made for holding the funds. Dotty's general counsel Kannon Smith, on the other hand, stated that the operator didn't request the refund, but it was calculated at the direction of Gaming Control Board staff.
Smith is open to discussions about the interest payment, but needs to talk with his client before making any concessions. The Commission has directed the matter to be referred back to staff for discussion of a settlement.
If Dotty chooses to challenge the interest payment, it can pursue an appeal process under Nevada law. This might involve filing a formal appeal or objection with the Commission detailing why the interest payment is not justified or disputing the calculation. Dotty could also present evidence or legal arguments that the interest should be waived or reduced based on specific circumstances, such as delays caused by the state or errors in computation. If administrative remedies are exhausted, Dotty could take the matter to Nevada courts specialized in tax or gaming regulation disputes.
The system has been making correct calculations since April, and the payment of the principal and interest was put before the Commission at the direction of the Nevada Gaming Control Board. Despite the ongoing discussions, it remains to be seen whether Dotty will agree to the interest payment or pursue further legal action.
In light of the casino-and-gambling incident at Dotty's, a casino in Las Vegas, the Nevada Gaming Commission is scheduled to pay a significant amount of interest on a tax overpayment. This is a result of casino-culture missteps that led to an overpayment based on revenue from casino-games, such as slots, over a nearly three-year period. The interest rate, currently calculated at 4 ΒΌ%, accumulates at $446 a day, making it a substantial financial burden for the state. However, Commission members are concerned about paying for someone else's mistake.
