Lake Stevens weighs impacts of possible gambling moratorium

BY AMY CODISPOTI | JOURNAL REPORTER Lake Stevens city officials are at a crossroads when it comes to the question of how welcoming the city ought to be of future gambling businesses and the city’s tax rates for such businesses.

On the one hand, the council is concerned that the city’s current low tax rates, one of the lowest is Snohomish County, will serve as an unwitting invitation, making Lake Stevens a magnet for more gambling establishments such as the current one in Frontier Village, the Highway 9 Casino.

On the other hand, the council is considering how the existing business will ultimately be impacted by any decision made.

“We have to recognize that the tax rates may make us look like a more attractive place for gambling businesses,” said City Council President, Heather Coleman. “That’s not the character of Lake Stevens and not what the public has expressed they want for their community.”

The council’s concerns aren’t new ones and were struggled with back in November when the council held discussions before the current tax rate was approved.

“We knew that the tax rates we established were a lot lower than the county’s,” said City Administrator, Jan Berg.

The new tax rates, which are less than half of the County’s rates, were approved in December, just before the annexation of Frontier Village - and it’s solitary casino.

Prior to the council’s unanimous approval of the new tax, the city did not have a gambling tax.

“The council spent a lot of time trying to establish a tax that would be fair and not too cumbersome for the businesses to adopt, and established a phase-in approach,” Berg said.

For businesses that operate social card games, such as the Highway 9 Casino, the city’s taxes are being phased in at a three-step rate.

Effective January 2007, the business pays 1% of net gambling receipts. This rate increases by 1% in January each year until 2009. In 2009, the business will pay 3% of net gambling receipts on the first $500,000 and 5% on anything beyond that.

Berg said that some neighboring cities, including Marysville, have implemented a ban on social card games.

According to the Gambling commission, nine Snohomish county cities have such bans in place, prohibiting gambling businesses from operation within their city limits.

“At this point, the council will continue studying the options with a possibility of banning it in the future,” Berg said. “We don’t want to do anything to hurt existing businesses, but we also want to let businesses out there know that we don’t want additional social card rooms.”

The council’s option to have a moratorium is being investigated by the city attorney and council staff who are studying what other cities have done.
According to Berg, under a moratorium no new licenses could be issued andwith Highway 9 Casino’s license coming up for renewal this December, the question is how the business will be impacted.

“We need to make an informed decision based on what happens to existing business,” Coleman said, “There are more than 100 jobs there.”
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We’ll definitely be discussing this more,” Berg said. “We’re studying all our options and the legislation that would effect our options.”

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