New Mexico demands $40 million from three tribal casinos

  • Three tribes locked in dispute with state regulators over tax bill for casinos
  • Taxes amounting to $40 million are related to free credit play at tribal casinos

A triumvirate of New Mexico tribes have found themselves at loggerheads with state regulators over a huge gambling revenue bill. The sum at the centre of the dispute is not insignificant, amounting to an eye-watering $40 million.

new mexico tribe casino trouble

The disagreement has now made its way to the courts, where representatives of the Tesuque, Isleta and Sandia tribes have argued that they are not due the state of New Mexico this staggering amount. According to the tribal casinos, the state has misinterpreted an old agreement and is in violation of federal law.

‘Accountable for state dollars’

State regulars unsurprisingly aren’t being cowed and are adamant that the tribal casinos must pay their dues. “We simply believe in being accountable for state dollars,” said a spokesman for Republican governor Susana Martinez. “However, we have only been made aware of this lawsuit and cannot comment further.”

The dispute centres around The Land of Enchantment, a territory reserved for Native American tribes that is home to 28 casinos in addition to five racetracks. These also offer gaming facilities, and are colloquially known as racinos. It’s a land of disenchantment at present however as tribal leaders bitterly protest that they shouldn’t be on the hook for $40 million.

Dispute over free play credits

The matter which the courts are currently attempting to resolve pertains to free play credits, which are used to incentivise punters into playing slots. The dispute revolves around whether or not casinos should be liable for tax on free play credits.

Back in 2015, gambling legislation specified that free credits were not tax liable, but that all changed in April of this year when gambling regulators requested payment from free credit play. At present, just three of the casinos situated in The Land of Enchantment have been billed for free credit taxation, though it’s possible that more casinos may be added to that list.

Sandia Pueblo is due $26.5 million in taxes, Isleta Pueblo is due $10.3 million and Tesuque Pueblo is due $3.2 million. The casinos in question are adamant that they are not due a cent of the tax bills they’ve been slapped with and maintain that the government is engaged in a shameless cash grab. It’s no secret that the state of New Mexico has a budget shortfall of $70 million and the disputed $40 million would go some way towards plugging that gap.

Much of the shortfall is due to reduced oil production, which once accounted for a budget surplus that New Mexico enjoyed. Since then, production has dropped, forcing the state government to scrabble around in a bid to raise money wherever it can. The tribal casinos are putting up a staunch fight however and it is likely to be several months before the matter is resolved in court one way or another.

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