Kent City Council rejects proposals to allow more casinos, cut gambling tax

The Kent City Council decided to fold Tuesday night on a proposal to cut the Great American Casino’s gambling tax rate. The council also shut the door on the idea to open up the town to more than one casino.

The council’s Operations Committee voted 2-1 last month to cut the city’s gambling tax on gross revenues of casino card rooms from 11 percent to 7 percent in order to help Great American reduce its losses of more than $1 million over the last two years at its Panther Lake facility.

But Council President Dennis Higgins pulled the tax-cut ordinance from Tuesday’s agenda because so many councilmembers were against the reduction.

“In one-on-one conversations you have as council president you find out whether you’re spinning your wheels on an issue or not,” Higgins said. “In this case, my decision is to pull it from the agenda because I didn’t consider it likely to pass.”

Great American operators had asked the city for the cut, partly because Auburn has reduced its gambling tax to 4 percent over the last couple of years while Des Moines has only a 1 percent tax in efforts to attract casinos.

“It certainly sounds like there’s more discussion needed before they want to bring that to a vote,” said David Fretz, Great American president. “We’re hoping that we can have some discussion with some of the councilmembers to show them what we are all about and maybe they’ll vote our way.”

Higgins said it’s doubtful that the gambling tax cut will come up again anytime soon.

“It’s really hard to say,” Higgins said. “It doesn’t look likely.”

Prior to the regular council meeting, councilmembers met in a workshop to discuss a proposal to remove the city’s ban on casinos in an effort to bring in more casinos and therefore more city tax revenue.

Great American operates under a grandfather clause adopted by the council as part of the 2010 Panther Lake annexation to the city, which included the casino. No other casinos are in Kent. Great American also is interested in possibly moving to another site in Kent, but cannot do so unless the city removes its ban.

Councilman Les Thomas originally brought up the idea to allow a couple of more casinos in the city as a way to raise more tax revenue. Great American paid $335,000 in gambling taxes last year to the city.

“Tukwila’s footprint they already established is an excellent one,” Thomas said at the workshop. “Two or three casinos is not a Las Vegas. That doesn’t affect our family image. We have the state lottery and we have one casino. To allow or two or three is not a big deal. We’ll still be known for parks and schools.”

But a council majority made it clear they oppose opening up the town to more casinos or allowing Great American to move simply to improve revenues.

“I say do nothing,” Councilwoman Elizabeth Albertson said. “I don’t think it will serve the people well. All of the emails I’ve got have been anti-expansion of casino gambling. We are known for our parks, our sports programs and our commitment to youth. We are not known for gambling. That is Tukwila. No offense to my friends in Tukwila but we all kind of have our niche. I don’t think this is worth the gamble, so to speak.”

Councilwoman Deborah Ranniger said the council shouldn’t get involved with private business decisions about whether to stay open and that casinos aren’t part of the council’s vision for the city.

“Starbucks inside Top Foods (on the East Hill) closed because business declined,” Councilwoman Deborah Ranniger said. “They made a business decision to close. That’s not a city council policy issue. A lot of businesses make a decision to move locations or close. And it doesn’t fit the vision we described and embraced. It doesn’t align opening casinos across the city and I’m not seeing a rallying cry to do that.”

Great American general manager Shannon Younker said during an interview after the workshop she wished the council had kept the conversation going about whether to remove the ban.

“I’ve been in business here for almost 10 years, we count, too,” Younker said. “To ask why are we still talking about this, we have a right to come and ask our city for some help instead of always feeling like we are the black sheep of the city.”

With just 5,400 square feet, Great American officials say they need a larger facility.

“Our challenge is that the location we are in is so small,” Fretz said. “I struggle with what do we do. We are not profitable where we are. Some of it is the economy but some of is the size of our building. Our restaurant is 20 seats maybe.”

Great American also has casinos in Tukwila, Lakewood and Everett.

“Lakewood is struggling a little bit, Everett and Tukwila are doing OK,” Fretz said. “As a business we’re doing OK. Our challenge in Kent is we are not profitable. I have to make some decisions about whether we can continue to lose money in a jurisdiction that we like to operate in and has potential in the future but isn’t making money. Do I move to a different jurisdiction?”

When asked whether he might move to Des Moines with its 1 percent gambling tax, Fretz said, “I’m going to plead the 5th.”

Thomas said he understands if Great America moves out of town.

“If I was Great American I’d tell Kent where to go and go to Des Moines or to Renton,” Thomas said. “They are going to have to make a decision soon whether to stay in Kent with their 105 employees.”

Younker wished the council showed more support. Most councilmembers said they had no problem with Great American, they just don’t want more casinos.

“We’re a good community neighbor as long as nobody talks about us,” Younker said. “In the future of Kent, let’s have another thrift store on another corner. How many of those do we have and yet we’re worried about this casino.”

Younker said the council certainly pulled the welcome mat.

“We have a 20-year plan so I’d like to be in a city that we are welcome in,” Younker said. “Some have tried to work with us but not everybody’s on board.”