Casino franchise owner OK with interest-free gaming tax refund from state

The Nevada Gaming Commission didn’t sign off Thursday as planned on a settlement for a $3.1 million tax overpayment refund to the company that operates the Dotty’s casino franchise.

But at least it now appears the state won’t pay any interest on the owed amount.

At its August meeting, the commission was asked to refund $3,120,197.28 in gross gaming revenue tax, plus more than $222,744.12 in interest to Nevada Restaurant Services Inc., the owner of 41 licensed casinos, including several under the Dotty’s and Bourbon Street Sports brands.

Auditors discovered in 2021 that NRSI had not properly deducted wagered cashable electronic promotion amounts from the gross revenue of $46.9 million, thus overpaying state gaming taxes.

The commission was ready to sign off on the refund in August, but balked at paying the accrued interest because NRSI had spent so much time requesting the refund. At that time, interest on the overpayment was accruing at roughly $446 a day.

On Thursday, NRSI’s attorney, Kannon Smith, told commissioners the company was willing to waive being paid interest on the owed amount. However, in the company’s research, it was determined that tax overpayments had occurred for two more years before it was discovered. Under Nevada law and policies, NRSI is allowed to request a refund on overpayment for up to five years, plus interest. Based on that, NRSI determined that since 2019, the company has overpaid an additional $1.8 million.

Smith said the company would not seek interest payment on that amount either.

“I’d like to say that there are millions of dollars that NRSI overpaid in taxes that are outside of this five-year limitation that NRSI cannot make a claim for refund for and so NRSI is just pursuant to the statute making a claim for the full five years,” Smith told the commission.

The Nevada Gaming Control Board and the Attorney General’s Office, which presented the refund request to the commission, denied a Review-Journal request for a copy of the proposed settlement documents.

Commissioners agreed Thursday that because no interest was accruing that they could wait until their October meeting to settle what now will be a nearly $5 million tax refund request.

Commissioner Brian Krolicki, who chaired Thursday’s meeting, said he was satisfied with the final outcome.

“The issues that arose at the last meeting were just about fairness,” Krolicki said. “I understand statute and law and we’ve got to do what it says, but there was just something inherently uncomfortable about some of the parts. To create such an unfairness to the Nevada taxpayers in this, I appreciate that you heard that. It was the interest that I think was the only problem. If you’re on record for your client that that interest is waived, you’re getting your rightful money, the principle.”

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.