Federal Way halves gambling tax in 6-0 vote

Federal Way leaders have sliced the city’s card-room gambling tax in half to help reopen the only casino in the city that was paying the tax.

By a 6-0 vote, the City Council declared an emergency Tuesday night and passed the card-room tax cut – from the maximum 20 percent to 10 percent – to take effect this Sunday. The council also voted to reduce the pull-tab tax, effective Aug. 1.

Steve Griffiths, co-owner of P.J. Pockets Casino, said he intends to reopen his casino within 45 days. The minicasino shut down May 3, laying off all 85 full-time employees.

“We get to bring our employees back,” Griffiths said Tuesday, adding he intends to employ 100 workers.

He has said the card-room tax cut would mean the difference between losing and making money. Because of the recession, people have less discretionary income to spend on gambling, he said.

Several council members said they favored the card-room tax cut to help a small business.

City Manager and Police Chief Brian J. Wilson suggested the tax reduction in a meeting with Griffiths about a week after P.J. Pockets closed its doors at 1320 S. 324th St.

Federal Way resident James Simpson was the only person to speak against the cut.

“I just don’t believe a credible case can be made that we residents, as a whole, will be better off,” Simpson said.

The average card room tax that cities levied last fall was 9.8 percent, the Washington State Gambling Commission reported.

P.J. Pockets paid the city $842,369 in card-room tax revenue in 2009, according to figures from the gambling commission’s website.

Federal Way’s total revenue from gambling for 2009 was about $1.13 million.

The City Council also voted 5-1 Tuesday night to cut the tax on pull tabs/punchboards. About a dozen taverns, pubs and restaurants, as well as P.J. Pockets, have those games.

Council member Jeanne Burbidge cast the only dissenting vote on the emergency provision to reduce the pull-tab tax from the maximum 5 percent to 3 percent. It required a unanimous vote. Her dissent delays its going into effect until Aug. 1.

Burbidge said she favored a 4-percent tax rate because it was closer to the 5-percent rate of most nearby cities, and she didn’t want to encourage the proliferation of gambling.

In 1998, the City Council hiked the gambling tax on card rooms from 11 percent to 20 percent to pay for new police officers and prevent the proliferation of gambling businesses.

Some council members said Tuesday night that the economic outlook for more gambling businesses in Federal Way has changed since 1998 with the increase in tribal casinos in the region.

Steve Maynard: 253-597-8647
steve.maynard@thenewstribune.com