Dotty’s Operator Wins $3 Million Tax Refund from Nevada Regulator

Posted on: November 4, 2024, 08:37h. 

Last updated on: November 5, 2024, 09:24h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

The Nevada Gaming Commission (NGC) unanimously voted in favor of refunding $3.12 million in overpaid taxes to Nevada Restaurant Services Inc., the operator of the ubiquitous Dotty’s gaming taverns.

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A Dotty’s gaming bar. Operator Nevada Restaurant Services is getting a couple of big tax refunds from the state of Nevada. (Image: Las Vegas Review-Journal)

As part of the settlement, privately held Nevada Restaurant Services agreed to forgo claims to $222,744 in interest, which had been building up to the tune of $446 per day. Some members of the NGC had reservations about refunding that cash to the gaming operator because it was late in filing a claim.

The Dotty’s parent is entitled to the refund because it didn’t take advantage of a Nevada gaming tax stipulation that allows operators to deduct certain promotional expenses from gross taxable revenue. Nevada Restaurant Services later figured out it was eligible to deduct.

In addition to Dotty’s, Nevada Restaurant Services runs gaming taverns in Nevada under the Bourbon Street, La Villita, Points! Casino, and Red Dragon brands.

Nevada Owes Dotty’s Parent More Money

The aforementioned $3.12 million isn’t the only refund coming to Nevada Restaurant Services by way of the NGC.

It was also discovered that the gaming bar operator is owed $1.8 million for two years of overpayments. The Dotty’s owner will accept that amount, but will forego rights to interest payments.

The overpayments occurred because NRSI failed to properly deduct wagered cashable electronic promotion amounts from its $46.9 million gross revenue. Under state regulations, companies can deduct specific promotional costs from taxable revenue, which NRSI overlooked,” reports The Las Vegas Review Journal.

There are 120 Dotty’s locations in Nevada, 80 of which are restricted gaming locations, meaning there are 15 gaming machines per venue. Twenty-seven Dotty’s taverns have as many as 40 gaming devices. None of the properties, nor any of the company’s other establishments, have table games.

How Nevada Gaming Promotion Deduction Works

Nevada’s guidelines pertaining to the deduction of select promotional expenditures are relatively straightforward, but there is some onus on operators to be diligent on this front. That includes maintaining solid documentation and performing regular testing of systems that could be applicable in the deduction claiming process.

“At least annually, all computerized player tracking, promotional accounts, promotion and external bonusing slot systems (in-house developed and vendor systems) are reviewed by personnel independent of the individuals that set up or make changes to the system parameters. The review is performed to determine that the configuration parameters are accurate and that the configuration parameters have not been altered without appropriate management authorization (e.g., player tracking system – verify the accuracy of the awarding of points based on the dollar amount wagered),” according to the Nevada Gaming Control Board (NGCB).