Taking the matter to the court, MGM Grand Detroit is asking to make uncollected gaming debt tax free. The casino officials have said in their filing with the court that losses incurred due to uncollected debt should not be taxed.
According to Crain’s Detroit Business and as reported by Casino.org, “the cases stem from one player being issued a $3 million credit line who lost $677,500 playing at MGM Grand Detroit tables. In the second instance, an individual was issued a $2 million line of credit, and lost nearly it all ($1.945 million).”
The casino issued a 10 percent credit to the players and now it is arguing that the Michigan Department of Treasury refund the taxes it paid on the forgiven debts, which totals $55,000.
The Michigan Gaming Control and Revenue Act does have a provision in that regards. It allows casinos to deduct uncollectible losses against their gross gaming revenue (GGR) wins.
The law states, “‘Gross receipts’ means the total of all sums including valid or invalid checks, currency, tokens, coupons, vouchers, or instruments of monetary value whether collected or uncollected, received by a casino licensee from gaming, including all entry fees assessed for tournaments or other contests, less a deduction for uncollectible gaming receivables.”
However, the deduction can only be made after the casino notifies the treasury department that certain winnings were uncollected due to indebted players.