Video poker industry forms association

The video poker industry has formed the Louisiana Video Gaming Association, with one of the group’s priorities being to head off increased taxes on the devices, according to the new group’s president.

“Our biggest concern in this fiscal session is that (a) gaming taxes go up, or (b) our segment is picked on and it goes up when others don’t,” said Stan Guidroz, vice president, Southern Operations for Jacobs Entertainment Inc.

Truckstops already pay a tax of 32.5 percent on gambling revenue, the highest taxes on gambling revenue in the state, Guidroz said. Bars and restaurants pay 26.5 percent.

Local governments get 25 percent of the taxes.

Guidroz said other venues, such as riverboats, racinos and Harrah’s New Orleans Casino pay lower rates.

While no bills were filed this session that specifically target video poker for a tax increase, the industry and its lobbyists are watching to make sure other bills aren’t amended to do that, Guidroz said.

Meanwhile, the video poker industry will have to invest around $100 million in new video poker machines by the end of 2015, Guidroz said. The Louisiana State Police, which regulates the industry through a centralized computer, is moving to new software and the oldest video poker machines won’t be able to communicate with the new software, he said.

Guidroz said half of the state’s 14,000-plus video poker machines would have to be replaced while others could be upgraded. The State Police have estimated that between 40 percent and 50 percent of the machines will have to be replaced.

“We’re going to unplug a machine that’s paid for or roughly paid for,” Guidroz said. “We’re going to go buy another $13,000 machine, plug it in and play the exact same thing.”

Bars and restaurants account for roughly 90 percent of the state’s 2,082 video poker locations but less than 40 percent of the machines, according to State Police records. The state’s 201 truckstop casinos account for more than half of the devices.

The cost for the new machines could force some bars and restaurants, which typically have only three machines, to close their video poker operations, Guidroz said. The video poker market has matured, and there are lots of machines out there, so it may not make sense for someone who bought machines five years ago, machines now paid for, to invest in more devices.

Guidroz said he doesn’t think the state will lose any tax revenue from video poker, but fewer locations will mean fewer jobs at the locations, and lower fees from permits and licenses for the state.

The new association was formed by former members of the Louisiana Amusement and Music Operators Association, which originally represented jukebox, pool table and pinball machine operators, Guidroz said. Video poker companies joined later.

In recent years video poker industry leaders had been less involved with the group, Guidroz said. The industry wanted the Amusement and Music Operators group to hire outside management to run the association and to secure a lobbying firm.

But those efforts didn’t work out, he said. So the video poker firms formed the new association.

In addition to Guidroz, the Louisiana Video Gaming Association’s board includes vice president Arthur Lawson, Metro Gaming and Amusement Co. Inc.; secretary/treasurer Dale Fremin, Delta Coin Machines Inc.; and members John Georges, Georges Enterprises; Nicky Nichols, Redman Gaming of Louisiana LLC; and Keith Saia, Algiers Music Co.

The association hired lobbyist Alton Ashy, Advances Strategies president, to direct all of its legislative matters and
The Tatman Group to provide association management services.