Kansas Star Casino Due Tax Refund of $19M

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The Kansas Star Casino in Mulvane, Kansas, has successfully appealed its property tax assessment, leading to a state court ruling that the casino was over-assessed. It is now owed more than $19 million in refunded property taxes.

This refund covers taxes overpaid since 2014. Boyd Gaming, the Las Vegas-based company that operates Kansas Star Casino, has been challenging the property’s assessed valuation annually since it opened in 2012.

The venue is one of dozens of casinos in Kansas, which collectively pull in around $400 million a year in revenues.

As well as property taxes to Sumner County, Kansas Star also pays gaming taxes to the State. In October 2023, this amounted to $2.8 million, which is 22% of the $12.8 million revenue the casino made that month.

Dispute Over Valuation

Kansas Star Casino features 1,300 slot machines, 43 table games, and since 2022, when the Kansas sports betting market launched, a FanDuel sportsbook.

Outside of gambling, Kansas Star also offers a Hampton Inn & Suites hotel with 300 guest rooms, three full-service restaurants, and the 3,400-seat Kansas Star Arena.

Put all of that together, and it plays a significant part in the local economy.

Initially, the Sumner County Assessor came to a total value for the casino of $225 million, which was later reduced to $175 million following an appeal.

However, Boyd Gaming contended that this valuation was still excessively high. It said that the true worth of the venue was approximately $75 million.

This difference in valuation led to ongoing legal challenges and disputes over property taxes, which have been costly for the county and the city of Mulvane.

Future Assessments Sorted

To resolve the matter, a settlement was reached that requires Sumner County and the City of Mulvane to return approximately $19 million to Boyd Gaming over a four-year period.

The settlement also involves an agreement to keep the casino’s assessment at $102 million for 2023 and at least the next four years.

In return, Boyd Gaming has agreed not to charge interest on the $19 million refund and has forfeited its right to appeal the $102 million assessment during the agreement period​​.

Financial Impacts

The property tax refund is expected to have a significant impact on the finances of Sumner County, the City of Mulvane, and the Mulvane School District, as they will split the tax return.

However, Mulvane City Manager Austin St. John looked at the silver lining in the news, in that the debate is now settled.

“It’s a positive in that we know what to expect. Instead of waiting for a judgment to come out, we know what we’re paying. We know for the next five years, we know our valuation is going to be correct,” St. John said.

The casino’s successful tax appeal and subsequent refund highlights the complex dynamics of property valuation and taxation in the gaming industry.

It is also not an insignificant win for operator Boyd Gaming. The Las Vegas-based operator posted Q3 2023 revenues of $900 million, with adjusted earnings of $137.7 million. For Boyd, a $20 million tax refund is not chump change, all things considered.

For comparison, consider leading U.S. casino operator MGM Resorts International. The fellow Las-Vegas based gambling giant reported $3.9 billion in revenue and $1.15 billion in adjusted revenues in Q3 2023 – during which time it lost $100 million to the fallout from a 10-day company-wide cyberattack. Most of that, however, was covered by insurance.

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