UPDATED: Proposed Cardroom Business Tax Defeated

#AdvocacyMatters The Silicon Valley Organization Cardroom Business Tax

Updated Aug. 7: After SVO voiced its opposition, the proposed cardroom business tax for the 2018 November ballot was defeated. It will potentially be back on for the 2020 Primary Election.

On behalf of The Silicon Valley Organization (The SVO), I am writing to voice our opposition to the proposed cardroom business tax increase, through a general election ballot measure on November 6th. By way of background, The SVO is the Silicon Valley’s premier business advocacy organization representing 1,400+ companies that employ nearly 300,000 workers and we represent our membership as the region’s largest Chamber of Commerce.

We are opposed to this industry-specific tax, without consideration of a deliberate and thoughtful stakeholder process with the business community in San Jose. The city staff proposal would include, but is not limited to:

• Increasing the existing 15% Cardroom Business Tax,

• Extending the business taxation to gross revenues of businesses providing thirdparty proposition player services (TPPPPS) in cardrooms, and;

The relationship between a cardroom and a TPPPPS business is negotiated in a contract for up to 2 years. Therefore, a sudden gross revenue tax on TPPPPS businesses would be destabilizing to that contractual relationship. We are concerned that the lack of business stakeholder outreach could have significant unintended consequences that could impact hundreds of jobs in San Jose. The best approach is to analyze gaming industry regulations and work with local cardrooms to develop a “win-win” tax proposal.

The SVO urges the Mayor and Council to reconsider council agenda item 3.10. Furthermore, we encourage the council to engage in a meaningful community stakeholder process, with adequate time allotted to introduce a fair tax structure that will both allow cardroom businesses to thrive and to ensure essential city services for residents.