Casinos in Gary, Indiana Withhold Tax Payments

Now Barden has decided to withhold the monthly payment due Gary.

Dan Barden, owner of the Majestic Star Casinos in Gary, Indiana, has had a troubled relationship with his host city in recent months. After speculating this winter about possibly relocating one of his licenses elsewhere in the state, Barden was met with resistance from city officials reluctant to lose revenue from the gambling spots. Threats of legal challenges to any attempt to move were made.

Now Barden has decided to withhold the monthly payment due Gary, claiming access roads the city promised have not been delivered, thereby breaching his contract with the city. Rather than pay the tax, which averages roughly $500,000 per month, Barden has opened an escrow account into which the funds have been deposited.

Last week Barden filed official complaints against the city and the Indiana Gaming Commission with both the American Arbitration Association and the Marion County Circuit Court. He wants Gary ordered to build the roads with the escrowed revenue.

Mayor Rudy Clay of Gary stated that the city was having a rough time financially already, and that Barden's move puts Gary in a "major financial dilemma."

Barden's decisions here certainly contain an element of payback. Perhaps, if the casinos are as important to Gary as they seem, the city needs to be a good partner and spend a little of the revenue helping the casino stay profitable. After all, investing in the business will only help raise tax income for the future, and might convince Barden he is a cherished resident, rather than a prisoner.  The first lesson of casino relations for areas deriving revenue should be: always treat the golden goose with respect.