Major casino operators have demonstrated throughout the years that they can not only develop entire gambling empires and give them the chance to spread around the globe, but they could also provide support for major companies such as the electric vehicles manufacturer Tesla, Inc. According to the latest information coming from the company’s CEO Elon Musk himself, this year is forecasted to witness larger profit which would be further boosted by casino operators developing in the state of Nevada.
One of the revolutionary companies in the past several years has already managed to achieve many of its ambitious goals by relying on hard work and the support of other major companies willing to invest their capital in tax credits. The said credits are also known as tax incentives and they give their purchaser the right to invest in a particular company and potentially optimize its future development. Ever since 2015, the electric car manufacturer has been making a good use of the help provided by casino developers which have operation in the state of Nevada.
Back then it could be recalled that the headquartered in Palo Alto, California Tesla managed to sell as much as $20 million in transferable tax credits from the state of Nevada to casino developer and operator MGM Resorts. The year 2014 brought Tesla a tax incentive package amounting to a total of $1.3 billion granted by the authorities of Nevada and qualified as the biggest tax break in the state history. The incentive was issued for the construction of the company’s new lithium-ion battery factory called Gigafactory 1.
The factory is located in the Tahoe Reno Industrial Center near the community of Clark in Nevada. The grand opening of the said factory was held on 29th July 2016 and this was only the first of several factories to be developed. The positive side of the arrangement was soon witnessed since tax burden was significantly reduced with its help and the state would not have amassed the said taxes without the help of the existence of Gigafactory.
Electric Car Manufacturer Utilizes Nevada Casinos’ Potential
The battery factory itself is a collaboration between Tesla and Panasonic Energy Corp. and is expected to bring the local economy about $100 billion over the span of the following 20 years. Many of the companies which made a good use of the tax credits are major casino developers which are interested in the mutual improvement of state which comes with them.
As a result of the purchasing of the said tax credits which come at a reduced price for them, casino developers also reduce the amount of gambling taxes they have to pay to the state. This has always been one of the highly debated topics in the casino field, as gambling taxes are applied to all gambling operators and they have the potential to make or break their operation in the long run.
One-third of the overall tax revenue of the state is generated with the help of gambling taxes which in turn guarantees that Tesla’s profit rates would also see a beneficial boost. The said tax credits have also been utilized for the payments of gaming license fees which usually amount to thousands ans millions of dollars.
While casino developers lower their gaming taxes, Tesla utilizes the proceeds generated in an appropriate manner. The electric car manufacturer has the choice to either reduce its losses generated or to boost its profit. When it comes to the financial side of the arrangement, as much as $131 million in credits has been sold to casino operators which have facilities in Nevada, which is expected to increase in the foreseeable future.
Due to the profitability of the businesses, Tesla is also forecasted to become profitable towards the final months of 2018 which comes as great news for both investors and people working at the company. Such positive surge has the potential to compensate for the $710-million net loss posted at the end of Q1 2018 due to the production of Model 3 sedan, which would result in the company’s state of profitability.