NEW CUMBERLAND-Hancock County's lawsuit against Mountaineer Casino, Racetrack & Resort over the hotel occupancy tax can proceed now that a judge has struck down the casino's motion to dismiss the case.
Hancock County Circuit Court Judge Ronald Wilson, in a decision filed earlier this week, denied Mountaineer's motion to dismiss, saying the casino had not established that it was "entitled to judgment as a matter of law."
"The court finds no basis for granting a dismissal," Wilson said in the one-page opinion.
Mountaineer's motion, which did not address the merits of the case, asked for dismissal on the grounds that Hancock County failed to state a legal claim under which relief could be granted.
"Obviously, we're happy with Judge Wilson's decision, and the case will proceed accordingly," said Weirton attorney Daniel J. Guida, who is representing Hancock County. "Ultimately, the issue will be given to Judge Wilson to decide it on the merits."
Hancock County is suing Mountaineer over the casino's practice of not collecting the 6 percent hotel occupancy tax on complimentary rooms-rooms occupied for free by patrons who have earned enough rewards.
Then-Sheriff Mike White filed suit in September 2012 on behalf of Hancock County commissioners after months of discussion about the hotel occupancy tax. Current Sheriff Ralph Fletcher is now listed as the plaintiff.
Commissioners contend that Mountaineer's practice of not collecting the tax on "comped" rooms has cost the county more than $500,000 in lost tax revenue since March 2009. The county's lawsuit asks for a declaratory judgment in the amount of $600,000 and any other compensatory damages permitted by law.
Revenues from the hotel occupancy tax are split evenly between county commissioners, who use it for parks and recreation purposes, and the Top of West Virginia Convention and Visitors Bureau.
Mountaineer spokeswoman Lesley Campbell declined to comment on Wilson's decision, saying, "We will allow our pleadings and exhibits to serve as our response at this time."
Mountaineer General Manager Chris Kern has previously said that it's not reasonable to charge a tax for free services. Like many casinos, Mountaineer offers free hotel rooms as an incentive to regular patrons. The casino's "IN Club" loyalty program allows patrons to accrue points based on past gaming that entitle them to, among other things, complimentary rooms.
"Simply put, six percent of nothing is nothing, and thus, no tax is now or ever has been due," Charleston attorney Alexander Macia said in Mountaineer's motion to dismiss. Macia did not return a phone call seeking comment.
But the county's lawsuit reasons that even though a room is complimentary, it is not free because the gaming patron has earned the room through some sort of reward system.
In his answer to Mountaineer's motion to dismiss, Guida asks the question, "Is a 'free' hotel room really 'free' when it cost you $3,000 to get it?" His answer, provided in Latin, translates, "There is no free lunch."
"That's really the case in a nutshell," Guida said.
Regardless of how Wilson decides the case, it probably will be appealed to the Supreme Court of Appeals of West Virginia, Guida said. "Make no mistake about it. ... There's just too much money at stake here," he said.