PJ Pockets Casino closes | City cut gambling tax in 2010

PJ Pockets Casino, located at South 324th Street and Pacific Highway in Federal Way, closed Jan. 31. - Andy Hobbs/Federal Way Mirror
PJ Pockets Casino, located at South 324th Street and Pacific Highway in Federal Way, closed Jan. 31.
— image credit: Andy Hobbs/Federal Way Mirror

PJ Pockets Casino has closed again, this time for good.

The casino, located at South 324th Street and Pacific Highway, shut down Jan. 31. A woman speaking on behalf of the casino said a lack of business and customers led to the closure. The casino employed about 100 people.

PJ Pockets had closed for five months in 2010. Casino management blamed a lagging economy and a high local gambling tax.

In response, the Federal Way City Council voted unanimously to cut the city's gambling tax in half — from 20 percent of gross gambling receipts to 10 percent. As the city's only "card room" establishment, PJ Pockets contributed nearly $840,000 of the city's gambling tax revenues ($1.1 million) in 2009. With Federal Way standing to lose about $420,000 per year, cutting the gambling tax was seen as the best way to keep some of the revenue, rather than lose it all. In addition to reducing the tax on card rooms, the council voted unanimously to lower the tax on pull tabs from 5 percent to 3 percent.

After finalizing a new lease with its property landlord, PJ Pockets reopened in October 2010. However, business was slow for the casino, especially during the past five months, according to one former employee.

At one time, Federal Way had five card rooms, and city leaders worried about the venues' clientele breaking the law. In 1998, the city's gambling tax ordinance was raised from 11 to 20 percent, the maximum allowed per state law. The measure was taken to halt the proliferation of gambling activities and establishments.

The average tax for similar card rooms is about 9.9 percent, according to the Washington State Gambling Commission. Most neighboring cities have card room tax rates around 10 and 11 percent.


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