RSS FeedMO to lose loss limits?
Right now, Missouri won’t let you lose more than $500 in its casinos in any single two-hour period, and you’ve got to swipe your player card to get “on board.” But that might change this election year, according to Forbes:
Supporters say it doesn’t matter that the gambling industry wrote and bankrolled the promotion of Missouri’s Proposition A, a measure that would erase the nations only casino loss limit and get rid of what some see as intrusive identification cards.
What does matter, they say, is that the "Schools First Elementary and Secondary Education Funding Initiative" would bring in more than $100 million a year in additional revenue for schools and millions more for the state and communities where the casinos operate - all without raising taxes.
And they warn that rejection of the measure would mean a loss of nearly $50 million a year in taxes and admission fees because of new casinos in Kansas, and possibly cause some people to lose their jobs.
"If it fails, Missouri will continue to be at a competitive disadvantage with our neighboring states," said Scott Charton, spokesman for the Yes on A Coalition. "We will continue to lose revenue to those states, and the loss will increase dramatically. Up to $200 million annually will flow from Missouri to Kansas if nothing is changed in Missouri law."
I love, love, LOVE the name of that referendum: “Schools First Elementary and Secondary Education Funding Initiative.” How could anyone be so evil as to vote against funding elementary schools without raising their own taxes? The ref proponents have done a masterful job of positioning the debate here.
Let’s face it, it beats the honest alternative; “The Casinos Want to Make More Money, and the State Will Get A Bigger Cut, So Why Not Drop the Loss Limits Initiative.”
And before I get any guff from industry folks who protest that the casinos aren’t looking to make more money, please. I hope for the sake of their shareholders that every casino in Missouri is trying to increase their profits. If they want to make the state a better place, let the execs do volunteer work in their off hours. But don’t try to spin this as an “education first” thing–it’s clearly about the casinos wanting to drop an onerous burden that will put them at a severe disadvantage once the Kansas casinos come online. And there’s nothing wrong with that.
Posted in business of gambling
October 2nd, 2008 at 2:58 pm
Of course they want to make more money but more importantly they want to get this referendum passed. And if spinning the name of the initiative to indicate what the public gets out of it instead of what the casinos get out if it works, why not? And you fail to mention that along with the elimination of the loss limits comes a tax increase. So it actually is a wash when it comes to increase profits. What they want to happen is for gamblers to not have to think about a loss limit when considering going to a Missouri casino and opt to attend an Illinois or Kansas casino.
October 2nd, 2008 at 3:17 pm
Their primary motivation has got to be their own bottom line, not the secondary benefit to education. Even with a 1 percent tax increase, waiving the loss limit could significantly help casinos and, as you mention, help them compete against other states. If it was a wash, I don’t think they’d want to take on the hassle of dealing with more money: they clearly see some profit potential.
Let’s assume an annual casino revenue of $1.5 billion (close to the 2007 total). Of that, $300 million (20%) goes to taxes. Raising the tax rate to 21% would up that to $315 million out of $1.5 b, so if the casinos can increase their revenues by more than $1.25 million each month (statewide) without loss limits, they’ll be ahead.
With 13 licenses, that means each casino has to make an additional $100,000 a month (or so) to make this profitable–which I think is certainly possible.