Big biz group backs loss limit repeal
The Missouri Chamber of Commerce and Industry has endorsed the gambling industry’s proposal to repeal the $500 loss limit, the last remnant of rules voters approved when they legalized riverboat gambling in 1992.
Dan Mehan, president and CEO of the chamber, says in a news release that the initiative “is important for schools and for our economy.” He says it will “keep visitors, jobs and revenues here in Missouri.”
Called the Schools First Initiative, the measure is expected to be on the November ballot. In addition to ditching the loss limit, it would increase gaming taxes to 21 percent, up from 20 percent.
State officials have estimated that the tax increase would generate between $105 million and $130 million for public schools.
Ameristar Casinos and Pinnacle Entertainment circulated petitions to get the initiative on the ballot. They are worried that new competition in Kansas will draw business from Missouri.
County clerks have been checking signatures on the initiative petitions. Secretary of State Robin Carnahan has until Aug. 5 to certify measures for the ballot.
Important for schools and our economy? Puhlease! In exchange for a tiny increase in the casino tax, incumbent casinos are going to get a perpetual ban on new competition written into law, and eliminate the loss limit. It’s amazing what a big budget campaign will buy these days.
As a resident of a city which isn’t eligible for a casino even under the current rules, I think the whole system is unfair. The Missouri Municipal League has ignored the interests of the vast majority of its members by remaining silent on this issue. Maryland Heights, home to Harrah’s, has a larger per capita municipal budget than Ladue. They have incredible public amenities, and are building a palace for their new municipal government center. Meanwhile, other cities across the state struggle to find a few bucks to fill potholes and pay cops. The only fair way to handle this is to spread casino revenue evenly across the state. Why should a few cities reap huge windfalls from an unfair state law?
Here is another great idea brought to you by the mortgage and financial industry, raise the loss limits at the casinos so that people have yet another way to “bet the farm”.
I know this might cause Nick cardiac arrest, but I am in agreement here. We cannot gamble our way to better schools and infrastructure.
The Missouri Chamber of Commerce and Industry supports higher taxes and eliminating free-market competition? The next thing you know, they’ll want every business in Missouri to only hire union employees.
And Ameristar and Pinnacle think that the solution to competition from Kansas is to increase the tax in Missouri and eliminate any new casinos anywhere in Missouri?
If gaming taxes were really going to increase funding for schools, the initiative petition needed to include a provision that the legislature cannot reduce the allocation of other general revenue funds from the education budget.
It always amazes me when people make claims and comments without doing their homework. Here are some facts to consider…
1) The Missouri state constitution already dedicates the state gaming tax paid by casinos to schools. The proposed ballot initiative increases that tax to 21% and eliminates Missouri’s unpopular “500 loss limit” regulations. These complicated regulations, which do not exist in any other state, cause Missouri to lose casino visitors and revenues to other states. Eliminating the loss limit red tape will allow Missouri to compete on a level playing field for casino visitors. That will protect and substantially increase Missouri casino revenues subject to the 21% tax. The official fiscal analysis by the Missouri State Auditor concluded that the Schools First Initiative will provide $105 to $130 million in new revenues each year for K-12 schools statewide.
2) Section 3.3 of the initiative does in fact specifically prohibit school revenues from casino taxes from being used to replace or supplant any other education funds.
3) The casino industry is not a “free market competition” type industry — except in Nevada. Every state that allows casinos — except Nevada — imposes some kind of limitation on the number or location of casinos. For example, Illinois law sets a limit of 10 riverboat casino licenses. Arkansas law limits casino gaming to two racetrack casinos. The new Kansas casino law sets a limit of 4 destination resort casinos and 3 racinos. Etc, etc. Indeed, only one state — Nevada — sets no limits on the proliferation of casinos. Nevada has over 260 casino and they pay the lowest state tax rate of any casinos in the country (6.75%). I doubt if most Missourians want Missouri to be like Nevada.
4) Most states recognize that having a limited number of casinos that pay relatively high tax rates to the state is a better model than Nevada’s, because it maximizes the economic and tax benefits to the state and is more acceptable to the majority of people — who don’t want casinos everywhere, like there are in Nevada.