Missouri Gaming Commission Chairman Mike Leara was no doubt relieved by last week’s Missouri Senate defeat of an omnibus gambling expansion bill.
The bill would have saddled the cash-poor commission with even more things to regulate.
Senator Denny Hoskins’ bill would have allowed slot machines at truck stops and veterans and fraternal organizations (there is a big disagreement whether video lottery terminals are slot machines that we are not going to get into). It also would have legalized betting on sports in casinos.
The gaming commission is largely funded by admission fees paid by casinos. One-half of the admission fees go to the commission and the other half stays with the thirteen host, or home-dock, cities. The bill did not address the problems caused by our long-outdated admission fee law.
The gaming commission had to cut more than two-dozen employees last year because the pandemic forced closure of our casinos for several weeks and admissions understandably lagged for the remaining months of the fiscal year. The commission also reduced funding for the Access Missouri scholarship program administered by the commission by twenty percent.
The commission’s position has been further weakened by an almost decade-long thirty percent decline in casino attendance, a drop from 54.3 million admissions in fiscal 2010-11 to 37.5-million in FY 2018-19, the last non-pandemic year. The pandemic year that ended last June 30 saw another drop of about ten million admissions, leading to the commission layoffs and reduction in the scholarship program. Admissions so far this year indicate another weak year for commission and home dock city income from casino patronage.
Pardon us while we get into some mathematics here:
The admission fee was set at two-dollars per person in 1993.
The commission, therefore, has been dealing for some time not only with declining income because of declining attendance but with declining value of the money it has collected in admission fees. Almost thirty years of inflation have reduced the purchasing power of fee income by about forty-five percent.
Those circumstances left the Missouri Gaming Commission with significantly reduced resources to regulate the casino industry, producing layoffs and taving Chairman Leara justifiably concerned about how well the commisison could regulate an entirely new form of gambling as well as regulate a large number of slot machines in veterans and fraternal organizations throughout the state.
The bill defeated by the Senate provided no protection against continued funding declines.
While the bill might have been seen by Leara as three lemons, it might be viewed somewhat differently by Missouri’s educators.
Other sports wagering bills in the last three years sought to tax sports wagering adjusted gross receipts at six to nine percent, far less than 21% rate on all other forms of gambling. The effect of those proposals would have been to lower the state’s commitment of gambling funds to public education by tens of millions of dollars yearly. None of the amendments proposed during floor debate sought to change the Hoskins bill’s provision taxing sports wagering proceeds in the same way all other forms of gaming are taxed, a good first step in making sure next year’s sports wagering legislation protects other state interests as well rather than undermining them.
The Missouri Gaming Commission, faced with the likely return of this legislation in the next session in some form, would do well to evaluate its present financial situation that is significantly worsened by outdated gaming laws and suggest ways the legislature can protect the ability of the commission to do its job by bringing laws adopted in the last decade of the Twentieth Century into the third decade of the Twenty-first. Sports wagering legislation would be a solid vehicle to accomplish that.