—and the places most damaged.
We’ve had three weeks or so to digest the results of the November 5 election. We are going to offer some insights in the next few entries.
One of the amendments we voted this month proposed something that we’ve seen before—a statewide vote to force a city or an area to allow something the people there did not want.
That was Amendment 5, which would have forced the people living and working at the Lake of the Ozarks to accept a commercial casino in their midst. Two areas of Missouri were involved: the area where a casino is proposed and an area fearful that it would be the next place forced to accept one.
We’re talking about the Lake of the Ozarks and Branson.
It might be instructive to see their thoughts about the sports wagering amendment and the casino-placement amendment. We looked at the votes in five lake counties and in five Branson-area counties.
Both groups wanted nothing to do with either proposal, sports wagering or a casino.
The five lake counties were 57% against sports wagering, Amendment 2, that barely passed statewide with only 50.074% of the votes (as of last night), a margin so small a recount can be justified if the losers want to pay for it. The five Branson-area counties opposed it to the tune of 60%.
Amendment 5 was the issue that was most stark in its possibilities for these two areas and the message sent by these ten counties was more than no. It pretty much amounted to a “Hell, No.” Camden County rejected the proposal 10,621-14,375. Taney County swamped it 9,875-16,071. Sixty percent of the voters in the five lake counties rejected the casino. In the Branson area, the rejection was even greater, 61.4%.
End result: People in those ten counties don’t like sports wagering but their people can do it if they want, but they’re sure don’t want them ever to do it in a local casino.
Both of these counties have promoted their areas as family-friendly tourism destinations. Branson was worried that a Lake of the Ozarks casino would be the precedent-setter for a casino campaign in Branson. Amendment 5 would have forced one area to accept something the voters clearly did not want, and exposed the other area to a similarly unwelcome intrusion later.
Branson had a taste of this issue twenty years ago when voters defeated a proposal to put a casino next to the White River at Rockaway Beach.
How about counties that have casinos? Amendment 3 failed in three of them—Cape Girardeau (46.4%), Lewis (Mark Twain Casino in LaGrange—46/7%), and Cooper (Boonville 48.5%).
This time, the casino industry spent ten-million dollars on a petition effort and an election campaign for Amendment 5. Their efforts netted them less than 48% of the statewide vote.
In St. Charles County, the home of Missouri’s most lucrative casino, Amendment 3 got only 53.4%.
The spending on the Lake of the Ozarks proposal was pocket change compared to the huge amount invested in the sports wagering amendment. It took $41 million from the two biggest internet bookies to overcome the $14 million dollar opposition campaign financed by another bookie. The victory margin was only (as of last night) 4,360 votes out of almost three million votes cast. The certified final results will be posted after the Missouri Board of Canvassers meets on December 10. Presidential electors meet a week later. Congress is to certify the federal results on January 6.
The casinos will get their money back pretty fast. The host cities of the casinos will lose millions because of the support their voters game to Amendment Two.
How much will they lose? There are two factors. The state tax rate on gambling (table games and slot machines is 21%. Host cities get ten percent of that amount. In the last fiscal year, ten percent of the state gaming taxes collected provided $39,711,780 to the host cities.
But sports wagering will provide ZERO money from the state gaming tax, which will be only ten percent to begin with. The State Auditor estimates casino revenues in the first five years will be $1,044,684,612. The states ten percent will amount to $104,467,878, all of it earmarked for higher and lower education. None of it goes to the home cities. None.
If Amendment 2 followed current law, the casinos’ own home dock cities would split an additional $10,446,788.
But it’s worse than that. If the tax rate on sports wagering were the same as it is on other forms of gambling—and the industry has never given a consistent answer why is should not be—the home dock cities would have split an additional $21,938,377 in those first five years.
The casino industry will recover more than one-half of the money it spent on the campaign by giving their own host cities the shaft. Permanently.
I can show you the math; the casinos wouldn’t.
The manifest shortcomings in taxes can only be remedied by adoption of another amendment. A campaign that focuses on those shortcomings and either corrects or overturns Amendment 2 might be considered, given the paper-thin margin of victory for sports wagering. It would be interesting to know the reactions of city councils in the thirteen host cities if they are ever shown these numbers. I doubt the industry, its leaders, or its supporting organizations have ever given these figures to the cities
The casino industry has never been put on the defensive at the Capitol or at the ballot box.
And maybe it should be, as we will discuss in our next commentary because what could be coming will be only worse.