So this is what they get for three decades of being the hosts of Missouri’s casinos—a financial knife in the ribs.
For three decades, ten percent of the casino gambling taxes have gone to the home dock cities and half of the admission fees, too, to pay for the police and fire protection, the infrastructure the cities provide so people can go to and from their casinos, use their bathrooms, and drink city water instead of some of the river water under the ‘excursion boat” where they gamble.
The cities have used some of that money for other improvements—parks, for example.
But not with Amendment 2, the sports wagering proposal on the November ballot.
They’re cut out of it. Completely.
None of the sports gambling taxes will go to the home dock cities.
There will still be an admission fee charged for those who go into the casinos to place their sports bets. But Winning for Missouri, the committee that is, shall we say, gloriously overstating the public benefits of sports wagering, has an economic study saying that, eventually, more than 98% of the bets will be placed online. There will be no admission fee paid by the casinos for almost all of the sports bets. And there is no fee in lieu of the admission fee. They’re going to keep it all.
None of the sports gaming revenue will go to the cities, as it does for present casino table games and slot machines. Admission fees going to host cities will be minimal.
Once again, everybody loses except the casinos and the sports teams—including the host cities (the formal name is Home Dock Cities, harkening back to the days when the industry convinced voters there would be real boats traveling on our big rivers, before they became boats in moats—which is a good thing; we might tell that story in a later entry).
The host cities have been getting the short end of the stick for all of these three decades. For more than a decade, fewer and fewer people have been going to the casinos. At their peak, casinos counted about 54-million admissions. In the last fiscal year, the admissions continued their decline toward 27 million.
Adding insult to injury is the industry’s refusal to let the legislature increase the admission fees so those home communities admission payments could keep up with inflation. The equivalent of two-dollar admission fee established in 1993 was $4.31 when we checked the Bureau of Labor Statistics calculator Saturday night.
Yes, we mean “let the legislature increase the admission fees.” Your faithful correspondent has suggested increases to legislators for six years. One of the more frequent responses is, “The casino industry would never buy that.”
The suspicion in the hallways for some time that the industry is, in one way or another, buying something. It has several political action committees with bottomless checking accounts. And legislators have to run for re-election for an unfortunately limited number of times.
The influence of the casinos is so ingrained in the legislative process that their representatives don’t even try to justify their statutory or constitutional demands. They just make brief statements about how great sports wagering will be and then sit down.
Not making any accusations, mind you. We’re just sayin,’ as the colloquial phrase goes.
Anyway—the $4.31 equivalency means the state is getting two 1993 dollars while the casinos keep $2.31 of 2024 money.
The casinos are making more off the admission fee than the state and the home dock cities are making. But the situation is even worse than what we’ve just shown.
Inflation has reduced the purchasing power of those two dollars to about 95 cents. So, while the home dock cities and the gaming commission are starving for funding with two dollars that are worth 95 cents in contemporary money, the casinos are making $2.31, and the gap between what the casinos keep and what the state and the home dock cities receive widens each year.
Our extensive research and hours with the calculator indicate the home dock cities and the State of Missouri, since the first casinos opened in 1994, have lost almost $1.9 billion ($1,880,392,926) in outright cash payments and in purchasing power combined because the casinos have pressured the legislature into making no change.
Extensive research has calculated how much each of our thirteen cities has lost in the last eight years or so. The individual tables are available but we don’t want to spend the space here to print them. Perhaps that can be done at another time.
Has anyone told our thirteen cities they’re being taken for a ride by their “excursion gambling boats?” The cities are part of the Home Dock Cities Association that one might think would be working to keep the losses from continuing and increasing. But we have seen representatives for the association spouting the casino line every time they’ve testified before legislative committees. It’s okay with the association, apparently, that the people they represent keep losing funding and will see no improvement from sports wagering.
The association says it favors the casino position because casinos are economic drivers for the region. Really? Can they show any studies that prove it? They haven’t, and the industry’s own statistics reported to the Missouri Gaming Commission show a different story.
We started compiling comprehensive statistics three years ago with a five-year lookback and we have updated figures from the Gaming Commission’s annual and monthly reports. In the now-eight years of statistics, these are the combined losses in cash admissions payments and lost value of those payments for each of our casinos:
- Ameristar St. Charles $46,399,739
- River City, Lemay $43,956,210
- Hollywood, Maryland Heights $42,069,051
- Horseshoe (form Lumiere Place), St. Louis $31,287,455
- Ameristar Kansas City $36,290,466
- Harrah’s NKC $29,250,328
- Argosy Riverside $27,274,214
- Bally’s KC $21,852,498
- IOC Boonville $13,568,851
- Century Cape Girardeau $12,712,770
- Century Caruthersville $7,200,880
- Jo Frontier $8,357,439
- Mark Twain, LaGrange $5,718,114
Amendment 2 will only increase those numbers.
Sports wagering backers say sports wagering will generate hundreds of millions of dollars that will make a big difference for the pay of our classroom teacher.
That isn’t true. As mentioned earlier, if voters approved Amendment 2, only a few million will be added to the $10-Billion dollar annual budgets of the elementary and secondary schools and the additional multi-million dollar budgets of our colleges and universities.
The industry has testified that increasing the admission fee to benefit our veterans would be a hardship on the industry, especially the smaller casinos. Bunk. It wasn’t but a few years ago when they paid $100 million a year, or more, for a decade and were not whining about the payments being an economic threat.
The industry has offered no statistical evidence to support its contentions. It has shown no independent studies proving any of the claims made in their advertising leading up to the vote in a few days on Amendment 2.
The industry can’t or won’t supply that information to support its promises and claims. But everything written in his series of posts is backed up by lengthy research.
Not only have the casinos fought efforts to maintain the value of the admission fee for their host cities, they have laid off about 5,500 of their employees since the number peaked at 11,658 in 2008. In the most recent fiscal year, the total was down to 6,079.
Will sports wagering bring back those jobs? Not with 98% of wagers made remotely. We can see a few more people serving drinks in the modest, at best, sportsbooks that will be created in our casinos to handle the few walk-ins. There might be a few runners taking bets to the I-T people—who might represent the biggest employee boost. But the jobs needle won’t move very much.
Let’s look at how much of an economic driver the casinos have caused in our five non-metropolitan areas, where one might suspect significant economic impact would produce community growth. Here are the population numbers for those communities, the census of 1990 first and the 2020 census next:
LaGrange 1,990-825
Caruthersville 7,389-5,562
Cape Girardeau 34,435-39,540
Boonville 7,095-7,969
St. Joseph 71,852-72,473
Five thousand jobs are gone. Limited population growth in some places or losses in others do not indicate casinos are causing their host cities to flourish. Admission Fees are dropping by the thousands, cutting funding for their host cities in half.
We mentioned in an earlier the industry’s claim that casinos “give back generously. Here’s the truth:
Casino “donations” or “contributions” to local causes are pennies on the dollar. Charitable giving during the last six fiscal years has averaged 0.000391% of their adjusted gross revenues. Their adjusted gross receipts have totaled almost $10.5 Billion in those years and their total charitable giving has been just $4.1 million. That’s less than pocket change. And most of those who read these entries give far more than four-ten thousandth of our personal revenues to charities each year.
Again, we have charted the “giving generously” figures for each casino for the last six fiscal years. But we don’t have room for the charts in this post. They are available, though.
A few years ago, casinos started reporting how much their customers left behind for charitable donations. We have spotted six times when the customers provided more than the casinos did.
And that’s just fine with the industry, which fights every effort to restore funding to the towns that welcomed the casinos as great economic boosts for the area. Maybe for a while they were— thirty years ago. But now?
The casinos also do not mention fees in Amendment 2, and for millions of reasons. The host cities have been getting the short end of the stick every year and it’s been getting worse for a long time. It is going to get even worse for host cities if sports wagering is approved next month.
I often wonder if the thirteen host cities ever get reports from their association or consider Missouri Gaming Commission annual reports that track how their fee income has fallen off a cliff and sports wagering will not save it.
Do not look for sports wagering to lead to reopened closed restaurants in our casinos. Not if only two percent of the sports bettors walk through the turnstiles. At one time, local restaurants feared the casinos would take away their business. Today there’s far less competition from the casinos for the restaurant business in many of our towns.
One final thing before we go today:
The sports wagering proposal the casinos want to adopt in this election could be the prototype for expanded remote wagering in all other forms of gambling. As walk-in traffic continues to dwindle, the casinos will be looking for more remote attachments to existing games. Some casinos already have stuck their toes in those waters in recent years with hybrid table games—blackjack and other games in which people who can’t find room at the gaming table go to a computer nearby to place their bets. The tests have not generated many dollars, relatively, but tests have been run. Don’t be surprised if the casinos come back to our lawmakers and ask for remote slot machines and table games—again paying much less tax than those games pay now. It’s a characteristic of business that stacks the cards only for itself.
(We stayed at a casino hotel a few weeks ago and went to the breakfast bar where we placed an order and were given a tag for our table. A few minutes later, a robot playing a catchy tune, came around the corner, and came down the aisle to my table, my order on its tray. I took off the plate and the robot went back to the kitchen, trailing its little melody behind it. One nice thing, I suppose, is that I wasn’t given a choice of 15, 18, or 25 percent for a tip. I found myself wondering how soon there would be robots, not people, dealing the cards or spinning the wheel.)
There go more jobs.
Add the casino host cities to the list of those whose situations will get worse if Amendment 2 is approved with its sweetheart tax rate, its deductions and carryovers, and its reliance on customers who carry casinos in their pockets.
This kind of thing should be handled by our elected representatives and senators, not written by two industries who place profit over any services to the people of the state. But we have this proposal because our elected senators and representatives didn’t do their job. Voters are well-advised to give them another chance by defeating a proposal that enriches the casinos and the pro sports teams and impoverishes our educators, our veterans, and the casinos’ own host cities.
Vote for Amendment 2 if you want. But don’t do it if you think it will benefit anybody but the casinos and the sports teams, no matter what they tell you on the television or with misinformation you will find in your mailbox.
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