Casino Aztar gross revenue dipped last year

Thursday, October 2, 2003

JEFFERSON CITY, Mo. -- The gross earnings of Casino Aztar in Caruthersville during the last fiscal year slipped 6 percent from the previous year, according to the Missouri Gaming Commission's latest annual report on the industry.

During the fiscal year that ended June 30, Aztar generated $22.2 million before expenses, nearly $1.4 million less than the preceding year.

The weak economy in the Missouri Bootheel and areas of neighboring states from which Aztar attracts patrons contributed to the decline, which is likely to continue during the current fiscal year, said Gaming Commission executive director Kevin Mullally.

"That area has had pretty difficult economic times," Mullally said. "Their feeder markets have had a lot of job losses."

Aztar, which opened in April 1995, is the smallest of Missouri's 11 riverboat casinos. As such, it annually draws fewer patrons and generates less revenue than the other facilities.

Smallest operation

Although Aztar's payroll and employee-related costs rose roughly 1.1 percent to $7.4 million last year, it trimmed its work force by 25 jobs to 323 employees.

George Stadler, general manager of the Caruthersville casino, agreed the economy has been a major factor in the drop in business, with roughly 5,800 jobs eliminated within a 50-mile radius of Aztar. Stadler said the first expense impacted families cut is entertainment.

However, Stadler said elimination of Missouri's $500 per two-hour gambling session loss limit would greatly improve Aztar's financial outlook by putting it on a more even competitive footing with casinos in Metropolis, Ill., and Tunica, Miss. Missouri is the only state in the nation that has a loss limit.

"We think we could attract more out-of-state customers without that loss limit," Stadler said.

If the loss limit were removed, Stadler projected Aztar's gross revenue would increase by $3 million in the first year. Such growth would enable the company to substantially upgrade its facility.

In any event, Stadler said Aztar is committed to the Missouri market and continues to invest in its facility, including $1.5 million in capital improvements last year.

During the last legislative session, Democratic Gov. Bob Holden endorsed lifting the loss limit while increasing the tax rate on casino operators. His proposals made no progress in the Republican-led Missouri Legislature.

As it does every year, the latest Gaming Commission report says the loss limit costs Missouri casinos business, which in turn deprives the state of tax revenue.

Patrons of the state's casinos are required to fill out paperwork to obtain a player's card so the casino and state can track their losses and keeps of permanent record of their gambling activities. The report says many potential customers find the process distasteful and take their business elsewhere.

The report urges the legislature to repeal the statutory requirement that the commission annually evaluate the impact of the limit, saying it has become an exercise in redundancy. However, the report doesn't specifically ask lawmakers to remove the loss limit.

Appeal to legislature

"We just don't think the Gaming Commission has anything more to say on this subject," Mullally said. "The policy decision is in the hands of the General Assembly."

Overall, business was up at the state's casinos, which as a group posted $1.3 billion in gross receipts last year for nearly 7.7 percent growth.

The $363.4 million in tax and fee revenue the industry generated for state and local governments was up 6.8 percent. Aztar pumped almost $6 million in government coffers, a drop of 5.5 percent.

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