Cape casino idea may have to wait
Saturday, June 14, 2008
David Knight never abandoned his dream of a riverboat casino that would spark a redevelopment of the Cape Girardeau riverfront north of Broadway.
And Knight, owner of Ole Hickory Pits, thought the idea was finally ready to move forward when he learned the Missouri Gaming Commission will hold a hurriedly arranged meeting next week to consider a moratorium on all new casinos applications.
Knight said Friday he had a meeting scheduled for Wednesday with David Welch, director of policy and legislative affairs for the commission. The meeting was to go over an application Knight was preparing to put a proposal before the commission at its regularly scheduled June 25 meeting.
"I've got a tiger by the tail," Knight said.
Knight intends to travel to Jefferson City on Monday and argue against the moratorium before the commission. The resolution the commission will consider would put off any consideration of new applications until November, when voters may see a ballot measure that would impose a permanent ban on new boats unless an existing casino goes out of business. The ballot measure, an initiative petition underwritten by $1.8 million from Ameristar and Pinnacle Entertainment, is being checked by local election officials to determine if enough signatures were gathered to qualify for the ballot.
Along with the permanent moratorium, the ballot measure would eliminate the $500 loss limit, increase the tax on casino profits to 21 percent from 20 percent and set up standards to make sure additional tax revenue is added to the state education budget instead of being used to replace other funds.
Knight publicly advocated for a Cape Girardeau casino in 1993. In April of that year, voters rejected the idea of a Cape Girardeau riverboat. The measure was sent to voters again in November 1993, and voters approved the idea. Boyd Gaming Corp. signed a contract with the city and purchased land along Main Street north of Broadway but was never able to secure a license.
Knight and his partner in the project, Jim Riley of Red Letter Communications, have quietly purchased the property and felt that the time was ripe for another try.
The area involved includes about 20 acres between the floodwall and Spanish Street from Sloan Creek to Broadway. The project would, along with the casino, include a high-rise hotel and an entertainment arena with seating for 4,000.
Knight said the push for a self-imposed moratorium came as a shock and is patently unfair to his effort.
"By the commission's actions regarding our application, the citizens of Missouri and Cape Girardeau will be deprived of millions of dollars in investments, gaming revenue to the state and city and well over 1,000 jobs in Cape Girardeau," Knight said.
By pushing for a moratorium now, Knight said the staff at the commission is acting as the protector, not the regulator, of the gambling companies. "The commission's actions siding with the casino industry has, at best, an appearance of partiality and impropriety," he said.
The decision to call the Monday meeting was not prompted by requests from the state's casino operators or the lawmakers who sponsored bills similar to the ballot measure, Welch said Friday. It was, instead, the result of staff discussions about the initiative and legislative actions.
"There became a feeling, with the amount of interest in new locations throughout the state of Missouri for new gaming that there was a need to consider how we would proceed with that in light of the referendum that was being proposed by voters," Welch said.
There are 11 casinos operating in Missouri. There is one, in South St. Louis County, under construction by Pinnacle Entertainment.
Of the operating casinos, eight are in the Kansas City or St. Louis areas, with other casinos in St. Joseph, Boonville, LaGrange and Caruthersville. A report on the economic effect of new casinos, prepared by two University of Missouri-St. Louis economists and presented to the commission in January, rated Cape Girardeau as the location likely to produce the most new revenue, additional casino visits and new casino patrons.
The report also detailed public surveys showing a majority of Missourians support keeping the loss limits.
Only one application is pending before the commission, for a casino in Sugar Creek, Mo., near Kansas City, Welch said. The moratorium, if approved by the commission, would apply to that application as well as any others that may be in the process of being prepared. The economic report considered the effect of new casinos in Jefferson City, Hermann, Mo., two Kansas City-area sites and three locations in St. Louis.
"What we are considering is a period of time to go through the election, when people will have a chance to decide," Welch said.
He would not predict whether the commission would adopt the resolution.
But the mere consideration of the resolution, as well as the initiative petition, have thwarted attempts to convince a company currently operating a Missouri boat to negotiate to join the Cape Girardeau project, Knight said. Finding a company already operating a Missouri casino would speed up the approval process because the gaming commission would not have to undertake the thorough investigation it requires for companies new to the state.
"They fight over these licenses and all of a sudden they are not talking to us," Knight said. "The silence was deafening."
335-6611, extension 126