Repeal of Mo. loss limits raises $22M for schools
Thursday, January 21, 2010
ST. LOUIS (AP) -- New figures from state gambling regulators show the end of loss limits at Missouri casinos has generated far less school funding than promised in a 2008 ballot initiative.
The statewide vote to end Missouri's unique $500 loss limit has bolstered the state's largest casinos and helped them weather a weak year for gambling across the country.
But so far, the end of loss limits has raised less than a quarter of the predicted new revenue for schools, the St. Louis Post-Dispatch reported for Tuesday's edition.
Some observers blame the recession, while others point to the state's imperfect school funding formula. Also, casino companies and state officials said Proposition A can't be judged on just one year, especially one as rocky as 2009.
Proponents of casino-backed initiative on the November 2008 ballot said ending the loss limit would generate at least $100 million a year in new tax revenue for schools.
Figures for 2009 out last week show Missouri's 12 casinos won $1.73 billion from gamblers, an increase of 3 percent from the previous year. A new higher tax rate translated that to an additional $22 million for Missouri schools.
"The impact has been virtually nothing on school districts," said Brent Gahn, spokesman for the Missouri School Boards Association.
Before the initiative, Missouri casinos had said the state's $500 loss limit and an identification card requirement sent Missouri gamblers to neighboring states.
The 2008 ballot question ended the loss limit and ID cards, capped licenses at 13 and increased gambling revenue taxes by 1 percentage point. Ameristar Casinos and Pinnacle Entertainment committed $15.5 million to the campaign and found support from business groups and Missouri teachers. The measure won 56 percent of the vote.
Casinos maintain the changes have made them more friendly to tourists and big gamblers and helped them ride out a weak economy. Through October, Missouri was one of just three states to see gambling revenue increase in 2009, according to the American Gaming Association.
Still, the increase was much less than expected.
The antigambling group, Casino Watch, said the earlier projections were an "attempt to trick Missourians" into thinking the measure would help schools.
"It's typical of what the casino industry does to win at the ballot box," said Mark Edwards, the group's chairman. "They will produce studies that show what they want to show."
Todd George, vice president at Pinnacle Entertainment, said the gaming industry also has been hurt by the recession.
"Without the revenues generated by Prop A, state education revenues would be even lower, possibly in the negative," George said. "We certainly hope that even $25 million additional dollars would be welcome."
Information from: St. Louis Post-Dispatch, http://www.stltoday.com