Gamblers, casinos wary of proposed tax hikes

BOONVILLE, Mo. -- Gamblers at the Isle of Capris riverboat here say they have a pretty good idea who would end up paying the higher gambling taxes proposed by Gov. Bob Holden.

"Somebody's going to pay for it, and it's not going to be the casino bigwigs," said Joyce Szemplenski, shaking her head while she paused for a cigarette break.

During Wednesday's State of the State address, Holden outlined a proposal to increase the $2 boat admission fee by $1, remove the $500 loss limit and increase the receipt tax on boats from 20 percent to 22 percent. The measures are expected to raise $156.5 million, which Holden says he wants to put toward fully funding the state's foundation formula for public schools.

Casino Manager Jeff King is depending on customers like Szemplenski to make the argument for him that the industry shouldn't endure a tax hike.

Glancing frequently at talking points from the Missouri Riverboat Gaming Association, which lobbies for boat operators in the state, King warned that Mississippi-based Isle of Capri and other gambling companies would be less likely to invest in Missouri if lawmakers approve Holden's proposal.

"We're already one of the most heavily taxed gaming industries in the country," King said, referring to a Missouri Gaming Commission report that pegged the state's effective tax rate at 29.5 percent. The commission's report indicated Missouri's rate was second only to Illinois' 30.9 percent tax rate.

Passed on to consumers

If Holden's proposed increases go through, Missouri's effective state rate would soar to 35 or 36 percent, said Troy Stremming of the riverboat lobbying group.

Ultimately, King said, the extra taxes would be passed down to consumers, through decreased payouts and maybe even an admission fee paid by gamblers. Casinos pay the current admission fee.

Propped next to the Isle of Capri's trademark waterfall and plastic palm trees, Independence resident William Gregg fumed about the proposed increases.

"They expect casinos to pay for everything," said Gregg, a retired construction worker who gambles weekly.

Thursday was "50 plus" day at the casino, and seniors who gambled received "double points" toward food and merchandise.

"These are not the people who should be paying for our recession," Gregg said.