Lawmaker panel rejects removal of casino loss limits

JEFFERSON CITY, Mo. -- Lawmakers looking for ways to raise money for next year's underfunded state budget have rejected a proposal to repeal Missouri's unique loss limits for casino gamblers.

The same panel of lawmakers also shied away Monday from the idea of imposing a state sales tax on lottery tickets, after hearing concerns that lottery sales would suffer.

The legislature has passed an $18.9 billion budget for the 2003 fiscal year starting July 1. But Gov. Bob Holden says it is $167 million short of balancing.

House and Senate negotiators, trying to trying to settle on a plan to raise or all part of that money, had agreed by early Monday evening on measures estimated to generate $25 million -- mainly by providing a penalty-free period for the payment of overdue taxes.

Sen. James Mathewson, the lead sponsor of the revenue bill, said negotiators "are not getting anywhere."

"My daddy said any damn fool can spend money, but raising it's a son of a gun," said Mathewson, D-Sedalia.

The Senate previously had passed a bill raising less than $50 million, primarily by abolishing some tax incentives for businesses. But Senate support seemed to be eroding for some of those business measures.

The House, meanwhile, had revised the Senate bill to raise about $190 million through the business tax changes and higher casino taxes.

While seeking to resolve differences in the two versions, Mathewson proposed Monday to remove a state law limiting gamblers to a maximum of $500 worth of chips or tokens for each two-hour gambling session.

Only Missouri has limit

Missouri is the only state with such a limit, intended to discourage high-stakes gambling. Abolishing the limit would let casinos make more money, which would produce more state tax revenue.

Mathewson has proposed to combine the repeal of the loss limit with an increase in casino fees. Casinos currently pay $2 per patron for each two-hour gambling session. Mathewson's proposal would have changed that to a daily fee of $5 a person.

The two-pronged proposal would have raised nearly $90 million next year for the state, Mathewson said.

But it failed when just three of the 10 negotiators supported it.

Negotiators have yet to consider a House passed plan to raise casino income taxes and admission fees without repealing the loss limit.

Casino lobbyists and executives said they would oppose those efforts. Some casinos would struggle to survive if higher taxes were not offset with larger losses by gamblers, said Roger Archibald, a vice president for Argosy Riverside Casino near Kansas City.

"We're no different than any other business in the state of Missouri -- our profit margins are no different and we provide a lot of jobs," said Archibald, who added that the Argosy Riverside has about a 6 percent profit margin after existing taxes. "There's no reason you should impose new taxes."

Withered without vote

Also Monday, Sen. David Klarich, R-Clayton, suggested the state could raise money by imposing a sales tax on lottery games, which currently are untaxed.

But Klarich's proposal withered without a vote by negotiators after the director of the Missouri Lottery said the tax would actually cost the state money.

Director Jim Scroggins some existing lottery games would have been eliminated because tickets are issued by machines that take dollars and do not dispense change. A sales tax would have added several pennies to a $1 ticket, making it impractical to buy, he said.

Scroggins said no other state taxes lottery sales.

When the Canadian province of Saskatchewan imposed a 10 percent lottery sales tax in 1989, sales declined and the province had to rescind the tax, Scroggins said.

Revenue bill is SB1248 (Mathewson).