Mo. gambling revenue expected to fall short of projections by at least $70 million

JEFFERSON CITY, Mo. -- New revenue from a voter-approved casino ballot measure could fall at least $70 million short of projections, the director of the Missouri Gaming Commission said Monday.

Voters in November approved a measure repealing Missouri's limit on how much gamblers could lose within two hours and increasing the tax rate on casino revenues. The Gaming Commission had projected the changes would result in $100 million to $130 million in new revenue for the state.

Gaming Commission executive director Gene McNary said Monday that based on revenues through April, the state's proceeds from casinos likely would increase by just $30 million this year.

Despite the shortfall, McNary told the committee that Missouri's casinos are still doing well compared with those in other states.

"We're the only ones that are making any money on this at all," he said. "All the other states are in the red."

McNary said he expects new casino tax revenues to meet earlier projections when the economy improves.

"Even people with enough money to spend are fearful," he said. "They've cut back on spending."

Regardless of the actual amount of new gaming revenue, all of it would be directed toward public schools under the terms of the ballot measure.

Lawmakers have said they need to tweak the wording of the gambling initiative because Missouri's formula for distributing education funds would prevent 115 of the state's 524 school districts from receiving the additional gambling revenue.

The Senate has endorsed removing a cap on how much the education funding formula can grow each year, which is expected to result in a $40 million increase for K-12 public schools.

Schools also would receive a boost for educating gifted students. Originally pegged at $10 million, education officials now estimate that provision could direct up to $50 million to schools.

The potential $90 million annual price could outstrip gambling revenues, at least until gamblers spend enough to meet the Gaming Commission's projection.

Senators have said they might decrease how many students a school can count as gifted, reducing the cost to the state.