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OpinionAugust 2, 1995

Riverboat gaming is in its early development in Missouri and has been controversial at times, but the fact remains it has been financially beneficial to education. Riverboat gaming is funding the state's new school foundation formula with approximately $80 million dollars for fiscal year 1996. ...

Riverboat gaming is in its early development in Missouri and has been controversial at times, but the fact remains it has been financially beneficial to education. Riverboat gaming is funding the state's new school foundation formula with approximately $80 million dollars for fiscal year 1996. It is projected that total gaming proceeds will reach approximately $160 million fiscal year 1997, and all but about $7 million will be put into the foundation formula to fund our state's 541 school districts. This sum is a remarkable amount considering Missouri's $500 loss limit for individuals on each cruise on Missouri's riverboats.

The educational issue of desegregation has also been controversial at times. It is an enormous cost to the state's general revenue fund. Since 1981 Missouri has spent over $2 billion on desegregation costs to improve education in Kansas City and St. Louis. The time has come to consider bringing these two issues together for the full benefit of equal educational opportunities for our children. Lift the $500 loss limit per person per cruise on riverboat gaming and specifically use the additional money to help fund the state's share of desegregation costs. This could free up money in general revenue for other educational programs.

Some may argue that lifting the $500 loss limit would cause social or economic programs for those who would gamble and lose above this limit. However, there are plenty of ways to get around it if a person really wants to gamble above the current limits. Missouri is also losing out on people who want to wager larger sums. They can go to Las Vegas or Atlantic City or just across the border to Iowa or Illinois. Lifting the limit will give these individuals a reason to stay here. If they lose, at least their loss will go for better education here in Missouri and not in another state.

Missouri is the only state to have loss limits on riverboat gaming. Iowa did have a $200 loss limit but repealed it in May 1994 after it nearly collapsed its riverboat industry. Since the repeal, Iowa has made a remarkable comeback and is again competitive with Illinois and Missouri.

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Testimony has been given before the Missouri Gaming Commission that gaming proceeds could increase by as much as 35 percent if the loss limit were repealed. This amounts to an approximately $52 million annual increase in funds. A more conservative estimate, based upon Iowa, Mississippi, Illinois and Missouri riverboat gaming admissions, adjusted gross receipts and wins per admission puts the figure at an approximately $40 million increase in gaming revenues. This amount of money would not cover the total costs of paying the state's share of desegregation, but it certainly would help.

Another aspect of this approach could be helpful for cities who have riverboats and have a school system under a federal court order involving desegregation. Two cents of every dollar of adjusted gross receipts from riverboat gaming proceeds go to the home dock city where the riverboats are located. Such funds could be earmarked for the city's school system if it were under a federal court order.

Such ideas would have to be approved by the Missouri General Assembly or local governments in St. Louis or Kansas City before they could happen, but debate on these issues should happen. Such state or local earmarking of funds could lapse once court-ordered desegregation is completed.

Lifting the $500 loss limit should not be viewed as expanding riverboat gaming. Riverboat gaming is here to stay and regardless of one's view on riverboat gaming or desegregation, the future of education funding is intertwined in both. Desegregation may be phased out over time, but education will continue to cost. Now many be the right time to lift the $500 loss limit on riverboat gaming excursions in an effort to lift education dollars to a higher level for desegregation programs and lower the burden on the states general revenue fund. While no one should gamble their future away, the continued high cost of our children's education is something you can bet on.

Steven R. Carroll, a former Missouri legislator, is director of public affairs and legal counsel for Dorf & Stanton Communications, St. Louis.

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