Missouri Senate Approves Loss Limit Repeal

Missouri’s limit of US$500 of losses in two hours per wagerer was introduced when riverboat gambling was authorized in 1992 in an attempt to combat problem gambling. Operators have cited the limit as putting them at a competitive disadvantage to casinos in neighbouring states and the Kansas move was foremost in the mind of Senate Majority Leader Charlie Shields who introduced the bill.

“I thought about the thousands of jobs at stake in the Kansas City area, I thought about the millions of dollars in state revenue that’s at stake, I thought about the missed opportunity that this body had several years ago when we sent the NASCAR track to the Kansas side,” said Shields, who also alluded to the fact that gambling taxes are hypothecated for higher education spending, “and I thought about the opportunity for thousands of kids to go to college.”

In order to placate opponents, Shields had to agree to increase the casino tax rate from 1 percent to 4.25 percent, a move that many operators would make small and medium sized casinos unviable. Wachovia Capital Markets gaming analyst Brian McGill said “A 4.25 percent tax is too high in exchange for removal of the loss limit,” while Ameristar Kansas City Casino and Hotel vice president Troy Stemming, speaking on behalf of the Missouri Gaming Association, said “It’s just a tax increase we can’t afford.”

The bill also expands the number of riverboat casino licenses from 13 to 16 but Shields admitted that bill was an unhealthy compromise “This is probably a deal where everybody walks away unhappy,” he said.
The bill is likely to face a legal challenge from gambling opponents who will probably seize on the fact that the loss limit was included on the ballot put to voters in 1992. Casino operators will also now almost certainly lobby for a reduction in the tax rate during the current legislative session and observers believe that if they fail they will attempt to kill the whole bill, loss limit repeal included, and lobby for a no strings reduction in the loss limit at a later date.