Missouri Gambling Loss Limits, Proposition A (2008)

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The Missouri Gambling Loss Limits Act, also known as Proposition A, was on the November 4, 2008 ballot in Missouri as an initiated state statute, where it was approved.

The proposal provided new revenue to Missouri schools by increasing the state tax casinos pay to 21% and eliminating Missouri's $500 buy-in limit (often described as a "loss limit.") The limit was enacted in 1992 and prohibited a casino patron from buying more than $500 in chips or tokens during a two-hour period.

The initiative also generated new funds for early childhood programs and other state and local services from the $2-per-visitor excursion fee paid by casinos. It also limited the number of casinos in Missouri to those already built or under construction.[1][2][3]

Aftermath

In early January 2009, it was reported that casino money from Proposition that is supposed to go to Missouri's school funding formula could be diverted to other sources. According to the Associated Press, some lawmakers want to use the money to raise teacher salaries, others want it spent on gifted or special education programs. Funds from the projected $130 million dollars in new casino taxes, it is predicted, will be a matter of dispute in the Missouri State Legislature in 2009.[4]

In March 2009, the Missouri State Senate began discussing proposals to redistribute funds earned from the levy according to the established state funding formula.[5][6]

Election results

Missouri Proposition A (2008)
ResultVotesPercentage
Approveda Yes 1,578,674 56.17%
No1,231,89243.83%

Election results via: Missouri Secretary of State - Elections Division

Text of measure

The question on the ballot appeared as:[7]

Shall Missouri Law be amended to:
  • repeal the current individual maximum loss limit for gambling;
  • prohibit any future loss limits;
  • require identification to enter the gambling area only if necessary to establish that an individual is at least 21 years old;
  • restrict the number of casinos to those already built or being built;
  • increase the casino gambling tax from 20% to 21%;
  • create a new specific education fund from gambling tax proceeds generated as a result of this measure called the "Schools First Elementary and Secondary Education Improvement Fund;" and
  • require annual audits of this fund?

[8]

Official fiscal impact estimate

According to the official fiscal impact estimate prepared by the State Auditor:[7]

State governmental entities will receive an estimated $105.1 million to $130 million annually for elementary and secondary education and $5 million to $7 million annually for higher education, early childhood development, veterans, and other programs. Local governmental entities receiving gambling tax and fee revenue will receive an estimated $18.1 million to $19 million annually.

[8]

Fiscal impact studies by others

A study by supporters released in October provided new estimates of the potential statewide and local revenue and jobs benefits of Proposition A, the initiative that would update Missouri’s casino regulations and increase the taxes and fees paid by Missouri casinos. Among the key findings of the study:

  • When gaming taxes from the Lumiere Place and River City casinos are included in estimates, Prop A is expected to generate $126 million to $144 million per year for Missouri schools.
  • By attracting more casino visitors and revenues to Missouri, Prop A would generate $808.1 million to $923.8 million in new economic activity for the state, creating an additional 10,765 to 12,320 new jobs statewide.
  • Local home dock governments would receive an additional $14 million to $16 million per year in new casino tax and fee revenues to help fund local programs and services.[9]

The Missouri Department of Elementary and Secondary Education released a study in early October saying that if Proposition A passes, it will provide over $54 million to Missouri schools in the first year, when about half of the expected funding is phased in. These funds will increase funding for the majority of school of the state's 524 school districts.

About 115 of the state's wealthier "hold harmless" districts do not currently receive state funding under Missouri school funding "foundation formula." Most of these wealthier districts would not receive additional funding from Prop A in the first year of implementation, though a number of them would after the Prop A funding is fully phased in.

Supporters

The official campaign committee organized to support the initiative was the YES on A Coalition, formerly called the Yes for Schools First Coalition before the measure was designated as Proposition A. The group's website is www.YESonPropA.com. Members and supporters of the YES on A Coalition include teachers, other educators, civic and business leaders, and business, labor and community groups. Endorsers/supporters included:

  • Annie Malone Children & Family Service Center
  • Associated Industries of Missouri
  • Caruthersville Chamber of Commerce
  • City of St. Joseph
  • Clayton Chamber of Commerce
  • Graphic Communication Conference of the International Brotherhood of Teamsters Local #6505
  • Greater Kansas City Chamber of Commerce
  • Home Dock Cities of Missouri
  • Hotel and Lodging Association of Greater Kansas City
  • International Alliance of Theatrical Stage Employees Local #6 (Stagehands)

See List of Missouri Proposition A (2008) supporters

Arguments in favor of Prop A

Notable arguments made in favor of Proposition A included:

  • Supporters say on their website that Prop A will benefit schools and the economy, which they believe it will do by providing "over $100 million per year in new funds for schools statewide - without raising our property or income taxes."
  • Prop A will increase funding for education and other services by increasing the taxes and fees paid by Missouri casinos and updating Missouri’s casino regulations.
  • According to the supporter's website, Prop A will "generate millions in new funds for early childhood programs, college scholarships, veterans’ services, police and fire protection, and other state and local services from the $2 per visitor excursion fee casinos pay."
  • Daniel Mehan, the president and CEO of the Missouri Chamber of Commerce, says, "Proposition A will help us keep visitors, jobs and revenues here in Missouri. Voting YES is important for our schools and for our economy."
  • According to Ida Goodwin Woolfolk, a retired educator, "Proposition A protects local jobs and revenues while providing additional funds for our schools and communities. That benefits our citizens, our communities and our state."
  • "Missouri casinos provide over 12,000 local jobs, draw 25 million visitors annually, and generate hundreds of millions of dollars in economic activity for our state each year. Now, these economic benefits are threatened by growing competition from casinos in neighboring states – including new resort casinos planned in Kansas," according to Prop. A's website.
  • The current $500 "loss limit" regulations are outdated, complicated and do not exist in any other state. Getting rid of them will allow Missouri to compete for casino visitors on an equal basis with other states, with benefits to school revenues, jobs, tourism and other economic benefits casinos can provide.

Newspapers endorsing a "yes" vote on Prop A

  • St. Louis American said, "We want to bring existing and Missouri casinos being built into line with its competitors in nearby states, which means more State revenues, expanded employment, more construction and procurement spending, and an opportunity for developing languishing land on St. Louis’ underdeveloped Downtown riverfront area. We strongly endorse a vote of YES ON PROPOSITION A."[10]
  • Kansas City Business Journal said, "Deal all casinos a fair hand...Casinos continue to attract steady streams (811,400 customers, good for $54.4 million in revenue for the area casinos during an awful September), state and local governments have benefited greatly from hundreds of millions in taxes the casinos pay — and all without the rampant crime and bankruptcies that detractors predicted.[10]
  • Odessan said, "YES on Proposition A...Proposition A, if passed, will have a direct positive impact on school districts in Lafayette County.[10]
  • Sedalia Democrat said, "Adopt Proposition A...voters on Nov. 4 can provide more money for schools without paying a dime. Proposition A would remove the $500 "loss limit" on casino gambling and raise the state casino tax from 20 percent to 21 percent. This additional tax would provide $105 million to $130 million each year to schools for kindergarten through 12th grade."[10]
  • St. Joseph News said, "Prop A boosts schools...This proposal will mean more money for schools in Missouri...The state constitution requires this money be used for public education. And the ballot measure prohibits using new casino tax revenues to replace current education funding. An annual audit would ensure this is the case."[10]
  • St. Louis Business Journal said, "School districts aren’t the only ones that stand to gain from the repeal. City governments, as well as higher education and various other government programs could see more money...According to Office of Administration division of Budget and Planning, local governments of home cities and counties collectively could receive about $18 million in additional funding in the first full year after loss-limit repeal."[10]
  • Sikeston Standard Democrat said, "the practical impact of this ballot measure is enormous. The Missouri State Auditor estimates the ballot measure could generate up to $130 million annually for elementary and secondary schools, $7 million for higher education and $19 million for local governments where the casinos are located. Those are big bucks and they are needed instead of yet another tax increase."[10]

Donors

Through October 23, casino interests had contributed $15 million to the campaign to pass the ballot measure.[11]

Donors included:

  • Ameristar Casinos, $1.78 million.
  • Pinnacle Entertainment, $4.4 million.[12][13]
  • Missouri Gaming Association, $13,000.

According to the St. Louis Tribune, "Both companies have a lot riding on the measure. They each have invested heavily in large casino-hotel properties in Missouri in recent years and say the card requirement and $500-per-two-hours cap on losses keeps high rollers out of Missouri casinos and prevents St. Louis from becoming a gaming tourist destination."

Supporters from both sides of the state also claim that it would protect gaming jobs in Missouri by keeping a customer base that could be lost to other casinos and casino proposals across the state lines in Kansas and Illinois.

Campaign consultants

Consultants hired by the "Yes for Schools First" coalition include:

Opposition

News reports show that the largest contributions to the campaign against Prop A came from owners of the Illinois casino, the Casino Queen.[16]

Proposition A was opposed by both major candidates for governor, Republican Kenny Hulshof and Democrat Jay Nixon.

Groups that organized to oppose Proposition A included Casino Watch, a Missouri-based anti-gambling lobbying group, and developers who want to build new casinos in Missouri.[17][18]

A casino group based in Illinois was also contributing funds to defeat the measure, in ways that include paying for robocalls to voters on the east side of the state urging a "no" vote. Journalists suggested that the motivation for the Illinois casino company to take this step is its fear that it would lose business if Proposition A passed and allowed Missouri casinos to compete with Illinois casinos on an equal basis, by repealing Missouri's $500 "loss limit."[19]

Arguments against Prop A

Notable arguments made against Proposition A included:

  • It could open the state to a new round of legal challenges against Missouri's school funding method: "With this (initiative) petition, it appears to me adequate funding would be based not only on how much the accredited schools have spent on their education, but also on how much people lose at the gambling boat, which I don't think the court would find as a rational basis for funding," according to Sen. Rob Mayer, R-Dexter.
  • The measure uses schools to gain approval of law that primarily would benefit the state’s casino industry, according to some school superintendents.[20]
  • Proposition A "is an attempt to 'logroll' voters by getting them to approve the casino provisions because they like some parts, even though they likely oppose others."[21]
  • Because Prop A limits casinos to those already built or being built, it prevents future planning and local input to determine where to put casinos to do the most good for local communities. "This means they should be allowed off the rivers, either in thriving and booming areas like Rockaway Beach near Branson, Missouri; or in economically depressed areas, like inner cities or the Bannister Mall; where they can produce more jobs, more economic development, and more tax revenues for all levels of government."[22]
  • Since the addictive allure to gamblers can be so intense, "the costs to gamblers far outweigh the benefits."[23]
  • "States like Illinois, Indiana, New Jersey and Nevada who have no limit on losses experience far more crime related to gambling than we do. Drug dealers can launder money at casinos in every state except Missouri."[24]

Newspapers endorsing a "no" vote on Prop A

  • Columbia Daily Tribune said, "...the education money promise is false."[25]
  • Kansas City Star said, "A 'no' vote will keep Missouri’s well-advised law intact, and could provide impetus for state lawmakers to do the right thing for education without potentially increasing crime and adding to the misery that gambling brings to some families."[26]
  • St. Louis Post-Dispatch said, "There is nothing painless about the human cost of gambling...The loss limit is a safety net protecting compulsive gamblers from their own folly."[27]
  • Southeast Missourian said, "overall the plan is too restrictive and imposes limits that would best be left to the deliberative process of state legislation."[28]

Lawsuits

On Aug. 14, 2008, a businessman who wants to build a casino in Cape Girardeau and a Jackson County politician who wants a casino built in Sugar Creek filed a lawsuit to try to keep Proposition A off the Nov. 4 ballot, because they oppose the measure's limit on casino licenses.

It is one of two lawsuits filed against the measure in Cole County Circuit Court. The second lawsuit was filed on behalf of two St. Louis-area residents and is backed by Casino Watch, a group that has consistently opposed legalized gambling in Missouri.[29]

Judge rejects legal challenge

Cole County judge Richard Callahan ruled on October 22 that the Proposition A does not violate Missouri's single-subject rule, as the suit had claimed.

Evelio Silvera of Casino Watch, one of the groups who filed the lawsuit, said they are considering an appeal.[30]

Path to the ballot

Supporters filed petition signatures on May 4, 2008, the final deadline for submittal.[2]

Opponents filed a lawsuit against the ballot language of this measure, calling it "misleading," but a judge found the language to be legal in July 2008.

Ameristar Casinos and Pinnacle Entertainment, the initiative's biggest supporters, recently poured another $500,000 into the measure.[12]

As of August 6, 2008, the Secretary of State has approved this measure for the November ballot.[31]

See also

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Suggest a link

External links

Additional reading

References

  1. Biggest primary winner? Gambling interests
  2. 2.0 2.1 St. Louis Post-Dispatch: "Four groups make deadline to file initiative petitions," May 5, 2008
  3. Repealing casino loss limits will be on November ballot (dead link)
  4. KSPR-ABC/TV, "Missouri's Casino revenue could be detoured," January 1, 2009
  5. Joplin Globe, "Missouri: Lawmakers propose diverting new gambling money," March 11, 2009
  6. KOMU, "Casino Money May Go to Schools," September 21, 2010 (dead link)
  7. 7.0 7.1 Missouri Secretary of State, "2008 Ballot measures," accessed May 21, 2014
  8. 8.0 8.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  9. Yes for Schools First, "Study Provides Updated and New Estimates of Statewide and Local Economic Benefits of Prop A," October 6, 2008
  10. 10.0 10.1 10.2 10.3 10.4 10.5 10.6 Yes for Schools First, "Newsroom"
  11. Kansas City Star, "Proposition A seeks to eliminate loss limits at casinos" (dead link)
  12. 12.0 12.1 Business News, "Ameristar, Pinnacle spend $500K on loss-limits push," July 16, 2008
  13. The Turner Report, "Casino spends $2.6 million on Proposition A"
  14. Campaign finance filings, Missouri Ethics Commission (dead link)
  15. FOR SCHOOLS FIRST COALITION Expenditure details
  16. Kansas City Star (dead link)
  17. "Cape mayor asks for denial of casino ballot measure," Southeast Missourian, July 25, 2008
  18. Associated Press, "Groups created to oppose casino measure," October 3, 2008 (dead link)
  19. Kansas City Star, "East. St. Louis casino donates $150,000 to group opposing Prop A," November 2, 2008 (dead link)
  20. Joplin Globe, "Local superintendents say gambling proposal carries deceptions," October 3, 2008
  21. Forbes, "Critics: Mo. casino measure will 'log roll' voters," October 16, 2008 (dead link)
  22. KC Tribune, "The Statewide Ballot Propositions," October 17, 2008
  23. Missourian, "Ballot measure would eliminate gamblers' loss limits," October 26, 2008
  24. St. Louis Business Journal, "Keep the loss limit," July 18, 2008
  25. Columbia Tribune, "Down-ballot items," October 28, 2008 (dead link)
  26. Kansas City Star, "Expanded gambling in Missouri is a bad idea" (dead link)
  27. St. Louis Post-Dispatch, "No on Proposition A" (dead link)
  28. Southeast Missourian, "Proposition A is too confusing"
  29. Southeast Missourian: "Two lawsuits challenging casino ballot measure," Aug. 15, 2008
  30. Associated Press, "Judge rejects lawsuit against Missouri casino measure," October 23, 2008
  31. KansasCity.com: "Missouri to vote on loss limits for gamblers," Kansas City Star, August 6, 2008 (dead link)