State senate mulls legislation to limit construction of new casinos

A 1 percent tax increase would bring $100 million in additional revenue for state education, but loss limits remain controversial
Tuesday, February 19, 2008 | 11:10 a.m. CST; updated 10:04 p.m. CDT, Friday, July 18, 2008

JEFFERSON CITY — A Senate panel on Monday considered legislation to prohibit new casinos, increase the taxes on existing ones and repeal a limit on how much gamblers can lose: $500 every two hours.

The measure would prevent casinos where one isn’t already operating or under construction while adding a 1 percent tax on revenues above $40 million.

That’s estimated to bring in more than $100 million annually, which would be spread mostly through several state education funds. The first $25 million would go to expand the A+ Schools program to all the state’s high schools. Currently that scholarship program covers tuition and some textbook costs at community colleges for students who graduate from certain high schools.

The remainder would go to the Early Childhood Development, Education and Care Fund and the First Steps program. The state Veterans Commission Capital Improvement Fund would also get an extra $4 million.

Missouri is the only state that limits to $500 how much a gambler can lose in a two-hour period.

The Senate last year considered a similar bill to repeal the loss limits, but critics balked at that and increased the proposed new tax to kill the bill. The money would have gone to a statewide college scholarship program.

This year’s sponsor, Sen. Scott Rupp, , R-Wentzville, said the loss limits don’t make sense and are often circumvented because the problem gamblers who need protection bet too little to trigger the cap.

“Loss limits are no longer serving their purpose and they need to be removed,” Rupp said.

Plus, Missouri casinos are likely to face intense competition now that Kansas has approved a law allowing gambling, Rupp said. Rupp estimates that 40 percent of the gamblers in Missouri casinos live in Kansas. And the state Gaming Commission estimates that 30 percent of gambling Missourians go to other states because of the loss limits and a requirement that gamblers show identification.

Critics of the measure said loss limits help the families of problem gamblers as much those who struggle to control their wagering and were part of the deal in getting Missourians to allow casinos.

“For a family back home that has a problem gambler, it saves the bank account, it prevents the loss of the house,” said Mark Andrews, the chairman for antigambling group Casino Watch.

Another critic, Kerry Messer with the Missouri Baptist Convention, said it’s OK to put burdens on an industry when there’s a reason. Messer likened the loss limits to a law that makes pharmacists keep a log of people who buy certain cold medications because they can be used to make methamphetamine.

Voters in 1992 approved a ballot measure that allowed gambling in boats along the Mississippi and Missouri rivers, which included the $500 loss limit.

John Britton, a veteran lobbyist who helped pass the original measure, told the Senate Ways and Means Committee on Monday that it should repeal loss limits, but added that capping the number of boats is nonsensical because only seven companies control Missouri’s 13 casinos.

Britton is now representing Wild Rose Entertainment, a Des Moines, Iowa-based casino company. He said a former state lawmaker added the loss limits as a joke and never expected them to be accepted, but it’s not worth blocking new development to repeal the caps.

“Both Aristotle and Francis Bacon would be scratching their head looking for the logic in that,” Britton said.

The Kansas law allowing gambling is being reviewed by the Kansas Supreme Court.

The Ways and Means Committee did not vote on the bill.

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