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Columbia Missourian

Ballot measure would eliminate gamblers' loss limits

By Joel Walsh
October 26, 2008 | 8:30 p.m. CDT
Casino guests play the nickel slots at the Isle of Capri Casino in Booneville on Oct. 2. Proposition A would repeal the $500 loss limit in Missouri, increase the casino gambling tax from 20 percent to 21 percent and cap casino numbers.

JEFFERSON CITY — Gerry M. sleeps well at night.

It's been 11 years since he made his last bet, and the dreams of the phone ringing with creditors calling in the middle of the night have long since subsided.

Official ballot language for Proposition A

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 new fund?

State governmental entities will receive an estimated $105.1 to $130.0 million annually for elementary and secondary education, and $5.0 to $7.0 million annually for higher education, early childhood development, veterans, and other programs. Local governmental entities receiving gambling boat tax and fee revenues will receive an estimated $18.1 to $19.0 million annually.

Find full text of the bill here.


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Gerry said he will always consider himself a compulsive gambler, though.

"I can't look at you and say that I won't never gamble," he explained, "because if I did that I'd be lying. ... I know I can't make that promise."

Gerry's story and that of other gambling addicts is at the center of an issue Missouri voters face on the November ballot. Proposition A, if approved, would repeal the "loss limit" that prohibits casino patrons from buying more than $500 in chips or tokens during a two-hour span in a Missouri riverboat. Supporters of Proposition A cite the increased tax revenue for schools that would come from repealing the limits on gamblers' losses. For Gerry, however, the costs to gamblers far outweigh the benefits.

Over an untouched cup of coffee, Gerry talked about the "hundreds of times" he promised his wife and family that he would quit during the 25 years he spent in the throes of a gambling addiction.

With arms crossed and eyelids clamped shut, he told how he lost his job because of the choices he made, how he stole money from his wife and children and how, during one empty drive home from the boats while living in St. Louis, he stopped on a bridge and considered taking his life. The thought of his family having to identify his body, he said, was the only thing that held him back.

Since 1998, the 65-year-old Jefferson City man has chaired a Gamblers Anonymous support group that meets in the capital city.

The Missourian agreed to withhold Gerry's last name at his request. He feared going public would harm his reputation and leave the people who attend his weekly meetings feeling vulnerable.

Gerry said it took him 3½ years working two jobs to pay off all the money he owed. He guesses he racked up about $196,000 in gambling debt.

The first bet came while hanging out with a civic club. Later, Gerry put money on horses. But the bulk of his losses, he said, came after he developed a habit of plugging coins into riverboat slot machines, first in Illinois, then in Missouri.

For all the pain casinos have meant to Gerry and his family, he acknowledged the good they bring. Legalized gaming "has given us some jobs. And the jobs are good-paying jobs," he said.

But Gerry won't vote for Proposition A on Nov. 4.

"I'm going to vote against anything that makes it easier for somebody like me to become even more ill than what I was."

***

Gerry concedes the state's loss limit has little effect on a determined gambler. It's easy enough to find a player's card that someone else has left in a machine. In Kansas City or St. Louis, a bettor can hop from one casino to the next to get around the two-hour time limit. Or gamblers can bring their own chips to the casino, whether they've saved them up or bought them from a willing seller.

"The loss limit, it never stopped a problem gambler," Gerry said. "What the loss limit does do is not let a starting gambler get into deep doo-doo."

Statistics reported by the Missouri Gaming Association, a trade organization that promotes casinos in the state, show minimal effects as well: Fewer than 2 percent of casino visitors ever reach the two-hour $500 threshold.

The association's Web site states: "Missouri can best address the needs of problem gamblers by continuing to support and expand education and treatment programs for them."

Scott Charton, spokesman for the pro-Proposition A campaign in Missouri, said he is glad someone like Gerry decided to seek help, but he argues that loss limits don't deter problem gambling.

"Missouri casinos do not want pathological gamblers," he said. "They want people who can set a budget and stick to it."

Charton wants Missourians to vote yes on Proposition A. He said it would boost education funding without placing a direct burden on taxpayers.

Missouri is the only state with a loss limit; Charton said that puts Missouri at a competitive disadvantage and causes casinos — and thus state and local governments — to lose "vital" funding.

"A 'no' vote on Proposition A will cause millions in revenue to flow to Kansas and other states and will directly reduce by millions of dollars the amount of revenue that is retained by Missouri schools," he said.

Charton added that when voters first approved riverboat gambling in 1994, only two neighboring states — Illinois and Iowa — allowed gambling. They had a total of seven casinos.

Now, Charton said, there are more than 100 gaming operations, including tribal casinos and racetracks with slot machines, in bordering states.

Out-of-state competition is chasing away 30 percent of potential profits, he said, citing estimates from the Missouri Gaming Commission. The commission, unlike the Missouri Gaming Association, is a government regulatory agency affiliated with the Missouri Highway Patrol.

With a Hard Rock Hotel & Casino slated for development in Kansas City, Kan., Charton said that Missouri casinos' desire to level the playing field has accelerated. A consultant hired by the state of Kansas estimated the Hard Rock development could capture as much as $174 million from the Missouri market, according to a Kansas City Star report.

"That is a new border raid by Kansas against Missouri," Charton said.

Furthermore, he argued, Missouri casinos employ nearly 12,000 people. 

"In this economy, protecting those jobs is vital, and Prop. A is a vital step in that," he said.

***

The Missouri gaming industry raked in about $1.6 billion in adjusted gross revenue during fiscal year 2008, according to the gaming commission. By statute, 18 percent of that is earmarked for public education funding in the state. That equates to roughly $294.5 million in 2008.

An estimate for the ballot issue as stated by the Secretary of State's office says the state would gain between $110 million and $137 million if the loss limit were repealed, with most of the money going to primary and secondary education.

Charton said that added revenue would be "a windfall for the schools," providing funds that could not be "supplanted or replaced."

Casino admission fees, which are split evenly between the state and local governments where the casinos do business, provided more than $26.1 million to Missouri's Early Childhood Development, Education and Care fund in fiscal year 2008.

Those fees also pumped $15.5 million combined into the Veterans Commission Capital Improvement Fund, the Missouri National Guard Fund, the Missouri College Guarantee Fund and a Compulsive Gamblers Fund during the same period.

Opponents of Proposition A, however, question who really stands to benefit if it's approved.

"If you think they're trying to pass this to improve schools, then I'll sell you some beachfront property in Arizona," said state Rep. Raymond Salva, D-Jackson County. "It's just ridiculous."

Salva cited casinos' backing of the ballot measure. An Oct. 1 report by The Associated Press showed both Ameristar Casinos, which has casinos in Kansas City and St. Charles, and Pinnacle Entertainment, a casino operator in the St. Louis area, chipped in $1.2 million apiece to promote the approval of Proposition A.

Salva and David Knight, a Cape Girardeau business owner, are co-plaintiffs in a lawsuit questioning the legality of the initiative petition that placed Proposition A on the ballot. The suit against Secretary of State Robin Carnahan and State Auditor Susan Montee alleges that the submitted initiative petition is in violation of state law by, as Knight put it, "logrolling" more than one specific subject into the ballot question.

The case is pending in Cole County Circuit Court.

Salva said a provision of Proposition A that would cap the number of casinos in Missouri at those already built or under construction creates a "government-sponsored monopoly." The gaming commission imposed a moratorium on casino licensing — putting plans for casinos in Salva and Knight's communities on hold — when the initiative petition gained ballot placement.

Charton, however, said only Missouri and Nevada lack limits on casino numbers. In Nevada, he said, residents can play slot machines at truck stops and laundromats.

"Missouri doesn't want to be like Nevada," he said, noting there are 13 casinos already licensed here. "I think that's plenty."

***

From an anti-gambling expansion perspective, Evelio Silvera, executive director of Chesterfield-based Casino Watch, agreed with Salva that Proposition A has been cloaked by the gaming industry in a shroud of purported educational funding.

"It's dangerous, it's deceptive and dishonest, and the only people that would benefit with Proposition A are the stockholders of Ameristar and Pinnacle casinos," he said.

Silvera questioned the need to remove loss limits when gaming commission reports show the gambling industry has never had a down year. Adjusted gross receipts for casinos statewide have risen during every budget since 1994.

"This has always been with a loss limit," Silvera said, adding that a gambling environment with safeguards such as loss limits "should be a model, not something you destroy just to be like everyone else."

Silvera's hypothesis: If Missourians lose more money on casino floors as a result of repealed loss limits, then the state could suffer from the higher costs of dealing with bankruptcy cases, added government assistance programs for "deadbeat moms and dads" and additional law enforcement.

Turning his blame to state and local leadership, he said government has played an "improper role" as a beneficiary of gaming revenues.

"It should have never gotten to the place where the government got so wholly dependent on casino money that it caused citizens to be losers of their money," Silvera said.

Gerry conceded that the root of his personal gambling addiction can be attributed to neither casinos nor state government.

"Casinos didn't start my gambling, and even if they all went away, it wouldn't stop it," he said, " ... because there's so many places to gamble, not just in the United States, but in this state."

While he blamed himself for his personal problems, he added that the state could have done more "to put money up front where you can get treatment for folks."

Gerry suggested an in-house treatment facility where, much like a halfway house for alcohol and drug addicts, problem gamblers could remove themselves from their home environment and receive state-funded counseling.

Some Missouri officials refuse to admit there is a gambling problem in the state, Gerry said, "because if it exists, it's a problem, and we have to deal with it."

All the same, Gerry remembers the power of his first Gamblers Anonymous meeting.

"I sat down, and everybody at that table told a story of their gambling life," he said. "I thought, 'Son of a buck. Somebody else does this the same way that I do.'

"Before, I always thought nobody else could be as lousy and ornery a father and a husband as I was. I was terrible."

Taking the suggestion of a woman who had been free from gambling for several years, Gerry said he woke the next morning and asked "a higher power" to help prevent him from making a bet that day. Before, he had always prayed he would win back some of the money he had lost.

Since that day, Gerry hasn't entered a casino, he said.

Gerry now works one day a week as a security guard at a Jefferson City retailer, but for all intents and purposes, he is retired. He said he can go 10 or 12 days in a row now without the "cold, crunching urge" to return to the riverboats. But he doesn't go back to St. Louis by himself. The temptation would be too great.

"I got to be careful," he said, "because the further away I get, the less I remember how bad it was."

Gerry and his wife celebrated their 40-year anniversary in late September. He said she now balances the checkbook and makes the credit card payments each month. If there's a questionable purchase, she'll ask him about it.

He doesn't participate in World Series pools, doesn't play bingo, doesn't buy scratch-off tickets. If a neighborhood kid comes around selling raffle tickets for school, he might make a donation, but won't put his name in the drawing.

"People think I'm a real prude, because I don't do that," he said with a laugh. "They think, 'God, what is he, some kind of alien?'"

But Gerry's actions come from years of struggling with a compulsion that kept him lying awake night after night.

And now?

"I sleep like a rock," Gerry said. "... It's the sleep of the innocent."