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Commission urges drop of gambling loss limit

Casino tax has raised $2 billion since 1995.
Wednesday, November 15, 2006 | 12:00 a.m. CST; updated 12:06 p.m. CDT, Tuesday, July 22, 2008

Missouri’s $500 casino loss limit is costing the state as much as $100 million per year and making its casinos less competitive than those in bordering states, the Missouri Gaming Commission said in its annual report to the General Assembly.

That’s why the commission, for the tenth consecutive year, is recommending the legislature review the impact of the loss limit and consider repealing it. Supporters of repeal say the loss limit is causing casinos and the state to lose money but does nothing to curb problem gambling. Opponents, however, argue that lifting the loss limit would cause a multitude of problems, such as increased organized crime and money laundering, suicide, bankruptcies and broken homes for those addicted to gambling.

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The loss limit is unique to Missouri. It involves a computer system that tracks gamblers’ movements and caps their losses at $500 per two-hour boat excursion.

Gene McNary, executive director of the Missouri Gaming Commission, said the fact that riverboat casinos allow patrons 10 separate excursions per day undermines the intent of limiting gamblers’ losses.

“It does not do what the proponents had wanted the loss limit to accomplish,” McNary said. “It is not protecting the gambler.”

Mike Ryan is executive director of the Missouri Gaming Association, which represents Missouri casino operators. He noted that the loss-limit law also requires that patrons use a government-issued ID to check into a casino and have their gambling habits monitored. That data then becomes part of a database.

“People do not want companies or the government watching their gambling,” Ryan said.

Ryan said he is optimistic that repeal of the loss limit would not affect the average loss per patron in Missouri, which now stands at about $60 per person per excursion.

“Budget and sensibilities will govern,” he said.

Tom Grey, a spokesman for the National Coalition Against Legalized Gambling, said casino operators are overlooking gamblers’ welfare by lobbying for an end to loss limits. He finds that distressing.

“For their profit, they are willing to give more pain to gamblers,” he said. “How much is enough?”

In a 1992 referendum, Missourians approved gambling under the condition that casinos be restricted to riverboats and that gamblers’ losses be limited to $500 per excursion. The loss limit was perceived as essential to protect gamblers who could not help themselves. Repeal, Grey said, would eliminate the last barrier to unfettered access to gambling in the state.

Mark Andrews, chairman of Casino Watch, said that if the loss limit were repealed, Missouri gamblers collectively could lose an additional half-billion dollars per year beyond what they lose now.

“Legislators should not encourage their constituents to be losers,” he said.

Missouri Gaming Commission Chairman Noel Shull said in the annual report that “the limit is potentially costing the state $100 million ... annually in additional gaming tax revenues.”

He noted that industry members “would be willing to accept a 1 percent tax increase in the 18 percent state gaming tax as a trade-off for the elimination of the $500 loss limit.”

The commission’s report stated that a 1 percent increase in the gaming tax – already among the highest in the industry – would not necessarily affect the Missouri gambling market’s competitiveness with neighboring states. The loss limit, Ryan said, is already putting Missouri’s 11 casinos at a competitive disadvantage because patrons are turned away by the inconveniences and confusion that loss limits cause.

There “is no doubt about it,” Ryan said. “The loss limit is anti-competitive.”

State Rep. Kenny Jones, R-Boonville, agrees.

“If this thing does not work, why should we have it?” he said. “A repeal might draw some people and more tourism dollars to mid-Missouri.”

Still, Jones said that Isle of Capri, the casino in his hometown, might be less affected than casinos near bordering states.

Gamblers seem to have no strong feelings about the loss limit. Though none would go on the record with reporters outside the Isle of Capri, most said privately that the loss limit is of no concern to them.

Beth Shaw, a nurse at University Hospital who likes to play slot machines, said the loss limit means little to her but might be an inconvenience to others. She said problem gamblers can find ways around the cap. In St. Louis and Kansas City, for example, they can hop from one casino to the other.

“People can still lose a lot of money,” she said.

State Rep. Ed Robb, R-Columbia, said he wants to hear more discussion before deciding whether to retain the loss limit. He does wonder whether government is being overprotective, though.

“To what extent should the state, or the government, be the guardian?” he said.

In 1994, Iowa ­­– the model for Missouri’s restrictions – repealed its loss limit, which restricted gamblers to $200 buy-ins and $5 bets.

“The elimination of the loss limit (in Iowa) did not increase the reported incidences of problem gambling,” the Missouri Gaming Commission’s report reads.

The report also suggested that the state spend more money on its problem-gamblers program and revise it to reflect changes in the industry. McNary said 11,000 to 12,000 gamblers are enrolled in treatment programs.

Meanwhile, casinos – and the state – are doing quite well. The commission reported that in fiscal 2006, the state “reached a new milestone” when its total casino-tax receipts since 1995 reached $2 billion. The money is reserved for education and veterans programs.

Statewide casino revenue has increased every year, and fiscal 2006 was no exception. Missouri casinos raked in $1.57 billion during the year, which was $61 million, or 4 percent, more than the $1.51 billion they made in 2005.

Gamblers also cashed in to some extent; the report cites a 6.2 percent increase in statewide wins-per-patron, as total patron volume fell 2 percent.


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