Gambling expansion looms as threat
JEFFERSON CITY—As the Missouri General Assembly heads toward its May 18 finish, Christian and conservative groups are fighting to stop a major casino expansion bill.
If passed it would remove one of the last of several qualifiers stipulated by Missourians when they approved riverboat gambling in 1993. If efforts fail and the bill becomes law, it would make state casinos more profitable and thus attract even more efforts to expand authorized locations, despite the bill’s false claim to do the opposite.
Sen. Charlie Shields, R-St. Joseph, introduced Senate Bill 430 (SB 430) to remove the loss limit of $500 per two-hour period of gambling. It was initially approved by the Senate 17-16 on April 24 and may ultimately pass if concerned citizens and churches do not communicate their opposition immediately.
Shields cited the prospect of Missouri casinos losing business because of a new Kansas law that allows state-owned casinos to operate there. Shields said Missouri needs to protect its own billion-dollar casino gambling industry, but Kerry Messer, representing the Missouri Baptist Convention’s (MBC) Christian Life Commission, disagrees.
“Since when does a billion-dollar industry need special protections from competition? If casinos wish to be treated like legitimate businesses, they should start acting like responsible corporate citizens and stop manipulating the law in order to abuse their patrons.”
The state currently receives 18 percent of net profits, with local governments where casino boats are located collecting another 2 percent. To sweeten the deal, SB 430 proposes that Missouri collect additional new taxes on casino revenues, with a revolving debate over how much extra, ranging from anywhere between 1 and 5 percent. The perfected version of the bill is at 4.25 percent with most casinos complaining about that being too big a slice of their more than $1.8 billion annual revenues.
SB 430 would have specified the additional profits be put into a scholarship fund for qualifying Missouri high school graduates. The fund would be known as the Smart Start Scholarship program.
Casino interests claim that, if the state’s gambling loss limit were to be lifted, the state’s additional profits could provide enough added revenue so that the state could give a $2,000 scholarship to every qualified high school graduating senior.
One problem with the proposal, said Evelio Silvera, executive director of Casino Watch, is that SB 430 did not guarantee a specific amount for the program. “Any projected increase in taxes to the state was merely speculative,” he observed.
Casino Watch is part of a coalition opposing the change to the loss limits. Also in the coalition is the MBC, represented by Messer, founder of Missouri Family Network, a pro-family organization which engaged the casino gambling question before it ever became legal in the early 1990s.
“In effect, the state gets nothing out of this bill. Casinos get huge profits,” Messer said. “Over $500 million in additional patron losses!”
Specifics of the original constitutional amendment authorizing casino gambling in Missouri reflected the proponents’ campaign, invoking images of Mark Twain and promising historic replicas to create an industry of nostalgic tourism. The legal promises included:
• that it be done on self-propelled excursion boats, required to offer moving cruises, on the Missouri and Mississippi Rivers;
• that licenses require casinos to be moored within a maximum 1,000 foot zone along the river bank, in relationship to the specific licensed location, when not cruising;
• that games of skill be permitted and not games of chance (no slot machines);
• that no more than 50 percent of the square footage be used for gambling activities;
• that minimum space be reserved for sales of native Missouri arts and crafts;
• that specific space and services be reserved for child care and entertainment for underage guests who would be excluded from the “family entertainment” of the casino floor; and
• that gamblers not be allowed to lose more than $500 in a two-hour period (the time in which the boats were expected to cruise).
It didn’t take long for the provisions to begin to erode. In fact, the word “gambling” was changed to “gaming” in order to make it more palatable to those with concerns regarding its negative social consequences.
“The gambling industry is absolutely nothing like what Missouri voters approved back in ’93,” Messer said. He likens the industry to the movie “Gremlins” in which cuddly creatures become aggressive and violent when allowed to get wet.
Once they got wet in Missouri’s rivers, excursion boats soon became permanent glitzy casino buildings only near the rivers, as far from the edge as possible under newer, perverted twists of the 1,000-foot standard. Located as far away from the river as possible rather than within it, they rationalized away the law by encircling casinos with small moats of river water. Most casino opponents understand how using a “safety” argument to break promises for nostalgic cruises was nothing more than a predetermined ploy.
Next to go were the voter-approved provisions for games of skill only. When casinos failed to earn the expected rate of return on games of skill, they brought in slot machines under the gamble that it is easier to get forgiveness later than to obtain permission first. Slot machines (games of chance) now account for the bulk of casino profits, even though voters were promised otherwise.
Systematically, casinos have engaged in a variety of maneuvers to remove virtually every limitation they promised voters in order to get approval to operate in the state. Even the Gaming Commission, created after the fact to regulate the casino industry, is actually charged with protecting their economic interest. It is no surprise that the casinos were instrumental in creating such a commission.
SB 430, it is said, would halt the expansion of gambling by enforcing a cap on the number of casinos. But how can anyone trust this promise in light of casinos’ lack of faithfulness? Silvera said that this amounts to a monopoly for current casino operators. Missouri has 13 licensed casinos currently in operation with three more being developed.
Attempts to allow boats to ply other rivers and lakes, such as those at Lake of the Ozarks and in the Branson area, have so far been defeated. “But,” said Messer, “if casinos ever get away with such initiatives, no community in the state can be protected. Casinos are economic leeches. They bleed communities and families dry.”
That leaves the question of the loss limits promoted in SB 430. “The loss limit is the best protection Missouri and Missourians have against the expanded problems of gambling, such as bankruptcy, broken homes, and organized crime,” said Silvera. “We’ve been insulated in comparison to other states.” (Several states adopted casinos with this promise only to have it broken. Only Missouri has managed to hold onto this promise, so far.)
Messer agreed. “When you remove protective loss limits, where will a half billion plus in new losses come from? It will come from Missouri families who will be hurt by the casinos’ predatory practices. The social devastation is virtually incalculable.”
After the first filibuster, Shields requested a compromise. Gambling interests were invited to participate in the discussions. Church groups were not. The anti-gambling coalition, however, offered its own compromise for consideration.
In exchange for keeping the current loss limit, there would be no increase in taxes on casino profits (sin taxes are not acceptable anyway). Instead, casino owners would pay a $5,000 per year licensing fee on every slot machine. (Slots make up the bulk of casino revenue.)
With the current number of machines, the licensing fee would provide a guaranteed annual income to the state of about $113 million. This would guarantee fully-funded scholarships of approximately $2,000 for every qualified high school senior.
Silvera noted that in order for casinos to profit, those who participate in gambling must lose. The compromise would not require any additional losses. As SB 430 was originally proposed, Missourians would have to lose an additional $500 million for every $100 million the state could collect in gambling profits. “With our compromise, Missourians don’t have to lose another dime,” he said.
According to Messer, “Protective loss limits would have remained intact, along with their many secondary law enforcement benefits. There would have been no expansion of casino gambling, and the state could still pursue a new scholarship opportunity if it was serious about doing so.”
Instead of adopting the Casino Watch compromise, the Senate voted to keep the provision eliminating loss limits, raising the tax rate an additional 4.25 percent and setting a cap on the number of licenses at 16. This higher cap will allow for several more casinos but requires the licenses to be permanently moored to their original locations.
“However,” explained Messer, “the only political purpose for having a cap on the number of licenses is to appease lawmakers from the southwest area of the state. Apparently Businessman Peter Herschend of Silver Dollar City has used his political influence to broker a ‘deal’ with the casinos.”
“Under his scheme casinos would accept a limit on the number of casinos to better protect Branson from the threat of a constitutional initiative to bring casinos to the White River, or some other casino plan. In exchange, conservative lawmakers from the southwest and other areas of the state would be encouraged to vote to remove the loss limits.
“But this kind of a deal is ineffective if adopted and offensive to those communities already facing casino damages. It should stir up God-fearing citizens across the state,” fumed Messer.
“While this plot only creates a pretend protection for Branson, it does so at the expense of everyone else, putting every community along the Missouri and Mississippi rivers at risk today, and many others in the future.
“Casino lawyers are not going to be made fools of. They are good at playing the long-term strategies it takes to get what they want. Misleading states and well-intentioned citizens has been a hallmark of their trade. They know that a statutory law limiting casinos to strict locations along the Missouri and Mississippi rivers would become unconstitutional the very day any constitutional initiative is approved.
“Any campaign, such as the recent ‘Rockaway Beach’ proposal, that garners a simple majority of Missouri voters would automatically strike down any contradictory restriction in state statutes.
“If anything, this compromise even threatens Branson itself, along with the whole state. Removing loss limits only makes Missouri casinos 50-60 percent more profitable. While gambling restrictions are forever being eroded away, corralling casinos with new restrictions is almost impossible. The ‘compromise’ in SB 430 is one-sided, benefiting casinos only.
“And to make matters worse, passage of SB 430 would ultimately attract more investors to buy into more constitutional initiatives to expand casino opportunities in areas of the state not currently tapped into. After all, SB 430 makes all Missouri casinos, current and future, even more ‘filthy’ rich from the suffering communities and families they allure.
“We are asking for churches and concerned citizens across the state to please contact their state senators and representatives to vote against any ‘deal’ to remove the loss limits promised to Missouri. Ask lawmakers to not allow this expansion of casino gambling, and not to fall prey to more fake promises that only put the state at greater risk.”