Today’s Missouri Gaming Commission Meeting Report

The Missouri Gaming Commission (MGC) held its monthly meeting today in Jefferson City.  There were several disciplinary actions taken including a $5,000 fine against Ameristar Casino Kansas City for failing to report a criminal theft from a patron and a $10,000 fine against Argosy Casino in Riverside for using old software in slot machines that had been revoked.

The MGC also negotiated down a prior fine, which they do each meeting by an average amount of 10 percent, this time against Harrah’s North Kansas City in which the casino used a deck of cards in a poker tournament that did not contain all the playing cards.

Before moving into a closed meeting, the commission approved a motion to transfer the control of the Horse Racing Rules from the Missouri Horse Racing Commission to the Missouri Gaming Commission; which was originally a motion made during the prior Missouri Horse Racing Commission meeting.

A Cautious Victory…Loss Limit Beware!

On Monday the Missouri Gaming Commission (MGC) passed what looks like a well- intentioned moratorium on new casinos in Missouri. Virginia Young of the St Louis Post-Dispatch explained the move:

The freeze halts, for now, a pending application to add a casino in the Kansas City suburb of Sugar Creek. It also douses hopes of casino supporters in Cape Girardeau, Mo., and discourages talk of a casino at the Chain of Rocks Bridge in St. Louis. Regulators said a freeze was needed because it appears likely that a measure capping the number of casinos will be on the general election ballot Nov. 4.

While it’s a positive move to see the MGC halt the unnecessary expansion of gambling, it’s important to understand the implications of such a situation. As explained in a prior report, the ballot measure in question does seek to cap the number of casinos, which would certainly be a benefit to those in Missouri, but it also seeks to remove the $500 loss limit. The casino industry and regulators alike have long tried to trade the number of casinos in the state for the removal of the loss limit. Because the November vote has a cap on casinos, the MGC will leverage the results to their advantage. For instance if the initiative passes then the loss limit has been removed and there would be a cap (a cap that could easily be lifted by the MGC with a few simple changes to the definition of licenses – which is being done now). If, however, the initiative fails, the MGC will say it proves citizens don’t want to restrict the number of casinos because they voted against the cap.

Motivation behind this strategy can be gained by looking at recent comments made by Gene McNary, the Executive Director of the MGC. Rick Alm of the Kansas City Star reported:

Gaming Commission director Gene McNary, who has pushed Wild Rose project, endorsed the moratorium. “It’s contrary to what we would like to see go forward,” he said of the ban. “But the fact is we’re regulators and we’re not operating in a vaccum.”

Casinos are coming in Kansas, and “the casino industry is going through a downturn,” he said. The moratorium language said the “Gaming Commission desires to be responsive to the wishes of the citizens…and will be guided by their vote in November.”

The Executive Director clearly indicated a moratorium is not what is wanted, but given they don’t operate in a vacuum, (i.e. outside of external political influence), they need to be guided by this vote. Past comments and actions by Mr. McNary also clearly indicate that a free market approach is what the MGC believes in regardless of expert testimony and analysis which demonstrates that the operative model in Missouri is not a free market.

Even though the MGC and the current casino industry wants you to believe that the initiative petition is the best option, there are better alternatives. We need to vote against the initiative petition to save the loss limit and then send a message to the MGC that gambling expansion through more casinos is not in the best interest of both the industry and most importantly the people and families of Missouri.

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For more information on the state of gambling in Missouri and the effect of the loss limit, please read our Casino Watch Policy Briefs:

• Missouri’s Competitive Outlook: Is the loss limit hurting casinos?

• Missouri’s $500 Loss Limit: How it helps compulsive gamblers

• Loss limits and law enforcement: How Missouri is Uniquely Protected

Missouri Horse Racing, a much larger expansion of gambling then one might think

Monday afternoon the Missouri Horse Racing Commission held their first meeting in 10 years.  The meeting was led by Gene McNary, the Executive Director of the Missouri Gaming Commission (MGC), at the MGC’s main office in Jefferson City.  The topics at hand were transferring the rules authority of horse racing away from the Missouri Department of Revenue to the MGC, and the possibility of bringing the horse racing industry back to life.

Horse racing didn’t survive in Missouri because there was not a strong enough market to sustain the industry.  The Kansas City Star ran an AP article that explained:

Missouri voters approved pari-mutuel wagering at horse tracks with a 60 percent majority in 1984, but authorized only limited simulcasting, where bettors wager on races at other tracks that are shown on television screens. Under current law, a track may offer simulcast betting only for as many days as it holds live horse races.

Because the industry could not sustain races in Missouri they were unable to continue offering such simulcast betting.

As explained by one commissioner in the AP article:

You have to have a casino in the track,” said commission member Charles “Herb” Butler of Kahoka, a former jockey who is now a pari-mutuel judge in Iowa. “It can’t be a separate place, or it will go broke.

That is why it seems that the Executive Director of the Missouri Gaming Commission wants control, because  setting up racinos all over the state to expand gambling is being advocated.  This idea is not unique and most states are discovering that the sport of horse racing is not the true attraction, the slots are.

Stateline.org ran a story detailing just how much expansion of gambling takes place in order to prop up the horse industry:

* Indiana, which already has 11 commercial casinos, will open two horse tracks in downstate this summer that will feature 2,000 slot machines …
* Pennsylvania, which already has 15,000 slots at its six racinos and one casino, expects to add another 1,200 slots this year. When the gambling law is fully implemented, Pennsylvania will have 61,000 slots, second only to Las Vegas…
* Maryland voters this November will get to settle a long-running feud in Annapolis over whether to legalize 15,000 slots at tracks to bolster the state’s horse-racing industry.
* New York plans to allow 4,500 video slot machines at the Aqueduct thoroughbred track in Queens, which would dwarf the total of 13,000 slots at eight other racetracks in the Empire state.

There are also states like Kansas, Massachusetts and New Hampshire who are looking to implement these racinos.  Sadly, even racinos are not always enough to save the industry as states like Illinois are asking state legislators to help subsidize their racinos to keep the tracks open.

When the Missouri Horse Racing Commission tells you that the casinos are a must or horse racing wont survive, and when you look at how many states must have casinos with their tracks, its easy to conclude that regardless of your position on horse racing, it represents a massive expansion of gambling in order to have any hope of survival.

Going for the easy prey…an Illinois casino with absolutely no shame

The Chicago Tribune reported a most unfortunate incident:

An Aurora casino has been fined $800,000 by the Illinois Gaming Board for marketing its facility to people with self-identified chronic gambling problems, officials said.

Penn National Gaming Inc., which owns Hollywood Casino, sent marketing materials to at least 146 people on a database containing those who have asked to be excluded from getting such solicitations, officials said. Three Penn employees also were suspended for up to two weeks in conjunction with the mailings.

In January, a marketer affiliated with Penn apparently sent materials to 16,000 people, with some reaching those on the self-exclusion list. This was the second fine related to self-exclusion lists for Hollywood, a Gaming Board spokesman said. The company was fined $600,000 in July 2006.

These self-exclusion lists exist to protect the most vulnerable and their families.  It’s deplorable that a casino company would repeatedly target them, and by effect, their families.  This is more proof that casinos don’t care who they hurt nor do they really care to help those they hurt.  This level of hypocrisy, claiming to support programs for those with addiction then using that list as a marketing tool, is unimaginable and I hope $1.4 million in fines will actually send an appropriate message but some how I doubt it will.

MO Gaming Commissioners Reappointed by Senate Committee

This morning in Jefferson City the Senate Committee on Gubernatorial Appointments meet to appoint and reappoint several individuals to state boards and commissions. Among those seeking the approval of the committee were two reappointments to the Missouri Gaming Commission. As stated in the hearing schedule for the committee the commissioners being reconsidered for a new term were:

Darryl T. Jones, Democrat, as a member of the Missouri Gaming Commission (Bray)

Noel J. Shull, Republican, as a member of the Missouri Gaming Commission (Ridgeway)

The committee moved to approve all the appointments and reappointments, including Commissioners Jones and Shull. MO Gaming Commissioners serve three-year terms.

the next great st louis convention area… and 3:00 am drinking too!

The St Louis Post Dispatch is reporting what could prove to be yet another embarrassment for local governing agencies.  They explain:

The St. Louis County Council will consider helping the Pinnacle Casino in Lemay serve liquor until 3 a.m. daily in restaurants and entertainment areas outside the gaming floor when it opens. Currently, the casino could serve alcohol in those areas until 1:30 a.m.

St. Louis County Executive Charlie Dooley last week asked the Council to declare the Pinnacle site a convention trade area. The move gives the county authority to issue a liquor license that would add the extra time to serve liquor outside the gaming floor. The state gaming commission must approve the change before Pinnacle could serve liquor until 3 a.m. outside the gaming area.

One look at the surrounding area proves this is not a convention area.  And the newly constructed casino facility will hardly qualify as a convention center especially considering how much of the original proposal has been sidelined.

If both the Council and the Missouri Gaming Commission approve Pinnacle’s request, they will be sending a clear message: Its okay for the government to encourage excess drinking and gambling because it means more money in the pockets of the casinos and local governments. We have been embarrassed enough by past actions of casino money buying local government and I truly hope our local government agencies will reject such an obvious attempt to strip more money out of the pockets of Missourians in such an underhanded way.

called off on account of rain…

The Missouri Gaming Commission and Executive Director Gene McNary have been under a lot of pressure regarding their recent decision to approve a new casino in Sugar Creek.  The Kansas City Star explains:

Gaming industry representatives, stock market analysts and some state lawmakers have sharply criticized the commission in recent weeks for considering an additional casino in the Kansas City market at a time Kansas is preparing to build two state-owned gambling facilities in neighboring Wyandotte County.

This week Gov. Matt Blunt put his two cents worth into the debate. Asked whether the governor had a backstage role in the commission’s sudden cooling on Sugar Creek, spokeswoman Nanci Gonder said, “Gov. Blunt has had no specific conversations with the Commission on this topic, but the governor’s opposition to expanding gaming is well known.”

In its latest meeting, the MCG planned on addressing the sole applicant for Sugar Creek but this political pressure has caused a considerable amount of backpedaling on the issue.  There are various bills in the legislature attempting to stop a new casino and there have been several different reports about the changing nature of the latest MCG meeting.  The most recent report, however, explains that the meeting has been outright cancelled.  I could be wrong about the decision to cancel the meeting being a result of Gene McNary’s and the Commission’s incitement of the entire Missouri casino industry, the legislature and the Governor.  After all, the spokeswoman for the Gaming Commission did say the meeting was cancelled ‘“due to inclement weather.”’

caps and moratoriums with casino support

The unpredictable, ever changing environment of the Missouri legislative session has just gotten more interesting. As was reported last week, the Missouri Gaming Association opposed a decision by the Missouri Gaming Commission to authorize a 14th casino in Missouri to be located in the Kansas City area in Sugar Creek, MO. It seems that the opposition to a new casino in Sugar Creek has created an interesting alliance, according to Virginia Young of the St. Louis Post-Dispatch:

In an unlikely pairing, the gambling industry is pushing a bill sponsored by a conservative Republican, Sen. Jack Goodman of Mt. Vernon.

His bill (SB1171) would place a two-year moratorium on licenses for new casinos.

After utilizing statistics and information found in the Missouri Gaming’s Commission recently released statewide market study at a hearing in front of the Missouri Gaming Commission when the new Sugar Creek casino was being considered, the Missouri Gaming Association once again distributed evidence and analysis from the market study to support their argument that the Kansas City area does not need and cannot support another casino. It seems though that even with evidence found in a study produced and paid for by the Missouri Gaming Commission, that the commission’s Executive Director, Gene McNary will not accept any argument to reject the expansion of gambling in the state of Missouri by adding a new Kansas City area casino.

Senator Jack Goodman is not the only legislator pushing for a stop to the issuance of new casino licenses with the support of the casino industry. State Representative Shannon Cooper has introduced HB 2232, which would cap the number of licensed casinos in Missouri to 13, which would not include the Sugar Creek casino. Rep. Cooper has stated that he is hoping his legislation is passed in the House and Senate and then signed by the Governor before the Gaming Commission finalizes approval of the new Sugar Creek casino.

Just in case both of these pieces of legislation fail, the casino industry wants to put the subject of removing the loss limit and potentially limiting new licenses up to a vote of the people through an ballot initiative. The Post-Dispatch reports:

If the bill doesn’t pass, the gaming industry has another option: an initiative petition. A proposal ready for circulation would cap the state’s casinos at those already built or being built. It also would repeal the state’s $500 loss limit and raise gaming taxes slightly.

Missouri makes it 14…Gaming Commission Expands Gambling by adding a new casino

Today’s Missouri Gaming Commission meeting in Jefferson City drew quite the crowd of interested parties. Beyond the normal consideration of rule infractions, key applicants and settlement agreements, the commission heard presentations for and against a new casino in Sugar Creek, MO.

William Brasher, representing the Missouri Gaming Association, objected to the approval of a casino in Sugar Creek by sharply criticizing the reasoning of the commission on the addition of another casino into the Kansas City marketplace. Citing evidence from the Missouri Gaming Commission’s recently released statewide market study, Mr. Brasher explained that Kansas City had reached its capacity for casinos. During his presentation, Mr. Brasher explained that the gaming commission had a longstanding tradition of “controlled growth.”

State Representative Ray Salva and Sugar Creek Mayor Stan Salva spoke in favor of a new casino in Sugar Creek by explaining the variety of uses that the city has envisioned for the site around the proposed casino.

While the only factual evidence provided during the presentations painted a clear picture against approval of the new casino, the Gaming Commission voted unanimously to expand gambling and approve Missouri’s fourteenth casino.

It is surprising, given the content of the presentations made, the evidence found in the gaming commission’s own study, and the previous statements of the commission when approving other casinos, that the gaming commission would approve a new casino let alone by unanimous vote.

It is important to note that upon approval of the two Pinnacle Entertainment casinos in downtown St. Louis and South St. Louis County (Lemay) then Missouri Gaming Commission Executive Director Kevin Mullaley expressed that the state had reached its limit when it came to the number of casinos. While this has proven to be true by a variety of factors, it is surprising that the current Executive Director, Gene McNary, would seek to fast-track a decision on squeezing another casino into a state that is not clamoring or asking for the expansion of gambling. The speed at which the Gaming Commission has come to this decision to expand gambling has caught a great deal of attention. According to Rick Alm of the Kansas City Star:

Despite consultants’ warning, commissioners on Jan. 16 set in motion a startling timetable for Sugar Creek.

Noting one applicant already is on file, commissioners asked McNary to report back on Feb. 20 “whether a gaming facility in the area would be in the best interest of the state.”

At the same time commissioners opened a 45-day application window that closes March 1.

A mere 18 days later, McNary is to advise commissioners which Sugar Creek applicant he and his staff recommend for “priority investigation” — usually the first step toward groundbreaking and eventual licensing.

What is the rush? The commission has placed no justification in the public record for an accelerated timetable.

During the discussion over the new casino in Sugar Creek, Rep. Salva repeatedly stated that “competition” is the motto of the state. Unfortunately Rep. Salva has missed the several inscriptions of the actual motto of Missouri displayed throughout the State Capitol including the main entrance. Our state’s motto is, “The Welfare of the People Shall be the Supreme Law.” It seems that during the discussion and decision to expanding gambling today, no one remembered to consider the welfare of the people of Missouri who will be made losers so that another gambling company can be a winner.

Missouri Gaming Commission Statewide Market Study Reveals Support for Loss Limit

Survey Question Result Shows Support for $500 Loss Limit

Today the Missouri Gaming Commission released their Statewide market study prepared by the University of Missouri St. Louis entitled, “The Missouri Gaming Market: Gamer Profiles and the Estimated Impact of New Gaming Facilities on the State of Missouri and Missouri’s Gaming Industry.”

Among the questions asked of the 2,500 respondents was the following question:

Missouri currently has a law that limits the amount of money a single player can lose to $500 for every 2 hours at a gaming facility. Do you favor or oppose having a $500 loss limit?

According to the study the results showed that, “A clear majority of survey respondents favor the Missouri Loss Limit.” Over 60% of those surveyed are in favor of the loss limit versus an approximate 25% who are opposed to the loss limit.

The study also concluded that if the loss limit were repealed 33.7% of Missourians would have a less favorable opinion of gaming in Missouri versus only 7.2% that would have a more favorable opinion.

This study clearly indicates that Missourians overwhelmingly support the $500 loss limit. Casino Watch Executive Director Evelio Silvera explains, “Public sentiment in support of the loss limit is clear, and legislators should reject any and all legislation that would repeal the loss limit.”

(Casino Watch staff is currently conducting a full review and analysis of this MGC sponsored UMSL market study and will be releasing our findings soon, please check back for updates)

Jury awards $1 million to woman who was wrongfully terminated by Harrah’s

As reported in the Kansas City Star:

A Clay County jury has awarded a woman $1 million in actual and punitive damages after she claimed Harrah’s North Kansas City Casino and Hotel wrongfully terminated her. Former security employee Michele Chambers of Kansas City said she was fired after she alerted the Missouri Gaming Commission that she was instructed by supervisors not to investigate, intervene or report to the commission gamblers who use multiple player cards in violation of state law. Violation of Missouri’s player-card rules could aid high rollers or compulsive gamblers seeking to exceed the state’s $500 buy-in limit every two hours and wager more than the law allows.”       

The story goes on to quote Casino Watch Executive Director, Evelio Silvera:

Bevelio (sic) Silvera, executive director at Casino Watch, a St. Louis-based anti-gambling citizens group in Missouri, was dismayed by the jury’s findings. This is an example becoming public of what we had suspected and hadn’t hoped was common practice — skirting the laws of Missouri, he said. I applaud this woman for what she’s gone through, the loss of her job…intimidation,’ Silvera said. He said he hoped her victory in court would encourage other casino workers to more readily report wrongdoing by casinos.”       

It is important to note that this case which involves a casino employee being fired for reporting the violation of Missouri law by Harrah’s to Gaming Official representatives at the casino HAS NOT been investigated by the Missouri Gaming Commission. One can only wonder why the Executive Director of the Gaming Commission has yet to call for an investigation…maybe these headlines will spur on some action.  UPDATE 12/20: Well now it seems there will be an investigation into this matter by the Missouri Gaming Commission. 

Casino Campaign Contributions become Point of Discussion for the Missouri Gaming Commission

On Wednesday November 28th in Clayton MO, several casinos presented reports to the Missouri Gaming Commission (MGC) as is common when they seek re-licensures.  After these reports were presented the Commissioners asked various questions to the casino executives.  Commissioner Judge Hais asked a question about the issue of casino campaign contributions; a timely question as many around the state are asking whom exactly the casinos and their contributions are influencing.  This same issue was addressed by the HRCC earlier in the week which prompted them to no longer accept casino contributions.  Judge Hais specifically asked if the casino would chose to voluntarily stop giving campaign money if the other state casinos also agreed to stop giving campaign money.

Of the two casino’s present at the meeting, both indicated that the decision would mainly come from their corporate office, but both Isle of Capri Boonville and Pinnacle, Inc. (which oversees Presidents Casino and Lumiere Place) agreed to discuss the issue and Pinnacle even seemed overly cooperative indicating that most of those who would be responsible for such a decision were present at the meeting and they could discuss it immediately if necessary.

It will be interesting to see how this plays out.  It would be wonderful to see the casinos choosing to voluntarily stop providing our legislators with undue influence through campaign contributions.  It is clear that if they did pull money from direct contributions they would simply spend more on lobbyist.  However, it is always preferred to see a legislator make a decision based on the voices of their constituents than out of obligation because they accepted funds to win an election.

We applaud the efforts of Commissioner Judge Hais.  Not only was the question timely and relevant with far reaching impacts, at the end of the meeting the Commissioners where unanimous in making a decision to sit down and talk with casinos to try to come to an appropriate resolution.