House Committee Hears Testimony on Casino Moratorium Bill

Missouri State Representative Brian Baker is the sponsor of HB 2420, which seeks to place a 3-year moratorium on the issuance of new casino licenses. The Special Committee on General Laws heard testimony this morning from those opposed and in support of Rep. Baker’s bill. David Welch, the Policy Analyst and Government Liaison for the Missouri Gaming Commission (MGC) spoke in opposition to the bill. He claimed that such legislation should not be passed because the commission should be allowed to use discretion in determining if the market would allow for expanded gambling. This position does seem to conflict the position publicly stated by the Executive Director of the MGC Gene McNary as he said that if the legislature didn’t want any more expanded gambling then they should pass a bill preventing them from issuing new licenses.

Testifying in support of the casino moratorium was Casino Watch. They explained that both the people and market have reached their limit on gambling in the state. As previously reported the citizens of Jefferson City sent a very clear message with an overwhelming vote of 62% against expanded gambling. This recent desire to have no more casinos combined with the last statewide vote against expanding gambling to rivers beyond the Missouri and Mississippi, sends a clear signal that Missourians don’t desire more gambling.

Casino Watch also testified that the market has matured and become saturated as pointed out in MGC Statewide Market Study. The Study also explained that there is very limited growth potential in the state and a new casino in Kansas City for example would be taking about 95% of its gamblers from existing casinos.

Casino Watch also provided analysis as to why such a bill would not be harmful to free market capitalism and trade. They expressed that in other places such as Las Vegas and Mississippi they have a true free market and as such charge the same tax rate as any company, between 7%-9%. This allows for fair competition where casinos can openly invest in properties and compete for business. In the Missouri market, we have an effective tax rate of 29%, which includes the 20% tax on revenues and 9% tax made up of things ranging from the $2.00 boarding fee per excursion to the funds necessary for enforcement. The only way capital investors will enter this market with a 29% tax rate is with the assurance the market will be limited. The free market competition model only works if we have a true open market with normal tax rates. We can’t have both high tax rates and a complete open market and we certainly can’t change the rules after 13 casinos have invested and entered the market.

Please show your support for Rep. Brian Baker’s bill to limit the expansion of gambling for the next 3 years by contacting your State Representative.

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