There has been plenty of criticism over Kansas’ decision to “own” state gambling and allow private business to run the operations. However, recent developments involving slots and racetracks show exactly why such criticism is completely justified. Rick Alm of the Kansas City Star explains why Wichita businessman Phil Ruffin pulled the plug on running slots at his dog track:
Ruffin, the owner of the Camptown dog track in Frontenac, Kan., said the state’s 40 percent tax bite on race track slots didn’t leave enough cash flow to turn a fair profit.
Ruffin said the final straw in negotiations came last week with the state’s insistence Ruffin pay the entire $12 million in estimated costs to purchase, install and operate the track’s proposed 600 electronic games that technically would be owned by the state.
“Making me pay for the slots put us over the edge,” he said. Despite state “ownership,” Ruffin said Kansas isn’t willing to pay for gambling equipment, share advertising costs or absorb any other construction or operational expenses.
The story goes on to explain that the Woodlands in Kansas City, KS may also make the same decision despite a long desire to bring slots to their track:
“We have to be very, very careful and make sure we’re doing the right thing,” Woodlands executive Larry Seckington said Monday.
“We’re going to decide if it’s economically viable for us,” said Seckington. “It’s very close. If the numbers come back so bad that it looks like a total loss for us, it would be difficult to move forward.”
Its quite clear that KS is not really owning anything but the profits if they don’t purchase the equipment, market their product or absorb any expenses related to doing business. The Kansas City Star is also reporting the that this argument is being presented in front of the Kansas Supreme Court:
In questioning the constitutionality of the law, the attorney general argued Kansas would “own” the apparatus of legalized gambling despite the fact it would hold title to no land, build or finance no buildings nor purchase slot machines or other gambling equipment or supplies.
“The right to own and operate those casinos will be sold to the highest bidders, with the state doing nothing more than collecting tax revenue and enacting regulations,” it said.
This simply feeds the belief that the only reason local governments make legal a practice that has been criminalized for over a hundred years is because they want in on the cut. The Kansas legislature must think this method of “ownership” justifies such exorbitant taxes on gambling but it’s a difference without distinction. States need to find better ways to balance their budgets and cut spending because it is disgraceful that they keep pushing the idea of making losers of its people to bring in a few more bucks.