A typical page from the gambling industry’s playbook is to pay the state a great deal in taxes to allow their destructive product to be legal. The states take the “bribe,” if you will, because they want to increase revenue in lue of curbing spending or raising taxes. The gambling establishment takes the deal because they make so much money off the backs of the people that they can take a 30% hit and still be profitable. Kansas, however, is pushing the tax envelope so far that even the gambling industry is saying no. Casino Watch originally commented on how greedy Kansas’ gambling deals were when they allowed a Frontenac, KS dog track to close down because the owner was unwilling to invest all of the money necessary to run a racino and pay a ridiculous 40% gross tax and a 60% effective tax to the state. Now Rick Alm of the Kansas City Star explains how history is repeating its self:
As Daniel Webster eloquently advised Chief Justice John Marshall in 1819: “An unlimited power to tax involves, necessarily, a power to destroy.” The Kansas Legislature and state gambling regulators appear to be forgetting that in allowing but heavily taxing slot machines at racetracks.
As a result, don’t be surprised if The Woodlands never has slots, which could spell the end for the state’s last surviving pari-mutuel racetrack. After months of talks, track operators and state officials still haven’t come to contract terms on a division of the spoils at a Woodlands Race Park racino, and it’s starting to look as if they may never.
Don’t get me wrong, almost any strategy that prevents the expansion of gambling is probably okay in my book, but the shear amount of exploitation and greed by the Kansas legislature is shameful.