What followed was eighteen months of policy changes and legal maneuvers. Following complaints in the media about loose regulation, the General Assembly repealed sections of the referendum. In April 1993 Senate Bills 10 and 11 were passed, which placed casino riverboats under the authority of a five-member board called the Missouri Gaming Commission and ordered that the boats be continuously docked if in the best interest of public safety. In February 1994 the Missouri Supreme Court ruled in Harris v. Missouri Gaming Commission that the legislature did not have the authority to allow games of chance on river-boats, only games of skill. The court ruled that by repealing portions of the referendum and issuing bills, the general assembly was acting of its own accord rather than of the people's accord, a violation of the state constitution.
In response, the legislature drafted a constitutional amendment as follows: "The general assembly is authorized to permit only upon the Missouri and Mississippi Rivers, lotteries, gift enterprises, and games of skill or chance to be conducted on excursion gambling boats and floating facilities." However, the measure was defeated by the state's voters in April 1994. The general assembly responded with Senate Bill 740, which defined games of skill and authorized riverboats to be located in artificial basins. In May 1994 the commission granted the first two licenses for riverboat casinos. However, because the casinos could not offer games of chance, chiefly slot machines, competition from Illinois riverboats kept customers away and the casinos were not profitable.
A petition effort brought the issue to a vote yet again. In November 1994 voters considered the following new initiative: "Shall the General Assembly be authorized to permit only upon the Mississippi River and the Missouri River, lotteries, gift enterprises, and games of chance to be conducted on excursion gambling boats and floating facilities? This proposal would increase state revenues from existing gaming boats approximately $30,000,000 per year. Impact on local governments unknown." The initiative was approved by a vote of 943,652 in favor to 807,707 against.
The result was significant. Revenues from casino riverboats during the first quarter of fiscal year 1996 were more than twice what they had been during the first quarter of the previous year. Initially, the casinos were only allowed to hold two-hour gambling "excursions." This was changed in 2000, when a law was passed allowing continuous boardings. However, the original $500 loss limit per excursion approved in 1992 still applies. Patrons are allowed to purchase only $500 worth of chips or tokens in any two-hour period, preventing them from losing more than that amount within the "excursion" period. The commission has repeatedly complained that the loss limit hurts the competitiveness of Missouri riverboat casinos compared to those in neighboring states.
According to the Missouri Gaming Commission Annual Report to the General Assembly: Fiscal Year 2003, eleven riverboat casinos operated in Missouri during fiscal year 2003 (July 2002–June 2003). The state has six general markets: St. Louis, Kansas City, Caruthersville, St. Joseph, LaGrange, and Boonville. All of the riverboats remain dockside. Games allowed include slots; blackjack, Red Dog, Pai Gow, mini-baccarat, poker, and other card games; craps; roulette; and several wheel games. Missouri gaming revenue topped $1 billion for the first time during 2001, and reached $1.3 billion during 2003. (See Figure 4.4.) Just over fifty-one million people were admitted to the state's casinos during fiscal year 2003.
Casino operators pay an 18% tax on adjusted gross receipts to the state and a 2% local tax to the home dock city or county. In addition, a $2 admission fee is paid for each patron per excursion. This fee is split evenly between the state and the local jurisdiction. The casinos also pay costs associated with Missouri Gaming Commission (MGC) agents assigned to each casino. According to the MGC the average annual cost was $568,000 per casino during 2003.
During fiscal year 2003 (July 2002–June 2003) total admission fees were $102 million and gaming taxes collected were $261 million. According to the Missouri Riverboat Gaming Association gaming fees and taxes were the fifth-largest source of tax dollars for the state.
The MGC is not limited in the number of licenses it can issue. However, the state's constitution limits river-boat casinos to locations along the Mississippi and Missouri rivers. In 2004 the town of Rockaway Beach in southwestern Missouri was behind a ballot initiative to change the constitution to allow riverboat casinos along
FIGURE 4.4
the White River. The town of fewer than six hundred residents was suffering from economic depression and had hoped that a riverboat casino would bring in much-needed jobs and income. Despite an expensive media campaign waged by the casino's backers, the initiative was rejected by the state's voters in August 2004.
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