Analysis of Missouri Casino Gaming

Nearly 24 million people visited Missouri casinos during CY 2008 with casino revenues totaling $1.68 billion. Currently, there are twelve casinos that employ 11,658 persons. Casino operators have reinvested almost $3 billion in capital back into their Missouri gaming facilities since 1998, according to the Missouri Gaming Commission. An additional $500,000 in new and expansion projects have been recently completed or currently are underway.

2008 state gaming tax and admission tax:
$52,000,000 admission taxes
$303,000,000 gaming taxes
$355,000,000 state total 2008
Additionally, 2008 host-city (local) gaming tax and admission tax:
$52,000,000 admission taxes
$34,000,000 gaming taxes
$86,000,000 host-city (local) total 2008
$440,000,000 total state and host-city (local) gaming tax and admission tax 2008

At the end of FY 2008, the total gaming and admission taxes paid since 1994 equaled nearly $4.3 billion.

Taxes are calculated in the following manner:
State receives $1 per admission
City receives $1 per admission
State receives 19% of Adjusted Gross Revenue
City receives 2% of Adjusted Gross Revenue

The admission tax initially funds the operations of the state regulatory agency, the Missouri Gaming Commission ($20 million). The residual of the admission tax is used to annually fund veterans programs ($6 million), National Guard scholarships ($4 million), the Early Childhood Education Fund ($26.1 million), and the Missouri College Guarantee Program ($5 million).

The 19% tax on AGR is dedicated to the School Foundation Formula. Since casinos began operating in Missouri in May 1994, casino gaming has generated nearly $2.8 billion for the School Foundation Formula. The state has received $612 million from the admission tax ($1 per admission). The host cities also received $1 per admission, equaling $612 million, plus 2% of the AGR or approximately $315 million, for a total of $927 million.

Casinos also pay sales and property taxes. Unlike most other start-up businesses, casinos are denied property tax abatement and in several locations they represent the largest source of property tax within a community. In addition, many host cities receive additional revenue as part of their lease agreement with the casino companies.

In addition to funding the operations of the Missouri Gaming Commission through the admission fee, Missouri casinos reimburse the State for the full cost of the highway patrolmen who are assigned to the regulatory agency. These reimbursements total approximately $11 million per year.

When gaming was introduced in Missouri, critics warned of a host of social ills that would follow such as a dramatic increase in the number of pathological gamblers, rising crime rates, and cannibalization of other businesses. The gaming firms and state regulators have addressed each of these alleged theories of social costs. The facts simply do not support the allegations. For example, the opponents of gaming allege that casinos do not add economic benefit because casino-related spending is merely the displacement of money that would have been spent elsewhere in the economy. However, a 2002 study found that gaming injected $567 million to the Missouri economy, even after accounting for displaced spending.

The Missouri Department of Mental Health provides free problem gambling treatment for any Missouri resident and their immediate family members. This free treatment is financed through the Compulsive Gamblers Fund, which receives one cent of each admission fee paid by the casino operators to the State. According to the Department, the number of people who received treatment during Fiscal Year 2008 through the Department's program was 347. Another index of the scope of the problem comes from the Missouri Gaming Commission (MGC). MGC has developed a process by which people can exclude themselves from the casinos. At the close of Fiscal Year 2008, approximately 13,110 people have placed themselves on the list of disassociated persons.

Because the gaming industry is concerned that just one problem gambler is too many, the industry has a series of voluntary programs in place to address the issue head-on. Critics of gambling cite anecdotal instances of alleged abusive gambling, but never discuss the issue in the context of 24 million visitors to Missouri's twelve casinos.

In the early years of casino gambling, the critics asserted that casino jobs would be minimum wage and ephemeral. But in fact, in a recent MGA survey of casino employees, 58% of the respondents indicated that their current casino job paid better wages than their previous job.

Some people do not like gambling and it is not sufficient for them to simply avoid it for themselves. Rather, the anti-gambling groups believe that they should try to regulate the behavior of others. However, Missouri's voters have rejected these efforts and affirmed their support for gambling and holding down increases in their taxes in three statewide votes. And according to rankings by the St. Louis Business Journal and the Kansas City Business Journal, gaming venues represent the top four attractions in Kansas City and are five of the top nine in St. Louis. Gaming has indeed become a mainstream activity enjoyed and supported by millions of Missourians.