|
Updated October 4, 2002
States Look to Gamblers to Boost Sagging Budgets
September 2002 Update
It may be just another roll of the dice, but more than a dozen states considered or enacted gambling expansion this year to close budget gaps.
Over the past several decades, all but two states-Hawaii and Utah-have authorized at least one form of gaming. And as states now struggle with lower than expected revenues and spending overruns, tapping into gambling may be seen as a relatively painless way to find new money. Consumers spent $61.4 billion on gambling nationwide in 2000, and taxes on gambling added about $26.8 billion to state coffers in 2000, according to Christiansen Capital Advisers LLC, a firm that compiles gaming statistics.
State Action, November Ballot Measures
New York led the way in gambling expansion in October 2001 by legalizing additional Indian tribal casinos, participation in a multistate lottery and video gaming at horse tracks.
Riverboat casinos in Indiana can remain dockside since House Bill 1001 was signed into law. The law sets graduated tax rates on adjusted gross receipts for dockside riverboat casinos ranging from 15 percent to 35 percent, depending on casino revenue levels. The law also raises the tax rate for riverboat casinos that cruise to 22.5 percent (from 20 percent).
As of mid-June, Illinois House Bill 4904/Senate Bill 2059 were in committee; they would increase casino taxes by 5 percent.
On the lottery side, Maryland approved a multi-jurisdictional lottery, and Washington will offer the Big Game lottery game. Ohio plans to participate in a multistate lottery game despite a lawsuit filed to block it.
A number of states have gambling related measures on the November 2002 ballot. Arizona voters will consider three Indian tribal gaming initiatives. Idaho also has an Indian tribal gaming initiative on the ballot. In Tennessee, the ballot includes a referendum for a constitutional amendment to allow a state lottery. Arkansas and Nebraska also may have gaming ballot measures, but the measures have not yet qualified.
Measures That Died
Despite their revenue potential, gambling measures often face brisk opposition. Many states considered but did not pass gambling measures in their 2002 sessions.
In Missouri, where the state had a $520 million budget gap for the 2002 fiscal year, the governor proposed increasing the adjusted gross receipts tax, primarily assessed on riverboat gaming, by 2 percent. He also proposed increasing riverboat gaming boarding fees by $1, legalizing a new keno-type lottery game, and removing the $500 loss limit provision. Currently, gamblers are not allowed to lose more than $500 per riverboat excursion.
Facing a $1.25 billion budget gap for the 2001-02 biennium, Washington deliberated a number of gaming-related measures. The governor's budget proposed a 10 percent statewide gambling tax. A Senate bill would have allowed card rooms and charitable organizations such as bingo halls the same types of gambling allowed at Indian casinos, including electronic gaming devices.
Within the gaming industry, devices like slot machines and video poker show extraordinary growth. Many horse and dog racetracks want to install gaming devices to boost flagging revenues. Kansas, Kentucky and Maryland considered bills that would allow racetracks to install video gaming devices, and in Arizona, a legislative referendum was introduced. The Kansas bill also would have allowed the devices at bars and tourism-oriented nonprofit organizations.
In terms of casino activity, Hawaii considered allowing a casino resort in Oahu. A Nebraska legislative referendum was introduced to authorize Indian tribal gambling and development of casinos within two miles of the border of neighboring states with casinos.
Six Minnesota House gambling bills were voted down that would have allowed video gaming devices at racetracks, a state-run casino and legalized sports betting.
The Pennsylvania governor proposed multistate lottery participation.
Debate about the economic and social validity of gambling continues, but its role as a revenue source is receiving particular attention this year as other state revenue sources falter.
 Economic Development & Trade
Visitor counts for this page. |
