Casino royale

Legislation is moving quickly through the Missouri General Assembly that could turn fraternal lodges and halls around the state into untaxed mini-casinos.

Introduced last week by Sugar Creek Democrat Rep. Ray Salva, the measure would allow any fraternal, veterans, religious and other organization licensed by the Missouri Gaming Commission for bingo games to also offer one Class II slot machine for each 40 people on its membership rolls.

“I don’t think there’s any opposition to it,” said Rep. David Day, chairman of the House veteran’s committee that heard testimony on the measure Tuesday. The Dixon, Mo., Republican said he hopes to send the measure to the House floor for debate as early as next week.

The measure appears to have bi-partisan support including co-sponsors Day and majority floor leader Rep. Steven Tilley.
On Tuesday several fraternal organizations testified for the measure, but Day said no casino industry representatives spoke up.

Troy Stremming, an executive with Ameristar Kansas City Casino and Hotel and a lobbyist for the Missouri Gaming Association, said the casino industry does not favor the measure but also said it hadn’t paid much attention to it.

“I’m surprised it’s gaining momentum,” said Stremming.

“From a competitive standpoint I’m not worried about a couple of machines in an American Legion hall,” he added.
“But you’re talking about spreading hundreds if not thousands of machines around the state…without regulation” by the state on the premises like casinos must have.

“It doesn’t make a lot of sense,” he said.
The Gaming Commission has reported 384 bingo organizations were licensed last year. If each averaged 80 members, the measure could authorize as many as 768 slots statewide. That’s more than the 570 currently on the gaming floor at the Frontier Casino in St. Joseph, Mo.

Like bingo, the measure would impose no state tax on the games. “The purpose…is to help the not-for-profit groups,” said Day. “Taxing them certainly doesn’t help them.”

Under the measure, gambling revenues would be audited by the state to ensure the money went into the organizations’ charitable programs.
“Instead of sending the profits to Las Vegas, 100 percent of the profits are going to stay right here in Missouri in the local communities,” said Salva.

Players shouldn’t expect to strike it rich in an American Legion hall, however.

Also like the current bingo law, the bill imposes a daily prize cap of $3,600 on each gaming location, with no more than one daily top slot prize awarded of no more than $500.
However, the legislation does not make clear how that $3,600 cap would be calculated. Slot machines typically award small jackpots _ often less than the amount of the wager _ as frequently as every two or three spins.

If all of those little jackpots were tallied up, the cap could be quickly reached each day.
Salva’s measure would authorize independent contractors to manage the games in much the same way “slot route” operators in Nevada manage gambling devices in grocery and convenience stores there.

Auditors with the state’s Oversight Division estimate passage would require the hiring of 16 additional gaming commission employees plus other regulatory changes at an estimated annual cost of around $1.3 million.

The auditors also noted fraternal slots also might draw away traditional bingo players, slashing the state’s annual $2.1 million in bingo taxes on game suppliers by as much as 25 percent.

Auditors cautioned that sponsoring organizations’ own members might also be attracted away from heavily taxed riverboat casinos, putting downward pressure on those tax collections as well.

Class II electronic games look and play like traditional slot machines, but the odds and outcomes are based on fast-paced bingo programming that actually pits computer-linked players against each other.

Most Class II devices in the U.S. are found in tribal casinos, including an estimated 500 currently in play at the 7th Street Casino in Kansas City, Kan.