Scott Moyers of the Southeast Missourian newspaper writes the story. Read it here.

From MOnewshorizonblog.org

Gaming Companies Make Pitch for License

Photo by g-s-h

By DICK ALDRICH
Missouri News Horizon

JEFFERSON CITY, Mo. – With the state’s last riverboat gaming license on the line, three casino developers made their best pitches to the state’s Gaming Commission as the Commission’s chairman repeated that none may get the license.

Isle of Capri Casino made a pitch for a location on the north side of downtown Cape Girardeau, Paragon Gaming said its site on the east side of Kansas City in the small town of Sugar Creek was best, and a group of St. Louis businessmen pushing for a boat called the Casino Celebration said they could attract significant out-of-state business with their site at the Chain of Rocks Bridge on the very northern edge of the city of St. Louis.

A fourth proposal from a group that wanted to build a casino near the confluence of the Missouri and Mississippi Rivers was not present at the meeting. Late Tuesday, lawyers representing the North St. Louis County group sent a letter to the Gaming Commission saying the group was having trouble securing funding for their proposal.

Gaming Commission Chairman James Mathewson said that meant the Commission would not consider the group for license at this time.

“A deadline’s a deadline, and they missed their deadline for this time,” Mathewson said.

Mathewson said the Commission wasn’t prepared to make a decision on what to do with the group’s $50,000 in earnest money they had fronted to the Commission.

The three groups all made presentations about how their casinos would best serve the state. Steve Gallaway of Gaming Market Advisors, a research firm working with Isle of Capri said the Cape Girardeau site would be best because it would serve an area without other gaming opportunities and attract the most new money to the state.

Gallaway said Kansas City and St. Louis markets are saturated with casinos already and instead of bringing new money into the state, most of the business at casinos in those areas would come from other boats in the same area. He said the Isle of Capri would bring in more than $79 million in revenues and draw business from other parts of Missouri as well as Arkansas, Tennessee, Illinois, Indiana and Kentucky. 

Officials with Paragon Gaming’s proposal for Sugar Creek argued that the Kansas City gaming market wasn’t saturated, but stagnant. They produced numbers that showed with every new improvement to casinos in the Kansas City area, business increased. Paragon would seek to draw visitors from the east side of Kansas City and move the center of gaming away from Kansas.

Paragon’s economist, Jim Oberkirsch, said his numbers showed a $34.5 million expansion in the market once the Sugar Creek casino goes online. He said the operation would turn a little more than $97 million in revenues while taking about $50 million in business from neighboring casinos.

Consultants for the Casino Celebration in St. Louis also disputed Gallaway’s numbers saying they would draw business from across the river in Illinois. Dan Farris told the Commission that St. Louis is the seventh largest gaming market in the country. He said his group seeks to capture only about 10 percent of the St. Louis market, but that figures out to be about $121 million in revenues in the first year.     

The casino would sit just across the Mississippi River from three medium-sized Illinois towns: Granite City, Edwardsville and Alton. With support from Illinois patrons and north St. Louis residents, the Casino Celebration group figures to draw in $83 million in new revenues out of their total, with the rest coming from other nearby casino traffic.

Commission members also seemed interested in the casinos’ locations and their ease of access to major highways. Cape Girardeau City Manager Scott Meyer said he would produce a map for the Commission on the route traffic will take to get to the Isle of Capri casino from Interstate 55. Sugar Creek backers stressed the location’s proximity to Highway 291, while the St. Louis group said its casino would be an eighth of a mile south of I-270.

But when push comes to shove, it’s all going to be about money, and which developer has the best financial plan.

“Our staff and our financial people that we trust are going to dig deep into those financial arrangements,” Mathewson said. “I want to make darn sure if we’re going to issue that 13th license, the financial situation is clear in all five Commissioners’ minds before they vote.”

And if the Commission is not clear on all the financial details, Mathewson said they will not issue a license.

“The law is very clear to me on the 13th license,” Mathewson said. “It says you can’t have more than 13 casinos in the state of Missouri. It doesn’t say you have to have 13.”

Missourinet's Ryan Famuliner has the story. Read or listen to it here.

Interesting story from Melissa Miller of the Southeast Missourian. Read it here. MGC's Melissa Stephens is quoted.

You can find the agendas on the Google Calendars on the right side of this page.

The Missouri Gaming Commission regular monthly meeting will be held on Tuesday, October 19th at 4p.m. at the Jefferson City MGC office. The Commission will hear from casino companies and home dock cities/counties on Wednesday, October 20th beginning at 9 a.m. at the Doubletree Hotel in Jefferson City. Each group will get one hour to present their plans to the Commission. The order will be determined the morning of the 20th.

more press coverage from the public hearings.  

The Missouri Gaming Commission has been on the road. This week the Commission was in Cape Girardeau, St.Louis and Sugar Creek to gather public input on the four riverboat gaming casino proposals.

The Commissioners feel it was an excellent way to gather input from both proponents and opponents alike. Here is some of the press coverage.

The Kansas City Star

The St.Louis Post Dispatch

The Southeast Missourian

This story is from Tony Messenger of the St.Louis Post Dispatch-

JEFFERSON CITY • In 2008, Missouri voters cut a
deal with casinos.

Gamblers would no longer be limited to losing $500 every two
hours, as long as some of the additional money generated by the
casinos went to help public schools.

Proposition A was pitched as a school funding mechanism, with
the extra gambling revenue put in a lock box, virtually
guaranteeing more money for education. It passed with 56 percent of
voters saying yes.

Two years later, public schools have been dealt a bad hand,
state Auditor Susan Montee said Thursday.

Because of changes to the law made by the Legislature in 2009,
the additional money generated by casinos because of Proposition A
is no longer guaranteed to be "new" revenue on top of what
lawmakers had already budgeted for schools.

If the provisions voters passed in 2008 were still in effect,
Montee said in her audit, public schools would be getting at least
$20 million more than lawmakers budgeted in the current fiscal
year.

"The money is not being spent the way voters intended," Montee
said. "There should be some confidence that when voters vote
something in, it stays that way."

The audit touches on a long-standing criticism of state casino
and lottery revenue, which has been touted as directing millions of
dollars to classrooms. Critics say the windfall has been
overstated. They argue that as new casino money for schools has
come in, the state has simply reduced other funds it was previously
spending on education.

During the campaign for Proposition A, opponents picked up on
that skepticism, raising suspicions about whether the money would
truly boost total school spending.

At the time, a spokesman for Proposition A called the proposal
"tamper-resistant," but lawmakers found a way to rewrite the
statute.

Montee's audit of the gambling revenue was required by the
proposition. In it, she says the state has followed the law
appropriately, but she takes issue with the changes to the law made
in 2009.

Republican lawmakers, however, dispute Montee's analysis.

They say the Legislature amended the law to make sure the new
casino money was distributed fairly, not to free up school funds
for other purposes. The 2009 changes passed with bipartisan
support.

Sen. Rob Mayer, R-Dexter, the current appropriations chairman in
the Senate, said lawmakers fixed a flaw in Proposition A that would
have allowed much of the new gambling money to bypass many schools
in Missouri — including many in the St. Louis area — because of
quirks in the state's funding formula for education.

Analysis by both the Legislature and the executive branch during
the 2009 session suggested that the gambling money might not be
distributed to education as the writers of Proposition A had
planned.

"When outside groups put things on the ballot, they don't always
understand the intricacies of the appropriations process," said
Rep. Ryan Silvey, R-Kansas City, on Thursday.

In the case of Proposition A, the issue was over how the
additional gambling money would be distributed. Proposition A would
have put any new gambling revenue above the baseline amount that
was collected in 2008 into a special fund.

But the way the referendum was written, the casino money would
have generally favored rural and poor school districts, bypassing
about two-thirds of the districts in St. Louis County.

Lawmakers got rid of the special fund and now put all gambling
revenue into the overall pot of money dedicated to schools.

Mayer said the Legislature acted responsibly and shouldn't
change anything.

"All the money collected from gaming that is supposed to go to
public schools is going to public schools," he said.

Montee's audit doesn't dispute that. But she says voters
expected education funding to rise by the amount of increased money
created by the lack of loss limits. Instead, because of the bad
economy, other sources of education funding were reduced, and the
casino money was used to fill in the gaps.

In 2008, the state spent $4.2 billion on elementary and
secondary education. In the most recent fiscal year, Montee said,
the additional casino revenue created by Proposition A amounted to
about $61 million. But lawmakers budgeted only $40 million more for
education in 2011 than they did in 2008, leaving them $20 million
short of what the original Proposition A would have called for.

That's just the way things had to be, Mayer said. "Because of
the state of the economy, revenue from other sources is down
dramatically, and we've adjusted accordingly."

Silvey said that even if lawmakers had met the original
requirements of Proposition A, there's no guarantee Missouri
schools would have ever seen the additional money.

That's because the governor sometimes withholds money to balance
the budget when the state's revenues are down, as they are this
year. In the current fiscal year, Gov. Jay Nixon has withheld $76
million in school funds, more than the entire total of additional
gambling revenue. Most of that money came from transportation
funds, the Parents as Teachers program and other,
non-classroom-related programs.

The Chairman took time out of his schedule to answer a few questions from Tim Logan of the

St.Louis Post Dispatch. Read the story here.