Illegal slot machines bypass Missouri voters and casino regulations, and reduce state tax revenue

Illegal slot machines bypass Missouri voters and casino regulations, and reduce state tax revenue October 10, 2019

The Missouri Gaming Association (MGA) supports the Missouri Highway Patrol’s investigation into illegal slot machines in gas stations, truck stops and restaurants across the state. In addition, we oppose any legislation that would effectively reward these lawbreakers by legalizing what are being referred to as video lottery terminals but are in essence slot machines. Such bills would expand gambling far beyond what Missouri voters approved when they authorized casinos, which restricted gambling to very specific locations and limited the number of casino licenses in Missouri to thirteen.

Recent news reports suggest that approximately 14,000 of these illegal devices are operating throughout Missouri. That’s almost on the par with the 16,500 machines that are overseen and regulated by the Missouri Gaming Commission in Missouri’s 13 casinos.

If legalized, residents could expect to see video lottery machines — which look and play just like slot machines — on every street corner where a restaurant, bar, convenience store or truck stop is located, and in every city, town and community across the state.

The massive expansion of gambling in Illinois may tempt Missouri legislators who do not understand the full and long-term impact of these machines. Based on the experience of our neighboring state, Missouri can expect to see a significant negative impact on the tax revenue generated by casinos.

In Illinois, for example, state tax revenue from slot machines outside of the casinos has failed to meet projections, and casino receipts have fallen nearly 18 percent since video gaming was introduced there in 2013. According to the Illinois Commission on Government Forecasting and Accountability’s 2019 Wagering in Illinois Report, “Since video gaming began in Fiscal Year 2013, the total adjusted gross revenues of Illinois’ ten casinos have fallen in every subsequent fiscal year. Overall, casino receipts have fallen -17.9% since Fiscal Year 2012.”

Missouri Lottery officials say that illegal gambling machines in Missouri already have diverted an estimated $50 million in tax revenue, and may be impacting casino gaming tax revenue paid to the state and local jurisdictions.

Illegal slot machines and proposed legislation to legalize them would bypass both Missouri voters and the state’s strict casino gambling regulations, established and enforced by the Missouri Gaming Commission. The proposed oversight, regulations and security for these new slot machines are completely inadequate. Busy retailers would be solely responsible for monitoring the machines and preventing underage youth from gambling. Retailers also would not be required to promote responsible gaming nor have any program in place to restrict play for individuals on the gamblers’ self-exclusion list, as Missouri casinos do.

In Missouri, casino taxes are the state’s fifth-largest source of revenue, with thirteen casinos contributing more to the state in gaming tax revenue than all 156,000 Missouri businesses combined pay in corporate income tax. Last year, Missouri casinos generated $369.7 million in state tax revenue and $76.4 million in taxes to local communities. If Missouri experiences a similar decline in revenue as Illinois, Missouri schools, veterans and others stand to lose millions in funding.

We encourage residents concerned about thousands of new slot machines in their communities and on every street corner in Missouri to ask their legislators to crack down on illegal slot machines and vote no on proposed legislation to legalize them in the next legislative session, which starts on January 2020.

Mike Winter

Executive Director
Missouri Gaming Association

ABOUT THE MISSOURI GAMING ASSOCIATION
The Missouri Gaming Association (MGA) is the statewide trade association of the Missouri casino entertainment industry. Founded in 1993, the Missouri Gaming Association works to promote responsible gaming and increase awareness of the economic benefits of casinos in Missouri. The MGA and its casino company members sponsor year-round responsible gaming programs including the 1-888-BETSOFF crisis line and referral service, Project 21 scholarship competition, and Responsible Gaming Awareness Week. For more information, visit www.missouricasinos.org.

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