This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0793 - Regulation of Licensed Off-Track Pari-Mutuel Wagering
L.R. NO. 2730-04
BILL NO. SCS for SBs 793 & 794
SUBJECT: Horse Racing
TYPE: Original
DATE: February 27, 1996
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Missouri Horse
Racing ($340,005) $440,999 $846,388
Missouri Breeders $0 $624,000 $936,000
Missouri
Elementary and
Secondary
Education
Technology
Training $0 $0 $0
Total Estimated
Net Effect on All
State Funds ($340,005) $1,064,999 $1,782,388
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
None $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Local Government $0 $154,016 $261,280
FISCAL ANALYSIS
ASSUMPTION
Officials of the Office of the State Treasurer and the Department of Public
Safety assume this proposal would not fiscally impact their agency.
Officials of the Department of Revenue assume this proposal would have a
minimal fiscal impact on their agency.
Officials of the Office of Administration assume that additional revenue
would be generated as a result of this proposal. They assume that in FY 98
four wagering facilities would be open for 208 days with an average daily
handle of $50,000; the total annual handle would be approximately
$41,600,000. In FY 99 they assume that four wagering facilities would be
open for 312 days with an average daily handle of $50,000; the total annual
handle would be approximately $62,400,000. The percentage (2%) to be paid to
Missouri would result in income of $832,000 in FY 98, and $1,248,000 in FY
99. The licensing percentage (1.5%) required for use in augmenting horse
racing purses in this state involving Missouri bred horses would result in
$624,000 in FY 98, and $936,000 in FY 99. The licensing percentage (1% but
not less than $100,000) required for use in augmenting purses at the live
races operated by the licensee would result in $416,000 in FY 98, and
$624,000 in FY 99. The percentage (1/2%) required for the newly created
"Missouri Elementary and Secondary Education Technology Training Fund" would
result in $208,000 in FY 98, and $312,000 in FY 99.
Officials of the Department of Elementary and Secondary Education assume that
they would be required to administer the programs funded from the Missouri
Elementary and Secondary Education Technology Training Fund. They assume
that one FTE, plus related equipment and expenses, would be required to
administer the grants funded from this new fund. One Supervisor ($31,968)
would administer the grants from this fund to school districts. Equipment
would include office furniture and EDP equipment. Expenses would include
travel, office supplies, communication and data processing. Oversight has
only shown costs for this FTE in FY 98 and 99, since there will not be any
income in this fund until the second and third year.
Officials of the Gaming Commission assume they would require an additional
seven FTE consisting of an Assistant Division Director, a Security Director,
a Licensing Director, a Pari-Mutuel Director, an Executive Secretary, a
Breeder's Fund Administrator, and an Information Support Coordinator. They
would also request expenses for professional services (photographers,
programmers etc.). Oversight assumes for the purposes of this fiscal note
that the Gaming Commission could fulfill the requirements of this proposal
without the services of a Breeders Fund Administrator as the Gaming
Commission is already administering the Missouri Breeders Fund.
Oversight assumes that this proposal would only become effective upon passage
and approval of a constitutional amendment to allow off-track pari-mutuel
wagering.
FISCAL IMPACT - State Government FY 1997 FY 1998 FY 1999
(10 Mo.)
MISSOURI HORSE RACING FUND
Income-Gaming Commission
Off-track wagering $0 $832,000 $1,248,000
1% commission on wagers $0 $416,000 $624,000
Cost-Gaming Commission
Personal Service (6 FTE) ($139,167) ($171,175) ($175,454)
Fringe Benefits ($42,780) ($52,619) ($53,935)
Expense and Equipment ($158,058) ($167,207) ($172,223)
Total costs - Gaming Commission ($340,005) ($391,001) ($401,612)
Augmenting live racing purses $0 ($416,000) ($624,000)
ESTIMATED NET EFFECT ON
MISSOURI HORSE RACING FUND ($340,005) $440,999 $846,388
MISSOURI BREEDERS FUND
Income-Gaming Commission
1.5% commission on wagers $0 $624,000 $936,000
MISSOURI ELEMENTARY AND
SECONDARY EDUCATION
TECHNOLOGY TRAINING FUND
Income
Off-track wagering $0 $208,000 $312,000
Costs - Department of Elementary
& Secondary Education
Personal Service (1 FTE) $0 ($33,586) ($34,426)
Fringe Benefits $0 ($10,318) ($10,576)
Expense and Equipment $0 ($10,080) ($5,718)
Total costs $0 ($53,984) ($50,720)
Cost
Grants to School Districts $0 ($154,016) ($261,280)
ESTIMATED NET EFFECT ON
MISSOURI ELEMENTARY AND
SECONDARY EDUCATION
TECHNOLOGY TRAINING FUND $0 $0 $0
FISCAL IMPACT - Local Government FY 1997 FY 1998 FY 1999
(10 Mo.)
Income - School Districts
Grants $0 $154,016 $261,280
DESCRIPTION
The Missouri Horse Racing Commission or its successor agency would be given
the power to regulate off-track pari-mutuel wagering. Only persons licensed
by the Commission shall accept off-track pari-mutuel wagers. Each license
would authorize the licensee to accept off-track pari-mutuel wagering; and
would require the licensee to run 21 days of live racing in Missouri during a
45 day period each year they are licensed, and each day would be required to
have 8 races. During the first year a licensee may operate a maximum of 208
simulcast days. During the second year a licensee may operate a maximum of
312 simulcast days. In the third and all subsequent years, the licensee may
operate simulcast year round. The Commission could only license a facility
located on, or on the adjoining property of an excursion gambling boat as
defined in 313.800 RSMo.
A nonrefundable fee of $50,000 is required of all applicants for an off-track
pari-mutuel wagering license and the applicant must pay all investigation
costs. If the investigation costs exceed the total amount of fees paid by
the applicant, the commission may assess additional fees. If the applicant
is denied a license, the applicant is entitled to a refund of the difference
between the application fee and the actual cost of the investigation. Only
Missouri residents would be eligible for a license. A condition of licensing
would be that the licensee agree to provide to the Commission 1.5% of all
wagers collected by the licensee to augment horse racing purses in this state
involving Missouri bred horses; and 1% but not less than $100,000 for
augmenting purses at the live races operated by the licensee.
The Commission has full jurisdiction over and shall supervise all off-track
pari-mutuel wagering. This jurisdiction includes the ability to assess
penalties of up to $2,000 per day for a violation of this act. No off-track
pari-mutuel licensee shall use an off-track pari-mutuel system unless the
system has been approved by the Commission. In order to be approved by the
Commission, a system must meet several guidelines. The percentage of
off-track pari-mutuel wagers to be deducted as a commission on wagers shall
be distributed quarterly as follows:
1. 2% shall be paid to the state.
2. 1/2% shall be paid to the "Missouri Elementary and Secondary
Education Technology Fund", which is created for the purpose of providing
training, instruction and education concerning computers and other advanced
technologies.
3. Remainder to be retained by the licensee, except for the 2 1/2% (1%
of which cannot be less than $100,000) commission on wagers to be paid to
improve horse racing as described above.
Weekly reports of the total amount of money wagered shall be filed with the
Commission.
The operation of an off-track pari-mutuel wagering facility without a license
or accepting wagers other than as permitted by this act would be a Class A
misdemeanor.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Gaming Commission
Office of Administration
State Treasurer
Department of Public Safety
Department of Revenue
Department of Elementary & Secondary Education