Fiscal Note - SB 0143 - Prohibits Credit Card Machines on Excursion Gambling Boats
L.R. NO. 0577-01
BILL NO. SB 143
SUBJECT: Gambling; Financial Institutions
TYPE: Original
DATE: January 31, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Gaming Proceeds
for Education Fund (Unknown) (Unknown) (Unknown)
Gaming
Commission Fund (Unknown) (Unknown) (Unknown)
Total Estimated
Net Effect on All
State Funds* (Unknown)* (Unknown)* (Unknown)*
*Expected to exceed ($1,000,000) annually.
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government (Unknown)** (Unknown)** (Unknown)**
**Expected to exceed ($100,000) annually.
FISCAL ANALYSIS
ASSUMPTION
Officials of the Department of Economic Development - Divisions of Finance
and Credit Unions assume that this proposal would have no fiscal impact on
their agencies.
Officials of the Missouri Gaming Commission (GAM) provided estimates obtained
from the Missouri Riverboat Gaming Commission. The estimates are based on
the dollar value of ATM (automated teller machine) transactions, checks
cashed and credit card advances aboard excursion gambling boats in calendar
year 1996. With all these types of transactions prohibited, officials
indicate that there would be a 21% decrease in gaming volume. Officials also
indicate that gaming company payrolls and fringe benefits as well as
purchases from Missouri suppliers would be significantly reduced as a result
of the decline in gaming volume.
Oversight assumes that the current proposal would eliminate ATM's and credit
card advances, but would not eliminate check cashing services. The proposal
states that "automated device that processes financial transactions which
involve credit cards" may not be maintained or operated on excursion gambling
boats. Based on the breakdown of dollars by each type of transaction
provided by the GAM, the estimate for prohibiting ATM's and credit card
advances only as this proposal does would approximate a 14% decrease in
gaming volume. Therefore, based on calendar year 1996 figures, there would
have been a decrease in adjusted gross revenues from approximately $570
million to $490 million, and state gaming tax revenues would have been
reduced from $106 million to $89 million. Host communities (cities and
counties where the riverboats are docked) would have had their share of
gaming tax revenues reduced from $11 million to approximately $9 million.
Officials of the Office of Administration - Division of Budget and Planning
(OA) indicated that the estimate that gaming volume would decrease by 21% if
not only credit card advances and ATM's but check cashing were prohibited
appears high. They also provided projections for FY 1998 for gaming revenues
and related tax revenues.
Oversight assumes that a decrease in gaming revenues and gaming tax revenues
is likely to occur as a result of the removal of ATM's from gambling boats.
Taxes are imposed on gross receipts from gambling at the rate of 20%, with
18% credited to the State's Gaming Proceeds for Education Fund and 2%
credited to the home dock city or county. If the estimates provided by the
Gaming Commission are reasonable, then gaming tax revenues projected for FY
1998 as provided by OA of $143,855,835 would be reduced by 14%, or
$20,139,817, and projected local gaming tax revenues of $15,983,982 would be
reduced by $2,237,757. However, Oversight assumes that this estimate of lost
revenues is likely high. For fiscal note purposes, Oversight has assumed
that the amount of lost tax revenues to both the state and to local
governments is unknown. Oversight also assumes that the number of admissions
to gambling boats could be affected by this proposal. However, any effect on
the State's Gaming Commission Fund and to local governments ($1 per admission
is credited to both this fund and the home dock city or county) is also
unknown. Oversight has assumed that the total loss to state funds would
likely exceed ($1,000,000) annually, and the total loss to local governments
would likely exceed ($100,000) annually. No provision has been made for
potential lost jobs as a result of this proposal.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
GAMING PROCEEDS FOR
EDUCATION FUND
Loss-tax revenues on gaming receipts (Unknown) (Unknown) (Unknown)
GAMING COMMISSION FUND
Loss-decreased admissions to riverboats (Unknown) (Unknown) (Unknown)
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
CITIES AND COUNTIES
Loss
Tax revenues on gaming receipts (Unknown) (Unknown) (Unknown)
Decreased admissions to riverboats (Unknown) (Unknown) (Unknown)
Total loss to cities and counties (Unknown) (Unknown) (Unknown)
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
This proposal would prohibit automated machines that process transactions
that involve credit cards on excursion gambling boats.
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
Department of Economic Development - Divisions of Finance and Credit Unions
Missouri Gaming Commission
Office of Administration
This Fiscal Note is not an official copy and should not be quoted or cited.