Fiscal Note - SB 0274 - Authorizes Off-Track Pari-Mutuel Wagering
L.R. NO. 0898-05
BILL NO. SS for SCS for SB 274 with HCA 1
SUBJECT: Gambling
TYPE: Original
DATE: May 8, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Missouri Horse
Racing Fund $0 $462,021 $1,047,462
Missouri Breeders
Fund $0 $546,000 $1,092,000
Total Estimated
Net Effect on All
State Funds $0 $1,008,021 $2,139,462
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 $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials of the Department of Revenue assume this proposal would not
fiscally impact their agency.
The State Treasurer's Office (STO) did not respond to our fiscal impact
request. Based on their response to a similar proposal, Oversight assumes
this proposal would not fiscally impact STO.
The Department of Elementary and Secondary Education assume this proposal
would have an unknown fiscal impact on their agency and no fiscal impact on
school districts.
Officials of the Office of Administration assume that additional revenue
would be generated as a result of this proposal. They assume that starting
in FY 99, four wagering facilities would be open for 364 days with an average
daily handle of $50,000, making the total annual handle approximately
$72,800,000. The percentage (2%) to be paid to Missouri would result in
income of $1,456,000 starting 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 $1,092,000 starting 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
$728,000 starting in FY 99.
Officials of the Gaming Commission (GAM) assume they would require an
additional fifteen FTE to implement the duties outlined in this proposal,
which would include 5 officers of the Highway Patrol. They would also
request expenses and equipment; to include training, office equipment, and
patrol cars. Oversight assumes based on responses received to a similar
proposal from last session, that 6 FTE would be sufficient to accomplish the
duties outlined in this proposal. The 6 FTE would consist of an Assistant
Division Director, a Security Director, a Licensing Director, a Pari-Mutuel
Director, an Executive Secretary, and an Information Support Coordinator.
They would also request related equipment and expenses for these FTE.
Officials of the Department of Public Safety - Missouri Highway Patrol assume
they would require funding for equipment and expenses, relating to the
purchase and maintenance of five patrol cars for the new officer positions.
Oversight assumes based on responses received to a similar proposal from last
session, that statutory authority currently exists for enforcement of horse
racing facilities, and has not shown any additional costs for this provision.
The Secretary of State (SOS) states that this proposal gives the Missouri
Horse Racing Commission the authority to promulgate administrative rules
setting forth standards for the facilities within which off-track pari-mutuel
wagering will be conducted. SOS anticipates that these rules would require
approximately 30 pages in the Missouri Register and 20 pages in the Code of
State Regulations. SOS estimates the costs for publishing and distributing
these rules would be $1,210 in FY98 only. Oversight assumes SOS could
increase fees to cover additional costs, per Section 536.033 RSMo, and
therefore, will not include any publication costs in the fiscal impact for
the proposal.
Oversight assumes that this proposal would only become effective upon passage
and approval of a constitutional amendment allowing off-track pari-mutuel
wagering. Therefore, this proposal would have no fiscal impact in FY98, and
would only impact the latter half of FY99.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.) (6 Mo.)
MISSOURI HORSE RACING FUND
Income-Gaming Commission
Off-track wagering $0 $728,000 $1,456,000
1% commission on wagers $0 $364,000 $728,000
Cost-Gaming Commission
Personal Service (6 FTE) $0 ($87,727) ($179,840)
Fringe Benefits $0 (25,029) (51,308)
Expense and Equipment $0 (153,223) (177,390)
Total costs - Gaming Commission $0 ($265,979) ($408,538)
Augmenting live racing purses $0 ($364,000) ($728,000)
ESTIMATED NET EFFECT ON
MISSOURI HORSE RACING FUND $0 $462,021 $1,047,462
MISSOURI BREEDERS FUND
Income-Gaming Commission
1.5% commission on wagers $0 $546,000 $1,092,000
ESTIMATED NET EFFECT ON
MISSOURI BREEDERS FUND $0 $546,000 $1,092,000
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
0 0 0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
This proposal gives the Missouri Gaming Commission the power to regulate
off-track pari-mutuel wagering. No person may accept off-track pari-mutuel
wagers for inclusion in an interstate common pari-mutuel pool unless he has
received a license from the Commission to accept such wagers. The Commission
cannot issue a license to accept off-track pari-mutuel wagering unless the
applicant is licensed and runs at least forty-five days of live racing in
Missouri each year. Each day must have an average of eight races.
A 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 are eligible for a license.
Licensees must agree to provide, on the request of the Commission, one and
one-half percent of all commissions on wagers collected by the licensee for
improving the Missouri horse racing industry by augmenting purses for horses
bred in Missouri, and one percent, but not less than one hundred thousand
dollars, for augmenting purses at live races operated by the licensee. The
Commission has full jurisdiction over, and must supervise all off-track
pari-mutuel wagering. This jurisdiction includes the ability to assess
penalties of up to $2,000 per day for violations of this legislation.
Off-track pari-mutuel licensees are prohibited from using off-track
pari-mutuel systems unless the system has been approved by the Commission.
Two percent of the value of the off-track pari-mutuel wagers to be deducted
as a commission on wagers must be paid to the state to fund the activities of
the Gaming Commission.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space. This proposal will result in an increase to total state revenue.
SOURCES OF INFORMATION
Gaming Commission
Office of Administration
Department of Public Safety
Department of Revenue
Department of Elementary & Secondary Education
Secretary of State
NOT RESPONDING: OFFICE OF THE STATE TREASURER
This Fiscal Note is not an official copy and should not be quoted or cited.