This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0615 - Defines gambling device and allows slot machines for use at home if not for gambling
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 2760-07
BILL NO. HCS for SB 615
TYPE: Original
DATE: April 24, 1998
FISCAL SUMMARY
|
ESTIMATED NET EFFECT ON STATE FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| General Revenue | $20,833 | $25,000 | $25,000 |
| Gaming Commission Fund* | ($213,590 to Unknown) | ($171,922 to Unknown) | ($176,254 to Unknown) |
| Compulsive Gamblers Fund** | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
($192,757 to Unknown) | ($146,922 to Unknown) | ($151,254 to Unknown) |
* Subject to appropriation.
** Transfers-in and program costs net to $0.
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| None | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
|
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| Local Government | $0 to ($32,000,000) | $0 to ($32,000,000) | $0 to ($32,000,000) |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 7 pages.
FISCAL ANALYSIS
ASSUMPTION
The Department of Economic Development, Office of Prosecution Services, Office of State Courts Administrator, Attorney General's Office, Department of Revenue, Office of Administration, Budget and Planning, and Department of Elementary and Secondary Education assume this proposal would not fiscally impact their agencies.
The Department of Public Safety, Missouri State Highway Patrol (MSHP) states that the Patrol's Division of Drug and Crime Control (DDCC) will be affected by this proposal. The Gaming Commission and the Gaming Division do not investigate or enforce gambling laws outside of the casinos; therefore, MSHP assumes the DDCC will handle these responsibilities. Because this proposal allows slot machines in the homes for non-gambling uses, MSHP anticipates the use of slot machines in both the home and business settings with the increasing potential that these machines might be used for illegal gaming. DDCC estimates that to effectively investigate, regulate, and enforce these gaming laws, an additional 36 officers and 4 clerk typists would be required. MSHP estimates total costs related to these 40 FTE at $3,104,220 in FY99, $1,940,042 in FY00, and $1,986,135 in FY01. Included in these estimates are standard equipment issued to troopers, and "buy" money to be used in purchasing illegal machines and other undercover investigations related to the gaming laws.
Oversight assumes the MSHP is currently over the maximum number of patrolmen allowed by Section 43.050, RSMo. Therefore, Oversight assumes any additional patrolmen duties would have to be redistributed within existing resources or civilian personnel would have to be utilized.
The Gaming Commission (GAM) states that this proposal introduces a new concept requiring the seller of a slot machine to report the sale to GAM within ten days, and the purchaser of the slot machine to pay a ten dollar fee and register that device with GAM within thirty days. It also makes failure to register any slot machine a class B misdemeanor. GAM assumes this proposal would require them to establish a dedicated team of 10 additional officers to conduct the investigations and enforcement duties necessitated by the private transfer, ownership, registration, and operation of these slot machines. GAM further assumes 2 additional clerk typists would be needed to aid in the registration process.
GAM states the additional troopers would be needed to investigate transfers of slot machines which are reported to them by the seller, but never registered by the purchaser. In addition, as the failure to register is a criminal offense, these troopers would have to prepare and deliver the appropriate UCS's and investigation reports to the prosecutors in the courts of jurisdiction. As any registration process would require the device to possess some unique and distinctive DESCRIPTION (continued)
identifier, such as a serial number, GAM notes it may be necessary for them to develop a system of generating and assigning numbers to slot machines similar to DRX numbers for vehicles assigned by the Department of Revenue. In that eventuality, the actual inspection and tagging of those slot machines would be conducted by the enforcement team members. Although the initial load on this new unit would put the greatest stain on its resources, the registration and enforcement process mandated by this new legislation would be an ongoing responsibility, similar to the current market for used cars.
The optimal composition of this team would include one supervisor of sergeant's rank or above, two assistant supervisors of at least corporal's rank, and seven investigators. This unit would be based out of the Jefferson City Gaming Division headquarters, at least as far as its supervision and administrative responsibilities, but its investigation and enforcement duties would run statewide. The Patrol would be reimbursed for the expense of the team from revenues earmarked for the Gaming Commission's administrative fund, but the Patrol would be responsible to fund the recruitment, training, supply, and assignment of the troopers needed to back fill positions vacated by its members reassigned to this unit of the Gaming Division.
Gaming estimates the total costs related to the 12 additional FTE at $938,518 in FY99, $700,410 in FY00, and $718,085 in FY01. In addition, Gaming estimates total revenues related to the $10 registration fee at $15,000 to $25,000 per year.
Oversight assumes this proposal would require 2 additional investigators and 2 clerk typists, as it allows the Supervisor of Liquor Control to continue to police slot machine activity if they have actual knowledge that the amusement device is used for the purpose of illegal gambling and the licensee knowingly or purposefully participated in the act constituting illegal gambling. Oversight estimates total costs at $213,590, $171,922, and $176,254 in FY99, FY00, and FY01, respectively.
The State Public Defender (SPD) assumes existing staff could provide representation for those 30 to 50 cases arising where indigent persons are accused of the crimes described in this proposal. However, passage of more than one similar proposal would require the SPD to request increased appropriations to cover the cumulative cost of representing the indigent accused.
The Department of Mental Health (DMH) states that they currently contract for outpatient programs for compulsive gamblers and their families. These programs are funded through the Compulsive Gamblers Fund established within DMH by Section 313.835, RSMo. This proposal does not indicate a dollar amount or give a funding formula for municipalities to be submitted to the state for credit to the Compulsive Gamblers Fund; therefore, DMH assumes this proposal is DESCRIPTION (continued)
mainly concerned with the Gaming Commission's jurisdiction over gambling boat operations and will have no fiscal impact on their agency.
Oversight assumes this proposal requires that outpatient centers for compulsive gamblers and their families be funded by appropriation of the general assembly from the Gaming Commission
Fund and from taxes collected and distributed to cities and counties. For fiscal note purposes, Oversight will show this as a possible transfer from the Gaming Commission Fund to the Compulsive Gamblers Fund. In addition, Oversight assumes the admissions fee paid by gambling boat licensees to local governments will now be transferred to the Compulsive Gamblers Fund. According to the Gaming Commission, these admissions were approximately $32,000,000 in FY97. Oversight will range these admission taxes from $0 to $32,000,000.
Oversight further assumes for fiscal note purposes that this proposal would result in $25,000 of revenue due to the $10 registration fees from the sale of slot machines.
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| GENERAL REVENUE | |||
| Revenue - Registration fee | $20,833 | $25,000 | $25,000 |
|
ESTIMATED NET EFFECT | |||
| ON GENERAL REVENUE | $25,000 | $25,000 | $25,000 |
| GAMING COMMISSION FUND | |||
| Costs - Gaming Division | |||
| Personal Service - 4 FTE | ($91,600) | ($112,668) | ($115,485) |
| Fringe Benefits | ($42,796) | ($52,639) | ($53,956) |
| Expense and Equipment | ($79,194) | ($6,615) | ($6,813) |
| Total Costs - Gaming Division | ($213,590) | ($171,922) | ($176,254) |
| Transfer to Compulsive Gamblers Fund | $0 to | $0 to | $0 to |
| (Unknown) | (Unknown) | (Unknown) | |
|
ESTIMATED NET EFFECT ON |
($213,590 to | ($171,922 to | ($176,254 to |
| GAMING COMMISSION FUND* | Unknown) | Unknown) | Unknown) |
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| COMPULSIVE GAMBLERS FUND | |||
| Transfer from Gaming Commission Fund* | $0 to | $0 to | $0 to |
| Unknown | Unknown | Unknown | |
| Admissions tax from political subdivisions | $0 to | $0 to | $0 to |
| $32,000,000 | $32,000,000 | $32,000,000 | |
| Cost - Outpatient Center | |||
| for Compulsive Gamblers | (Unknown) | (Unknown) | (Unknown) |
|
ESTIMATED NET EFFECT ON |
|||
| COMPULSIVE GAMBLERS FUND** | $0 | $0 | $0 |
| * Subject to appropriation | |||
| **Costs are assumed to equal transfers, netting out to zero. | |||
| FISCAL IMPACT - Local Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| POLITICAL SUBDIVISIONS | |||
| Loss - Admissions Tax | $0 to | $0 to | $0 to |
| ($32,000,000) | ($32,000,000) | ($32,000,000) | |
|
ESTIMATED NET EFFECT ON |
$0 to | $0 to | $0 to |
| POLITICAL SUBDIVISIONS | ($32,000,000) | ($32,000,000) | ($32,000,000) |
| FISCAL IMPACT - Small Business | |||
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This proposal makes several changes to excursion gambling boat provisions, including basing administrative penalties on adjusted gross receipts rather than gross receipts; clarifying that tokens will be physical or electronic; lengthening the term for the initial license from one year to 3 to 6 years as set by the Gaming Commission.
The proposal adds commission-approved persons or entities as eligible to supply gambling games or implements, and allows a gambling boat's associated facilities to provide non-gaming areas, food service, and a Missouri-theme gift shop. Current law requires the boat to provide these services. It extends the period of time within which a licensee may request tax reassessment from 10 days to 20 days from the postmark date, specifies actions that constitute a class B misdemeanor, requires, instead of allows, outpatient centers to be established to assist compulsive gamblers, and requires that the centers be funded by appropriation out of the Gaming Commission Fund and taxes. Currently, the centers may be funded from adjusted gross receipts.
The proposal also permits the sale or purchase of a slot machine for operation at the residence of the owner, if such slot machine is not operated for gambling purposes. Within ten days the seller is required to notify the Gaming Commission of the sale of the slot machine, and within thirty days of the purchaser is required to register the slot machine with and submit a ten-dollar registration fee to 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.
SOURCES OF INFORMATION
State Public Defender
Office of State Courts Administrator
Office of Administration
Budget and Planning
Department of Elementary and Secondary Education
Department of Economic Development
Office of Prosecution Services
Attorney General's Office
Gaming Commission
Department of Revenue
Department of Mental Health
Department of Public Safety
Missouri State Highway Patrol
Jeanne Jarrett, CPA
Director
April 24, 1998