Missouri House panel reviews proposals to raise casino taxes and fees

As Missouri looks to shift away from income tax, a Missouri House committee is considering raising revenue from casinos by imposing new taxes and raising admission fees.

House Bill 3533, sponsored by Rep. Jeff Knight, R-Lebanon, would increase taxes and fees that have remained unchanged since casinos commenced operations in Missouri in 1994. If enacted, the bill would affect sports betting platforms and the 13 casinos operating in the state.

The bill contains provisions that would:

Increase admission fees from $2 to $5.50, and require them to be charged bi-hourly. This fee would be adjusted annually for inflation.

Implement a new 1.5 percent "remote wagering access fee," of which the first $35 million collected would go toward the Department of Natural Resources Historic Preservation Revolving Fund.

Impose a 13 percent additional tax on gambling receipts and a 24 percent additional tax on sports wagering receipts.

Designate $15 million in net proceeds from the gaming commission fund to the Department of Natural Resources Historic Preservation Revolving Fund.

"Revenue from lottery and from casinos has all been down, I think maybe currently it's up slightly, but it's been woefully inadequate," Rep. Tim Taylor, R-Bunceton, said in support of the bill. "This is the original fee from way back when, so we haven't addressed it in a long time."

Since the $2-per-person admission fee has remained the same since gambling's legalization in the state, a simple consumer price index adjustment on that original fee would put it at $4.31 today, said Rep. Barry Hovis, R-Whitewater. The admission fee is currently paid for by casinos on behalf of their customers.

"Which means (the casinos) are still getting extra money out of it, but we as a state, we haven't seen as much, so would they be opposed to matching CPI?" Hovis asked. "We're looking to get rid of the income tax and (shift) to a fee-based structure. How do we make up (for) those differences when they start looking at making sure that we're keeping up our fees?"

Mike Winter, a lobbyist with the Missouri Gaming Association, testified in opposition to the bill. Should it pass, it would cost his clients upwards of half a billion dollars, Winter said, especially when the casinos have already seen a loss of revenue caused by slot machines in convenience stores and gas stations.

Plus, the proposed bi-hourly fee model would not just affect the casinos' revenue, but also their operations, he added.

"We came into Missouri when we built our facilities looking for a stable gambling market, and I think that's what we've got," Winter said. "But when you have bills like this ... there may be more favorable markets out there than what this bill would allow Missouri to be."

Winter also raised concerns that the proposed increases to taxes on sports wagering may not be able to be enacted through legislation alone, as sports betting was authorized through a constitutional amendment. In response, committee chair Rep. Jeff Myers, R-Warrenton, said that it would be handled separately.

The other witness there to testify in opposition was Chance Hepola, director of government affairs for Missouri Chamber of Commerce and Industry.

"From our perspective, we just want to be careful on raising some of those fees and taxes on specific industries," Hepola said. "We want to be mindful of picking winners and losers when it comes to certain things that are funding specific projects."

House Bill 3533: Modifies provisions relating to the Missouri Gaming Commission.

Sponsor: Rep. Jeff Knight, R-Lebanon.