Missouri casinos excited about drop of loss-limits - Thursday 6th of November 2008
For Missouri casinos — and their nearby competitors in Illinois — the rules of the games are changing soon.
Missouri casinos no longer will enforce a $500-in-two-hours loss limit after voters approved an initiative Tuesday to lift the restriction.
Missouri casino operators welcomed the change, saying it allows fair competition with casinos in neighboring states that do not cap losses. A lack of a loss limit in Illinois casinos, for example, lured some gamblers across the river — especially out-of-towners and high-rollers.
The change "enables us to compete on a level playing field," said Mack Bradley, a spokesman for Pinnacle Entertainment, which owns Lumière Place, the President Casino and a south St. Louis County casino under construction.
For Illinois casinos, however, the move creates more competition, most noticeably for the Casino Queen, which donated $150,000 to oppose Proposition A. On Wednesday, officials with Casino Queen in East St. Louis declined to discuss the effects of the propositions approval, referring questions to the Illinois Casino Gaming Association.
"We expect that (the loss-limits removal) will have some negative effect," said Tom Swoik, executive director of the association.
But just when the new rule takes effect remains unclear. According to the Secretary of States Office, Proposition A went into effect Tuesday. But the Missouri Gaming Commissions interpretation is different. Spokeswoman LeAnn McCarthy said election results need to be certified by the Secretary of States Office before they take effect. That process is expected to take until early next month, McCarthy said. "We are not going to enforce these rules until the election is certified," she said.
At that time, the commission will start collecting additional taxes on casino revenue to be distributed to public schools. The Missouri auditors office has estimated that schools would get between $105 million and $130 million in new tax revenue.
But critics say that is too ambitious. To achieve that number, they say, the loss-limits removal would have to generate an increased $480 million in new casino revenue — a lofty number.
Andrew Zarnett, a gaming analyst in New York for Deutsche Bank, said the revenue increase is "realistic." Wall Street reacted warmly to the elimination of the loss limit, as stock prices for Pinnacle and Ameristar Casinos increased Wednesday by 6 percent and 4 percent, respectively.
Already, the gambling commission has met with local casinos to discuss the loss-limits removal and other changes, including the elimination of player tracking cards, McCarthy said.
Meanwhile, Proposition A will bring another change to the local casino landscape: It will place a cap on the number of casino licenses at 13 — the 12 current Missouri casinos, plus Pinnacles south St. Louis County location.
Leading up to the election, Pinnacle said the result of Proposition A could play a role in the fate of the President, a riverboat casino near Lacledes Landing. With the cap on licenses, the Presidents license has become a more valued commodity.
But Bradley said Pinnacle is "still a ways down the road from a meaningful decision on the future of the President."
That future, he said, has been complicated by the boats age — more than 100 years — and by its location at a spot that has flooded several times this year.
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