Slot machine gambling is seen as the only source of new revenue that could support property tax reform even as observers note that once slots are jumpstarted, the game is very likely to slash the earnings currently being made by the state lottery.
The AP has noted that in Illinois, Iowa and Michigan, lottery revenues dropped for many years after casinos were opened. Lottery earnings only climbed back up after lotteries expanded their offerings.
Still, some Pennsylvania revenue officials maintain that there are different folks for different games so the slots being opened might have only a slight or negligible effect on the lottery.
Analysts are calling on the officials to play the market very carefully as revenues from lotteries and slots are allocated for separate beneficiaries.
While lottery sales are for senior citizen programs, slots revenues are for public education. The other game’s loss may be another game’s gain, but beneficiaries can be gravely affected.
Hence, Pennsylvania gaming authorities are being asked by the analysts to consider what other states have done – increase the promotion of the old game to coincide with the introduction of the new one so the market of the old game will stay, without sacrificing the market of the new game, which could promote for itself by merely being a new offering.
A bill allowing slot machines at both Indiana Downs and Hoosier Park passed the first barrier on Wednesday, February 14th as it was approved via a vote by the House Public Policy Committee. The result of the vote reveals that 9 are in favor of the bill while 3 are against it.
House Bill 1835, authored by Trent Van Haaften, will allow up to 2,500 machines for both race track locations. The bill will require these race tracks to pay $75 million as franchise fees. In addition, when each slot facility is operational, each track will pay another 32.5% tax revenue of up to $150 million. Moreover, when the tax receipts surpass $150 million, the tax on revenue will further increase to 37.5%. At present, the racing industry receives an annual subsidy of $27 million from riverboat tax revenues.
House Bill 1835 will go to the Indiana House for further study and consideration. State racing stakeholders have tried to pass slots legislation for the last several years, but failed. In 2006, for instance, slot legislation bills were filed, but did not even make it to a committee hearing.
On March 29, 2007, with the promise of a potential cash windfall intended for tax relief, the state senate in Indiana voted 27-21 last Thursday to permit slot machines at 2 horse racing tracks in Indiana.
House Bill 1835, which was advertised by its supporters as the answer to the dwindling customers at the racing tracks, would permit the Hoosier Park in Anderson and the Indiana Downs in Shelbyville to shell out $400 million for the licensing fee, which will allow them to put up around 1,500 slot machines.
Lawmakers are considering the potential money source as the long awaited answer for a property tax relief plan and the suggestion to sponsor research money grants intended for the scientific industries in the state. The scientific goal was a part of Gov. Mitch Daniel’s plans to put the Hoosier Lottery on the lease that has been languishing in the Indiana House, which was primarily controlled by Democrats.
House Bill 1835, which will be sent back to the House of Representatives, will also allow the Majestic Casino to keep their own options open to relocate in the city of Gary. Majestic Casino owner, Don Barden, has also related the option to the city leaders.
He cannot take his casino licenses outside of Gary unless he convinces the lawmakers to modify the state law. The law will also permit riverboat casino from the regulation that they should always maintain a working riverboat engine, which can allow the company to save some money and reduce employees.
U.S. Sen. George Voinovich is ready to battle again with gambling proponents who want to expand legalized gambling in the state but warned that this time the foe is much stronger.
Voinovich, who opposes putting any proposal for slots machines in Ohio on the Nov. 7 ballot. “I’m opposed to the devastation it causes families,” he said. “The divorce, bankruptcy, suicide, embezzlement…the family is the most important institution we have and it’s being attacked on all sides.”
Voinovich cautioned voters that only people running the slots machines will benefit in the long run because of the billions of dollars that will be lost in state revenue and programs.
“They’re trying to pass this off as something good for higher education, and it’s not,” he said. “Is this really the way we want to raise money for higher education?”
The last time he faced off against gambling proponents was in 1996 as governor. Voters shot down a proposal for casinos in Ohio with a 68 percent to 32 percent vote, despite the fact that proponents raised $8 million while those opposed only raise about $1 million.
This time around the slot machine backers are starting with about $15 million, much of it to be used for a television advertising campaign. Voinovich hopes to raise about $1.5 million in the fight, but asks that others step up and voice their opposition on Election Day.
“People would be so much better off spending their money on automobiles and other durable goods,” he said.