Jefferson City. Mo. ? After prolonged debate, the Senate gave initial approval by a narrow margin Tuesday night to legislation that would repeal Missouri’s gambling loss limits, with supporters citing new casino competition from Kansas.

Senate Majority Leader Charlie Shields had pledged earlier in the day to continue debate until the bill reached a vote. He eventually offered a revised version of the bill placing even higher taxes on casinos to get gambling opponents to let the bill reach a vote after more than 12 hours of debate in the past two days.

“I thought about the thousands of jobs at stake in the Kansas City area, I thought about the millions of dollars in state revenue that’s at stake, I thought about the missed opportunity that this body had several years ago when we sent the NASCAR track to the Kansas side,” said Shields, R-St. Joseph, “and I thought about the opportunity for thousands of kids to go to college.”

No-limit gambling

Shields’ bill would repeal a state law that limits casino patrons to losing $500 in a two-hour period. Missouri is the only state with such limits.

He also changed it to levy a new 4.25 percent tax on most casinos. His original proposal was for a 1 percent tax, and earlier this week, he proposed a 2 percent tax. The expanded state revenues would be used to fund a new scholarship available to most Missouri students attending public or private colleges.

The exact amount of the scholarships would depend on how many students apply and how much money is available.

The bill also would limit casino licenses to 16, allowing for three new boats beyond those already in place or being developed. It would stipulate that if one of those licenses ends, a new boat can only exist in the same area as the boat that closed.

Sen. Matt Bartle, R-Lee’s Summit, a gambling opponent, was at the forefront of delaying a vote on the bill. Tuesday night he agreed to let the bill reach a vote with the higher tax increase, in hopes that the tax is too high to pass.

The higher tax also weakened support for the measure from some lawmakers who back the casino industry, but they agreed to let it move forward.

It won first-round approval on a 17-16 vote.

The measure needs a second vote to clear the Senate, and even then, other obstacles remain.

The Missouri Gaming Association said earlier Tuesday that the industry opposes any additional tax higher than 2 percent.

Response to Kansas law

The new element in the debate – and the reason Shields argued critics should give it a chance – is a new Kansas law allowing state-owned “destination” casinos, which some fear will drain customers and the tax revenue they generate from Missouri casinos in the Kansas City and St. Joseph areas.

The gambling industry and the Missouri Gaming Commission, which regulates the casinos, have for years argued that the loss limits put Missouri casinos at a competitive disadvantage with those in surrounding states. Supporters of the repeal also say the limits do little to curb problem gamblers.

“We’re pretty determined to get the loss limits repealed in order that we can compete fairly,” said Mike Winter, a lobbyist for the Missouri Gaming Association. “Our patrons see a lot of requirements currently in place in Missouri as an inconvenience.”

Gambling opponents don’t want to undo loss limits – which they note were part of the ballot measure voters approved to allow casino gambling in 1992 – and raise fears of social costs from expanded gambling.

“Eliminating the loss limit means your people and mine are going to increase their sucker factor by a certain percent,” said Sen. John Loudon, R-Chesterfield. “The money they lose is not going to be spent at other businesses.”

Supporters say Kansas could eventually reap $200 million a year in revenues from the casino legislation. Shields estimated Missouri could lose up to $38 million in state tax revenue from customers flocking to Kansas casinos.

Legislative staff estimated that state revenues could increase by $49 million to $100 million a year from the repeal of loss limits, and Shields said the additional tax could mean about $52 million more. But he questioned whether all that money would materialize with competition from the Kansas market.