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Archive for Tuesday, October 21, 2008

Making the cut

Lawmakers will have to decide how far they should go to encourage expanded gambling in Kansas.

October 21, 2008

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Both local and state lawmakers still may face questions about exactly how eager they are to have state-owned casinos and more slot machines in Kansas.

After failing for many years to gain the Kansas Legislature's approval for slot machines and casino gambling, proponents of expanded gambling saw the measure slide to relatively easy approval last year. In the 2008 session, projected gaming revenue was used to balance the current year's budget. However, actually getting casinos in operation and producing revenue for themselves and the state has been a challenging task.

The latest report is that developers of a casino near the Kansas Speedway are concerned about a smoking ban under consideration in Wyandotte County. It's essential to their casino's success, they say, that smoking be allowed at least on the casino floor. A smoking ban would give riverboat casinos on the Missouri side, which allow smoking, a competitive advantage.

A representative of the Unified Government of Wyandotte County said it was highly likely that an exemption would be granted on the casino floor, but perhaps not in the bars and restaurants in the casino's hotel. An exemption on the smoking ban, officials reason, might give the hotel facilities an unfair advantage over other restaurants in the area, which would be covered by the smoking ban.

Perhaps casinos draw a particularly smoker-friendly crowd, but it always seems odd that developers and public officials don't even entertain the possibility that some people might actually prefer to eat, drink or gamble in a smoke-free atmosphere. The developers say studies indicate casinos that ban smoking see a decline in revenues of 15 to 20 percent, and the bottom line is king.

That bottom line - actually, the state's bottom line - has been a drawback for some potential gaming establishments. State law requires that at least 22 percent of casino revenues and 40 percent of slot-machine revenues be paid to the state. That cut was among the issues cited by a developer that withdrew plans for a southeast Kansas casino as well as by now-closed racetracks that had hoped slot machines would make them profitable.

Despite the fact that the percentages in the state law seem to be deterring expanded gambling, it seems unlikely that state legislators will revisit the legislation, at least in the near future. The revenue the state hoped to realize from expanded gaming was a key component in gaining legislative approval, and legislators likely will be hesitant to reduce the state's cut even to get more gaming in the state.

At any rate, it's almost certain the state's revenue from expanded gambling will be significantly less than projected - even the sale of lottery tickets is dropping - which is bad news for state officials, who currently face a challenging budget situation.

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