Voters across USA speak out on casino issues

Nov 6, 2008 8:15 PM

Staff & Wire Reports | Now that the election day dust has settled, here’s a recap of the significant gaming legislation that were addressed by voters:

Missouri Loss Limit Is Repealed

According to published reports, a referendum in Missouri to repeal the $500 loss limit, increase the gaming tax rate by 1% and cap the number of licenses has passed. As of 94% of the precincts reporting, 56% voted in favor of the referendum.

The loss limit has historically constrained the revenue generation of Missouri casinos in that it is administered by the requirement that all players use a players card. The largest beneficiaries are Ameristar and Pinnacle, which generate considerable percentages of their profits in the state.

Maryland Passes Slots Referendum

As expected, Maryland voters approved a referendum question on adding as many as 15,000 slots across the state, according to the Baltimore Sun. The state will operate with a gaming tax rate of at least 67%, which would be among the highest in the U.S. We believe that the state will pursue the creation of a regulatory body and the issuance of licenses, which has taken 12-24 months in other new jurisdictions.

The result is a positive for the slot suppliers IGT, BYI and WMS and is a modest negative for Penn National. While PENN’s Charles Town, property would be impacted, the company is in position to pursue a license in Cecil County, MD and will likely pursue adding table games in Charles Town.

Colorado Passes Expansive Referendum

Fifty-eight percent of the voters in Colorado approved the referendum to loosen the restrictions on casinos in Black Hawk, Cripple Creek and Central City. The casinos, subject to local approval, will increase the bet limit to $100 from $5, increase the hours of operation and include more table games. This should improve the performance of existing operators, particularly ISLE and ASCA, both of which operate significant casinos in the market. PENN operates a smaller scale casino, which would have a less meaningful impact on PENN’s earnings.

Ohio Voters Defeat Casino Referendum

The referendum to amend the state constitution to permit a $600 million casino in Clinton County, Ohio was defeated by a vote of 63% to 37%. This outcome was in line with expectations of the past several weeks.

The largest beneficiary is PENN, which operates its Lawrenceburg riverboat near Cincinnati and is in the process of completing a $300 million expansion of the property. PNK operates Belterra, which is farther from Cincinnati, but also draws from Louisville and Indianapolis, which also benefit from the limit on supply in the area.

Maine Casino Referendum Headed for Defeat

With 78% of the precincts reporting, the referendum question on permitting a casino in Oxford County reflected 54% opposed and 46% in favor.

While the casino would have offered an incremental slot sale opportunity for the suppliers, it would have had minimal impact on the competitive landscape.

Related Article:
Maryland voters decide to legalize slot machine gambling