COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 4122-06
BILL NO.: HCS for SS for SB 902
SUBJECT: Gambling; Minorities.
TYPE: Original
DATE: April 27, 2000
FISCAL SUMMARY
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| General Revenue | (under $100,000) | (under $100,000) | (under $100,000) |
| Lottery Proceeds for Education | $675,000 | $900,000 | $900,000 |
| Gaming Commission | $85,000 | $0 | $0 |
| Gaming Commission Bingo | ($85,000) | $0 | $0 |
| Early Childhood Development, Education and Care | ($413,333) | ($508,400) | ($521,100) |
| Compulsive Gamblers* | $413,333 | $508,400 | $521,100 |
| Veterans' Commission Capital Improvement Trust* | $0 to ($8,000,000) | $0 to ($8,000,000) | $0 to ($8,000,000) |
| Total Estimated
Net Effect on All State Funds |
$675,000 to ($7,425,000) | $900,000 to ($7,200,000) | $900,000 to ($7,200,000) |
*Subject to Appropriation from the General Assembly.
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 11 pages.
ASSUMPTION
Transferring of unobligated funds from the Gaming Commission Bingo Fund on August 28, 2000 to the Gaming Commission Fund and abolishing the Gaming Commission Bingo Fund on June 30, 2001.
Officials from the Gaming Commission assume the balance at August 28, 2000 that will be transferred from the Gaming Commission Bingo Fund to the Gaming Commission Fund will be between $85,000 to $90,000.
According to the monthly fund activity report, published by the State Treasurer's Office, the balance of the Gaming Commission Bingo Fund at March 31, 2000 was $105,000, however, additional expenditures were anticipated. Oversight assumes the balance of the fund at the time of the conversion will be roughly $85,000.
Expands the prizes that the Lottery Commission may give away - from Missouri made products to products made in the United States but sold in Missouri.
Officials from the Lottery Commission (LOT) assume this change will allow them to offer many alternative products as prizes that they have not been allowed to offer previously. The LOT assumes these other products would generate an additional $3 million annually in lottery
ASSUMPTION (continued)
sales, with the gross profit margin of $900,000 being contributed to the Lottery Proceeds for
Education Fund.
Requires excursion gambling boat licensees to develop a system that allows patrons the option to prohibit the licensees from using identifying information for marketing purposes.
Oversight assumes this part of the proposal will not fiscally impact the state.
Redirects 1 cent of the two dollar admission fee paid to the Gaming
Commission to the "Compulsive Gamblers Fund"
Officials from the Department of Revenue (DOR) stated this proposal provides that one cent of each dollar of the excursion boat admission fee deposited to the Gaming Commission Fund is to be appropriated to the Compulsive Gamblers Fund. It also allows for the establishment of programs to provide treatment, prevention and education services for compulsive gambling to be funded by appropriations from the Compulsive Gamblers Fund. The DOR assumes there is little or no administrative impact to their agency.
The Missouri Gaming Commission (GAM) stated this proposal would provide a stable source of funding to combat problem gambling. The GAM estimates the amount of revenue that would be directed to the Compulsive Gamblers Fund in FY 2001 as a range of $0 to $496,000. In FY 2002, the amount is estimated to be $0 to $508,400, and in FY 2003, the amount is estimated to be $0 to $521,100. In its estimates, the GAM assumed an annual increase in admissions consistent with current inflationary levels of approximately 2.5 percent.
In response to similar legislation from this year, officials from the Department of Mental Health (DMH) stated they currently contract for compulsive gambling services. These programs are funded through the Compulsive Gamblers Fund and if the DMH receives this funding, compulsive gambling programming will be expanded.
In addition to the expansion of treatment services, compulsive gambling prevention services will be provided. The DMH used the estimates determined by the Gaming Commission for potential funds available to the Compulsive Gamblers Fund from this proposal.
Officials from the Department of Social Services assumed this part of the proposal will not fiscally impact their agency.
ASSUMPTION (continued)
In response to similar legislation from this year, officials from the Department of Elementary
and Secondary Education stated this part of the proposal may reduce the amount of moneys transferred into the Early Childhood Development, Education and Care Fund, and distributed through the Missouri Preschool Program. The amount of the reduction is not known since it would be subject to appropriation.
Oversight assumes the Gaming Commission and all related parties could implement the voluntary exclusion provision of this proposal with existing resources.
Various sections including lottery contractors or vendors must award at least 10% of subcontracts to minority businesses until 2005, electronic tokens,
affirmative action plan, gambling games and implements may be purchased from any vendor approved by the Gaming Commission, clarifying language to deny a license for failure to meet standards, surety bonds, time length extended for casinos to appeal a gross receipts tax imposed by the Gaming Commission, prohibiting anyone under 21 from wagering, and presenting false identifications.
In response to similar legislation from this year, officials from the Gaming Commission (GAM) stated these proposals would change, clarify, and improve language in the riverboat gambling act. The GAM assumes they will not be fiscally impacted by this part of the legislation.
In response to similar legislation from this year, officials from the Lottery Commission (LOT) state although the statutory requirements mandating 10% of lottery contracts go to minority-owned businesses and 5% to women-owned business expired on January 1, 2000, they have continued to work to meet those goals. The Lottery spends approximately $3,200,000 annually with minority-owned businesses and $1,600,000 with women-owned businesses. The LOT assumes no fiscal impact as they continue this program.
The Office of the State Public Defender (SPD) stated this part of the proposal creates the crime of assisting a person less than 21 years of age to make a wager or to enter a gambling boat. The SPD assumes that existing staff could provide representation for those 25-50 cases arising where
indigent persons were charged. However, they state, passage of more than one similar bill would require the State Public Defender System to request increased appropriations to cover cumulative costs of representing the indigent accused in the additional cases.
ASSUMPTION (continued)
In response to a similar proposal from this year, officials from the Department of Corrections (DOC) stated supervision by the DOC through probation or incarceration would result in some
additional costs, but it is assumed that the impact would be $0, or a minimal amount.
Officials from the Missouri Highway Patrol, the Office of the State Courts Administrator and the Office of Prosecution Services assume this part of the proposal will not fiscally impact their respective agencies.
Officials from the Office of Secretary of State (SOS) assume there would be costs due to additional publishing duties related to the Gaming Commission's authority to promulgate rules, regulations, and forms. SOS estimates the division could require approximately 12 new pages of regulations in the Code of State Regulations at a cost of $26.50 per page, and 18 new pages in the Missouri Register at a cost of $22.50 per page. Costs due to this proposal is estimated to be $723, the actual fiscal impact would be dependent upon the actual rule-making authority and may be more or less. Financial impact in subsequent fiscal years would depend entirely on the number, length, and frequency of the rules filed, amended, rescinded, or withdrawn. SOS does not anticipate the need for additional staff as a result of this proposal; however, the enactment of more than one similar proposal may, in the aggregate, necessitate additional staff.
Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.
Oversight assumes GAM will seek prosecution where applicable and the impact of this proposed legislation is unknown, but should be less than $100,000 per year due to supervision or incarceration costs to the Department of Corrections for the few expected offenders. Oversight also assumes the electronic tokens will not increase gambling boat admissions or winnings.
Expands appropriations that can be made from the Missouri Veterans' Commission Capital Improvement Trust Fund from $2 million to $10 million to be used for veterans' memorials in the state.
Officials from the Missouri Veterans' Commission (VET) assumes this proposal would require one additional FTE to monitor and manage the grants program for the duration of the 4 year program. A Grant specialist (at $40,000 annually) with necessary expense and equipment was requested. The VET also assumed that an additional $400,000 would be necessary for one-time
ASSUMPTION (continued)
administrative costs over the duration of the grant program.
Oversight assumes the VET will not require the additional FTE, and has ranged the impact of this part of the proposal from $0 to an additional $8 million per year, subject to appropriation from the General Assembly.
Excursion Gambling Boats offering child care services within their facilities.
The Gaming Commission and the Missouri Highway Patrol assume this proposal will not fiscally impact their agencies, however, this proposal would impact the two existing child care providers at riverboat casinos. Currently, existing child care facilities associated with gaming licensees in the state (Kids Quest in Kansas City Station and Planet 4 Kidz in Maryland Heights) are independent small businesses operating under contract with the riverboat gaming companies.
The Department of Revenue and the Department of Social Services assumed this proposal will not fiscally impact their respective agencies.
Oversight assumes the Department of Health will be able to license the existing (and future) child care facilities at excursion gambling boats with existing resources.
FISCAL IMPACT - State Government FY 2001 FY 2002 FY 2003
(10 Mo.)
GENERAL REVENUE FUND
Costs - Department of Corrections
Supervision or incarceration (unknown) (unknown) (unknown)
of convicted offenders
ESTIMATED NET EFFECT ON (Under (Under (Under
GENERAL REVENUE FUND $100,000) $100,000) $100,000
LOTTERY PROCEED FOR EDUCATION FUND
Revenue - Lottery Commission
Increased sales from alternative prizes $675,000 $900,000 $900,000
ESTIMATED NET EFFECT TO LOTTERY
PROCEEDS FOR EDUCATION $675,000 $900,000 $900,000
FISCAL IMPACT - State Government FY 2001 FY 2002 FY 2003
(continued) (10 Mo.)
GAMING COMMISSION FUND
Revenue - Gaming Commission
Transfer of the Bingo Fund $85,000 $0 $0
ESTIMATED NET EFFECT ON
GAMING COMMISSION FUND $85,000 $0 $0
GAMING COMMISSION BINGO FUND
Loss - Transfer to Gaming Commission Fund ($85,000) $0 $0
ESTIMATED NET EFFECT TO THE
GAMING COMMISSION BINGO FUND ($85,000) $0 $0
EARLY CHILDHOOD DEVELOPMENT,
EDUCATION AND CARE FUND
Loss - transfer of 1% of admissions revenue
to the Compulsive Gamblers Fund ($413,333) ($508,400) ($521,100)
ESTIMATED NET EFFECT TO THE
EARLY CHILDHOOD DEVELOPMENT,
EDUCATION AND CARE FUND ($413,333) ($508,400) ($521,100)
COMPULSIVE GAMBLERS FUND
Income - transfer of 1% of
admissions revenues $413,333 $508,400 $521,100
ESTIMATED NET EFFECT TO THE
COMPULSIVE GAMBLERS FUND $413,333 $508,400 $521,100
SUBJECT TO APPROPRIATION
FISCAL IMPACT - State Government FY 2001 FY 2002 FY 2003
(continued) (10 Mo.)
VETERANS COMMISSION CAPITAL
IMPROVEMENT TRUST FUND
Costs - Additional appropriations $0 to $0 to $0 to
for veterans' memorials in the state ($8,000,000) ($8,000,000) ($8,000,000)
ESTIMATED NET EFFECT ON THE
VETERANS COMMISSION CAPITAL $0 TO $0 TO $0 TO
IMPROVEMENT TRUST FUND ($8,000,000) ($8,000,000) ($8,000,000)
SUBJECT TO APPROPRIATION
FISCAL IMPACT - Local Government FY 2001 FY 2002 FY 2003
(10 Mo.)
$0 $0 $0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
The proposal transfers all money in the Gaming Commission Bingo Fund as of August 28, 2000, into the Gaming Commission Fund and effectively abolishes the Bingo Fund at the end of Fiscal Year 2001.
The proposal also expands the prizes that the Lottery Commission may give away from Missouri made products to products made in the United States but sold in Missouri.
This proposal makes several modifications to the law relating to licensed gaming activities.
In current law, lottery contractors or vendors must award at least 10% of subcontracts to minority
business. This act extends that requirement until 2005.
DESCRIPTION (continued)
Any money used for gambling may be converted to electronic tokens as well as physical tokens.
Requires excursion gambling boat licensees to develop a system that allows patrons the option to prohibit the licensees from using identifying information for marketing purposes.
Applicants for a license or renewal of a license to operate an excursion gambling boat must provide an affirmative action plan to achieve maximum employment of minorities and maximum procurement of goods and services from minority contractors.
Gambling games and implements may be purchased from any vendor approved by the Gaming Commission instead of only licensed vendors. A licensed facility may not sell or give away gambling games or implements without the prior approval of the Gaming Commission.
This act clarifies the right of the Gaming Commission to deny a license to any person applying for a license or license renewal for failure to meet any of the standards set forth in section 313.812, RSMo.
The coverage provided by a surety bond posted by a licensed gaming facility is expanded to guarantee that a licensee will complete any proposed modifications to the facility within 4 years of August 28, 2000. Failure to complete any proposed modifications to the facility may result in
non-renewal of a gaming license.
This proposal makes it unlawful for a person to present false identification to gain entrance to an excursion gambling boat, cash a check, or verify that such person is legally entitled to be present on the excursion gambling boat. Such violations will be class B misdemeanors.
This proposal authorizes the General Assembly to redirect one cent of the two dollar admission fee paid to the Gaming Commission to the credit of the "Compulsive Gamblers Fund". The services funded by this fee have been expanded to include a variety of programs established to prevent compulsive gambling.
This proposal also allows individuals to voluntarily exclude themselves from excursion gambling boats, thereby electing to expose themselves to a conviction of trespassing in the first degree and full forfeiture of any gambling chips, tokens or electronic gaming credits in their possession.
In current law, a tax of 20% is imposed on the adjusted gross receipts of a licensed gambling facility. If the Gaming Commission has reason to believe that there may be some disparity between the amount due and the payment made by a licensee, then the amount due may be adjusted to reflect the payment due as determined by the Commission. This act extends the
DESCRIPTION (continued)
amount of time available to a licensee to appeal the adjustment made by the Commission from 10 to 20 days.
This act prohibits anyone under 21 years of age from wagering at a licensed gaming facility. This act also prohibits assisting a person under 21 to make a wager, and permitting anyone under 21 to make a wager. Anyone violating this law for the first time is guilty of a class "B" misdemeanor. Second and subsequent offenses constitute a class "A" misdemeanor.
This proposal makes it a Class D felony to make false statements of a material fact to the Missouri Gaming Commission.
This proposal expands the appropriations that can be made from the Missouri Veterans Commission Capital Improvement Trust Fund from two million to ten million dollars to be used as a match fund for the new construction or renovation of facilities dedicated as veterans' memorials in the state. The deadline for applications applying for these funds has been extended from July 1, 2000 to July 1, 2004.
This proposal changes the annual date that the Gaming Commission must report to the General Assembly from every January 15th, to every October 1st and expands the issues that the commission must address in its report.
This proposal would also prohibit any operator of an excursion gambling boat in Missouri from providing child care service for anyone other than its own employees, unless such child care is:
(1) licensed by the Department of Health; and
(2) the area where child care services are offered is a minimum of 8,000 square feet.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Missouri Gaming Commission
Missouri Lottery Commission
Office of Prosecution Services
Office of the State Public Defender
Office of the State Courts Administrator
Missouri Highway Patrol
Department of Corrections
Office of the Secretary of State
Department of Mental Health
Department of Revenue
Department of Elementary and Secondary Education
Missouri Veteran's Commission
Department of Social Services
Jeanne Jarrett, CPA
Director
April 27, 2000