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Boats in Moats Legislation

February 27, 1998
By: Lucas Wall
State Capital Bureau

JEFFERSON CITY - As the casino industry polls to determine its support among voters, seven moat-based casinos continue operating while their fate is debated before every branch of state government.

Sen. Ronnie DePasco, D-Kansas City, has introduced a constitutional amendment to allow existing moat casinos to continue operating. The amendment would require voter approval to take effect. If approved, it would prohibit future moat-based casinos.

DePasco, Senate chairman of the Joint Committee on Gaming and Wagering, said the amendment would be considered by the legislature only in a worst case scenario. He said he doesn't think a gaming resolution should be debated this session.

DePasco said he would prefer that the issue be put on the ballot by initiative petition sponsored by the gaming industry. However, he expressed frustration that the industry has not provided him when they said they would either a draft of the petition proposal nor the results of a survey they are conducting.

Michael Ryan, executive director of the Missouri Riverboat Gaming Association, said last week he was not aware of any polling.

James Moody, a lobbyist for President Riverboat Casino in St. Louis, said he has heard about the poll, but his client is not involved because its boat is not in a moat. Rob Stillwell, vice president of corporate communications for Boyd Corporation, which operates Sam's Town Casino in Kansas City, is also aware of the poll, but said his company is not involved.

Other casino-affiliated people refused to provide any information about the survey. Most denied knowledge of its existence. DePasco also would not disclose the poll's sponsor, but said he expected the results two weeks ago.

"I want to see them," DePasco said.

Ryan said it is unlikely the industry will agree on a constitutional amendment because some of the river-based casinos are not interested in a solution. The four river-based casinos stand to profit from having fewer competitors.

To get an initiative petition on the November ballot, the casinos would have to collect more than 100,000 signatures by July 3. Before signatures may be collected, the petition's language must be approved by Secretary of State Rebecca Cook, a process that can take up to a month.

"From a practical matter, if you're talking about going about collecting signatures, you need to get going," said Jim Grebing, Cook's spokesman.

Gov. Mel Carnahan, whose budget relies on casino taxes to partially fund several programs, said he is waiting for the industry to come up with a proposal.

"The question is, if the casino operators put something out, can they put it in a form that the people will pass it?" Carnahan asked. "I don't think there's a great deal of interest in bailing out the casino industry. I don't have much interest in that. I don't think most voters do."

Steve Taylor of the anti-gambling group Casino Watch agreed with the governor.

"Voters aren't sympathetic," Taylor said. "This industry is predatory and has no sympathy for others."

Two legislators with casinos in their regions said the industry stretched the boundaries of what voters approved in 1994.

"We in no way envisioned the gaming industry like it is today," said Rep. Charlie Shields, R-St. Joseph. "They have a very low level of confidence going out for another constitutional amendment to allow the moat concept."

Senate GOP Leader Steve Ehlmann, R-St. Charles, said the casinos were sold to voters as a way to lure tourists and bring back old times of boats sailing along the rivers. Currently no riverboat casino in Missouri actually sails.

"I don't want Las Vegas on the Missouri River, " Ehlmann said. "If there appears to be a lack of support, it's well deserved."

The Missouri Gaming Commission staff charges Flamingo Hilton, Argosy Riverside, Harrah's North Kansas City, Harrah's Maryland Heights, Players Maryland Heights, Kansas City Station, and Sam's Town casinos are in violation of the Missouri Supreme Court's November ruling that games of chance, like slot machines, may be operated only upon the Missouri or Mississippi rivers, as required by the state constitution.

The commission's attempt to initiate disciplinary action against those casinos is tied up in court. Cole County Circuit Judge Byron Kinder ruled the commission's disciplinary procedures are unconstitutional because they require a casino to prove its innocence. Attorney General Jay Nixon has appealed that decision to the Supreme Court.

"At this particular juncture, it's very difficult for the Gaming Commission to move forward," Nixon said.

The commission needs the opportunity to have disciplinary proceedings to determine whether the casinos' licenses should be revoked, he said.

"Unfortunately that process has been undermined by significant litigation efforts by the gaming industry," he said.

While the seven casinos await decisions on their fate, they face the expiration of their licenses. Both Maryland Heights casinos' licenses expire March 10.

Jim Deutsch, who represents Players, said he has every expectation the commission will relicense his client at least temporarily until the legal battles are finished, as it did in January for Kansas City Station's casino.

Paul Zemitzsch of Players said the casino is operating as usual.

"People don't understand what the fuss is about," he said.

Until the Supreme Court rules or their licenses expire, the moat casinos are likely to continue delaying their closing day. Nixon said such delays make the process more frustrating. He filed a motion with the high court Feb. 24 for expedited review of his appeal.

"We're going to continue to plow ahead in a strategy that says let's have open, let's have predictable, and let's have realistic fact-finding so we can determine which boats comply and which ones don't," Nixon said.