BestCraps.com

Casino At Cape Girardeau Site Would Provide Highest New Revenue, Says Study

Posted on May 25th, 2010

News Sponsored by Online Vegas Casino

Rated 5 Stars by BestCraps.com

Read Review

Visit Casino

Download Software

————————————————

Missouri gambling law says only 13 casinos are allowed in the state as approved by voters in a 2008 statewide referendum. On July 1, Las Vegas-based Pinnacle Entertainment will close its President Casino, and will surrender its casino license, making one casino license open. Regulators of the Missouri Gaming Commission have moved to revoke the President’s license because of inadequate revenue production. In a meeting last week, gaming regulators told attendees composed of potential casino developers and community officials that they are providing casino companies with an economic analysis questionnaire to be accomplished and submitted by the prospective casino developers by July 15.

The analysis would provide information as to the expected cost of investment, the number of gaming positions (the number of slot machines and seats at gaming tables), the job creation aspect, and the projected new revenue for the state and for the city of the casino’s particular location. A market analysis done by the financial staff of Ameristar Casinos Inc. revealed that a casino to be located in Cape Girardeau was seen to be able to produce revenue that would mostly be new, and not drawn from other casinos in the state.

Cape Girardeau is competing with Sugar Creek, Chain of Rocks, Louisiana, Mo, and other sites for that single casino license. Troy Stremming, Ameristar’s senior vice president of governmental relations and public affairs, said since Ameristar’s analysis employs standard assumption and models applied by other casino operators, the results should come out more or less the same.

The analysis showed a casino in Cape Girardeau could possibly make as much as $87 million in gross revenues. When comparing the revenue impact of a Cape Girardeau casino with those of the other proposed sites in Sugar Creek, Missouri, or near Chain of Rocks north of St. Louis, it was found that although the Cape Girardeau gross revenue was the least among the three sites, only a small fraction of the $87 million, or $10 million would be taken from another casino, specifically Harrah’s in Metropolis, Illinois, while a casino at either Sugar Creek or Chain of Rocks would steal a large chunk from the revenues of other existing casinos.

The research disclosed that a Cape Girardeau casino with 1,000 gaming positions could yield $18.3 million in new tax revenue which would all be used by the state to fund education. An additional $5.3 million from the casino’s admission taxes would be shared by the state and the city.

The report also showed that a casino in Sugar Creek having 2,000 gaming positions, although projected to produce $125 million in gross revenues, a big portion of it, or 75 percent would be coming from the gambling market of casinos operating in Kansas City. Only $6.5 million would be the new tax revenues for the state and $1.9 million would be the admission tax revenue.

The 2,000 gaming positions in a Chain of Rocks casino would provide gross revenues of $150 million, with 65 percent taken from casinos in the area of St. Louis. The new casino tax revenue would only be $10.9 million and the new admission tax revenues would be $3.2 million, as reported by the analysis. The Cape Girard City Council has set a special work session on June 3 to hear statements from interested casino developers giving details and reasons that would help city officials choose an investor.

Former state senator Jim Mathewson, chairman of the Missouri Gaming Commission, said he wants to give casino companies every chance to compete for the one available license. He said the commission plans to have already picked an applicant by the end of the year.

He said one important aspect that could weigh heavily would be the ability to provide immediate revenue for the state. Ameristar Casinos Inc. has not said whether it is planning to apply for the 13th casino license. The company has casinos in St. Charles, Mo., Kansas City, Nevada, Nebraska, Colorado, Iowa, Mississippi and Indiana.