Mon February 1, 2010
Kansas Sees Results Of Expanded Gaming Act
Dodge City, Kan. – Two years ago, Kansas lawmakers passed the Expanded Gaming Act, which would legalize gambling at four new casinos, all state-owned. Now that Kansas is facing a $ 400 million dollar budget deficit, it could use the casino revenue more than ever. But the only casino that's opened so far is in Dodge City.
Thanks to the long-running television show Gunsmoke, Dodge City is best known for its gun-slinging cowboys, who liked a good poker game. Today, many of Dodge's cowboys are actually steel cut-outs, and the city has banned gambling houses for more than a century. Until now.
The new Boot Hill Casino and Resort opened on the outskirts of Dodge City a little over a month ago. It has Wild West theme, complete with swinging saloon doors and antique six-shooters.
Jessi McNiece works here, and says it's been packed since the day it opened.
"It's hard to get through," McNiece says, "I mean, there's a big crowd in here today."
The casino has created about 300 new jobs here. McNiece herself lived in Kansas City, and never thought she'd be moving back to her home town.
"I had never even really considered it, to be honest with you. I worked specifically in digital marketing," she says. "And I didn't think opportunities like that would exist back here."
McNiece keeps running into people she knows. Like her aunt, Mary Hall.
"This is my first casino ever. I haven't been to Vegas or anyplace," Hall says. She doesn't gamble, but says it's fun anyway. "I come and just walk around and talk to people, watch over their shoulders. I love to watch the tables - blackjack. Somebody the other night was teaching me how to play craps.
Some of the new patrons are more seasoned gamblers. Wearing a big cowboy hat, and chomping on a cigar, Jesse Urtiaga drove up from Amarillo Texas to play the slots.
"Yes, I sure did," Urtiaga laughs. "So I better win, I better win."
Urtiaga's machine, like every other one in the state, is monitored real-time by a computer 250 miles away in the Kansas Lottery building, in Topeka. That's all part of a unique arrangement, established by the 2007 law. After 14 years of debate, state senator John Vratil says the law finally passed to help the state budget.
"Every little bit helps," Senator Vratil says. "I don't think any legislator wants to raise taxes, and to the extent that we can find other ways of enhancing our revenue, we need to do that."
Other states that have allowed casinos benefit by taxing the casino operators. But Kansas couldn't do that. Its constitution says private companies aren't allowed to own lotteries or gaming operations. Changing the constitution would have taken years, and a voter referendum. Rather than roll the dice, the government decided to set up shop itself.
Ed Van Petten is director of the Kansas Lottery, which took over the administration of the casinos. He says because state money is involved, the lottery's keeping the operation as transparent as possible.
"The financial issues, and the operational issues are much more public than in a normal casino situation in other states," says Van Petten.
Bill Thompson researches casinos and public policy at the University of Nevada - Las Vegas. He says this is a strange setup: the private companies own the buildings, but the state says it owns the slot machines, and even the cards and dice.
"The private operators pay property taxes to the state, and yet the state maintains that the state owns the casino. It's a fiction," Thompson says.
Fiction or not, Kansas will collect 22% of the casino revenue, the local governments receive an additional 3%, and 2% goes to a fund to combat compulsive gambling. This is all in the ballpark of what other states collect from their casinos, a few tax at an even higher rate.
Thompson says the state budget might benefit, but few casinos lead to real economic development.
"50% of the gamblers have to be overnight visitors for it to help the economy. That means people that come from 100 miles or more," Thompson says. "Otherwise it's local residents and the money they're gambling in the casino is money they otherwise would spend at the store. They'd buy a new car . . . or look for other local entertainment, or dine out or things like that. It will be their locally spent dollar that is diverted to the casino, and that doesn't help an economy at all."
The plan allowed for four casinos, each in one region of Kansas. But thanks to the weak economy, the ground hasn't even been broken on three of them. Wyandotte County's proposal is in the hands of the Racing and Gaming Commission, which is doing background research to approve the selected operator. A new proposal for Sumner County, near Wichita, is expected soon.
As for Southeast Kansas, some state representatives are now trying to amend the Expanded Gambling Act to allow for a smaller casino, the size of Dodge City's, to be built there. The bill would also lower the tax rate for racetracks with slot machines.
Back in Dodge City, the second phase of the Boot Hill Casino, a hotel and conference facility, is expected to open in 2012. But residents are already looking to see if the casino will end up drawing tourists to its other attractions.
Like the Boot Hill Museum, a block-long replica of the 19th century town. It was in the Long Branch saloon here that this proposal for casino gambling was first hatched, and the whole point was to help the museum. Bartender Karen Steele says the casino has brought some new visitors.
"Several men had been out there and then they were stopping back through here," Steele says. "They thought it was great, so, we're sure hoping it goes good for us all."
And for its part, the entire town is hoping to live up to its slogan, and convince people to "Get the Heck into Dodge."