Limiting Casino Competition
A committee in the Missouri House has heard a bill to keep the Missouri Gaming Commission from closing the President Casino (or any other casino) on “purely economic grounds.” The testimony makes clear the Kafkaesque bureaucratic nightmare into which the commission has placed the President Casino:
Some House lawmakers said the idea of “inadequate declining performance” seemed subjective and was a hard standard to interpret.
Rep. Vicki Englund, D-St. Louis County, questioned how the commission evaluates casino’s performance and asked lobbyist Jim McNichols, who testified on the commission’s behalf to explain how casinos could be expected to meet standards when they weren’t explicitly provided with standards to comply with.
McNichols said the commission works hard to involve casinos in the rulemaking process.
The Missouri Gaming Commission opposes the bill, but McNichols said he couldn’t speak to the specifics of the President Casino case because there was a pending legal matter.
This may strike some people as a crazy idea, but I think it should be up to the owners of a business to decide whether it lacks sufficient revenue to justify operating, not the decision of a government commission with no set standards by which it must abide. And, of course, if the President is forced to close, it is not only the casino’s owners, employees, and patrons that would suffer, but also gamblers at other casinos. Following the decrease in competition, casinos would be able to pay out a lower amount in winnings at the margin.
Missouri Gaming Commission Executive Director Gene McNary got right to the heart of the matter in his written testimony when he wrote that passing the bill to keep the President Casino open would “neuter the commission and, in effect, take away our ability to regulate Missouri’s gaming industry.” I doubt he shared my view that this would be a positive development, however.
The casino is scheduled for a hull inspection this summer that it isn’t likely to pass. The Commission, to my understanding, is limited by statute to cap the number of licenses at 13. They are currently soliciting three other bids for that license from casinos wanting to open in KC, North St. Louis, and Cape.
Comment by Eapen Thampy — February 23, 2010 @ 6:22 p.m.
Were you here in 2008 when Missouri passed Proposition A?
Comment by Eapen Thampy — February 23, 2010 @ 7:35 p.m.
If the casino is closed for safety reasons, I have much less of a problem with it, but they should have the opportunity to make the necessary repairs and reopen. I was not aware of any such cap on the number of casinos, but that is completely arbitrary and should be eliminated; competition should regulate the number of casinos not government fiat.
Comment by John Payne — February 23, 2010 @ 6:53 p.m.
Ah yes, I remember that now. I voted against it then, and I was pretty disappointed that it passed.
Comment by John Payne — February 23, 2010 @ 8:10 p.m.
Casinos are probably the number one example of why I am not now, never have been, and never will be a Libertarian. I believe, and I readily admit this is unproveable, that legalized gambling does far more harm to society than illegal gambling does. While I don’t think simple games of poker or Super Bowl bets should be illegal (even in the totally unenforced manner they currently are illegal), I agree the state has a role in regulating how casinos operate in Missouri.
I remember voting against allowing casinos back around 1995. I would vote the same way again. Even most of the small number of people who support drug legalization (all drugs, not just marijuana), think drug sales should then be regulated by the state, much in the same way alcohol is regulated (have to be 21, etc.). But if gambling (and by gambling I mean casinos) are going to be allowed, I think they should be treated the same way as alcohol is and drugs or prostitution would be if they were legalized: as vices with social costs that should be limited in certain ways.
This is not intended as a defense of the proposal discussed above, which would entail removing the license of one facility for the public reason of too few taxes and the private reason that the backers of the new casino in North County just have more political power than the current owners of the Admiral.
Comment by David Stokes — February 24, 2010 @ 10:31 a.m.
@Stokes
A) Even if you are right and casinos harm ’society’, it is still voluntary transactions between consenting adults. You can’t argue for state intervention in this case without inviting wholesale patronizing control over absolutely any behavior that you or any other minority arbitrarily declares as ‘harmful’ for society at large. I see zero logical distinction between the Missouri Gaming Commission and the Taliban.
B) So people can either put their income into long term investments or short term consumption. The more investment, the more economic growth, etc. So ceteris paribus we’d rather see people limit consumption and maximize investment. Gambling is clearly consumption (though granted some irrational gamblers think they are investing), however it is not economically different from any other fleeting entertainment consumption. If casinos attract business, it must be the case that they offer better value than other competing income-sinks. Allowing free market in casinos increases standard of living, by making other purveyers of consumption goods work harder to keep customers.
Comment by vroman — February 25, 2010 @ 4:33 p.m.