Well, I’ve been talking about it here in this space for the past five years, and the “inevitable” has finally happened: Missouri’s $500 loss limit has been repealed. The inconvenience and intrusion of having your casino visits monitored, and the protection from too-large losses are gone.
On Tuesday, Missouri voters passed Proposition A with 56% of the votes cast. The passage results in:
1. The repeal of the $500 loss limit. More accurately, this gets rid of the $500 "buy-in" limit per two-hour period -- the only such limit of its kind in the United States. (Casino guests swipe a card each time they buy into a table and aren't allowed to spend more than $500 doing this in any two-hour period.) The repeal will dramatically improve the ability of the top Missouri casinos in St. Louis and Kansas City to entice tourists, as well as compete more effectively for high-end players with the casinos on the Illinois side of St. Louis and the coming casinos in Kansas. Customers have complained about the invasion of privacy that comes with the swipe cards, the delays encountered as cards are swiped, and just the limiting of their moves in general.
2. An increase in the gaming tax by 1%, to 21% of gross gaming revenue. Self-explanatory.
3. A cap on casino licenses to 13. This essentially limits new casinos to the ones that are existing or already in the process of being built, including Pinnacle Entertainment’s
The biggest winners are Motley Fool Hidden Gems selection Ameristar Casinos
Pinnacle, with the high-end Lumiere in downtown St. Louis, is also a big winner here. Currently, Pinnacle’s direct downtown rival is the Casino Queen across the river in East St. Louis. Despite the fact that the Casino Queen is located in a part of town most people with money probably shouldn’t be in, the casino has long been a haven for some of the biggest gamblers in town simply because Illinois doesn’t have a loss limit. Now, many of these gamblers figure to spend more time at Lumiere.
Among the other players in Missouri, Penn National
Lastly, I expect that the one publicly traded casino operator in Missouri to be hurt by Proposition A will be Isle of Capri