After anemic 3rd quarter, gaming taxes see rebound
Pub Date: 9/1/2008
By The Gambling Control Division
Video Gambling Tax
Collections Slow
After growing at a rate of almost 6percent for the first two quarters of fiscal year (FY) 2008 (July 1-Dec. 31, 2007) revenue growth in the third quarter (Jan.1-March 31, 2008) declined by over $460,000. A rebound in the fourth quarter (April 1-June 30, 2008) resulted in FY 2008 having an increase of 4.38 percent over fiscal 2007.
Video machine tax collections for FY 2008 totaled $63,424,368. Other (state) jurisdictions have also experienced declines in gaming revenues in recent months.
Liquor and Gambling Licenses
The GCD processes both liquor and gambling license applications. The Department of Revenue is responsible for approving and issuing liquor licenses.
In FY 2008, the Division received 361 applications which was a 19 percent increase over FY 2007. The spike in license applications in the fall of 2007 was a result of the lottery for the new restaurant beer and wine licenses authorized by the 2007 Legislature.
Video Gambling Machine Permits
An individual video gambling machine permit fee is $220 for the full fiscal year and is reduced by a prorated amount each subsequent quarter of the fiscal year. A portion of the fee (45percent) goes to the local government where the machine is located and the balance goes to the Gambling Special Revenue Fund. The total number of permits issued is substantially higher than the number of machines in service at a given time, since a new permit is required when a machine s location changes. There are approximately 17,500 machines operating in Montana.
FY 2008 saw a decline in the number of video gambling machine permits purchased. In fiscal year 2008, the Gambling Control Division issued 20,420 permits compared to 22,200 issued in FY 2007. This represents a decrease of approximately 8 percent.
The decline in VGM permits is assumed to be a result of the growth in the number of video gambling machines that can offer both keno and poker (multi-game). In FY 2007, multi-game permits made up 77 percent of permits renewed. In fiscal year 2008, multi-game permits increased to 86 percent of permits renewed.
Consolidation of route operators who lease video gambling machines to bars and casinos may also have caused a reduction in the number of machines permitted.
Card Games and Bingo
In FY 2008, 468 card tables received permits compared to 474 tables permitted in FY 2007. In FY 2008, the number of new card dealer license applicants was 352. The number of card dealers receiving new licenses continues to decline from a peak in FY 2005, when 582 new card dealers applied for licenses. The combined total of new and renewed dealers in FY 2008 was 806, compared with 728 in FY 2007.
In FY 2008, the number of bingo and keno licenses issued was 70, down 12 from FY 2007.
Video Gambling Machines Reporting Online
As of July 17, 2008, 78 percent of all video gambling machines and 70 percent of all licensed locations have committed to reporting through an approved automated accounting system.
Source: The Montana Tavern Times, September, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.