Gaming Industry Association Executive Director Rich Miller told his board of directors that gaming tax collections had been volatile the last two quarters of Fiscal Year (FY) 2007, with the third quarter seeing a 9.13 percent gain, then falling back to 3.97 percent the final quarter.
The FY 2007 gaming tax growth was pegged at 6.48 percent, Miller said, which closely mirrors the 2006 mark of 6.59 percent and approximates historical averages. The growth was in line with the rest of the state's economy, Miller said.
"This goes to show you, with a consistent, fair tax and consistent, fair enforcement, we can grow, as we should, just like the rest of the state's businesses," he said. Miller noted the biggest tax collection gains came from smaller counties in Eastern Montana that were prospering along with booming activity in the oil fields.
The GIA board met at the Best Bet Casino in Helena August 24.
Miller said a new rules draft governing implementation of the long-contemplated automated accounting and reporting system for the state's gaming machines seemed to be in line with operators' expectations. He said the Gambling Control Division (GCD) was in a "de-bugging process."
One board member noted GCD lab technicians were focused on system development, so testing and approval of some gaming machine modifications had slowed, but noted a new lab technician slot had been budgeted for 2007.
Another board member said it also seemed the operator licensing process had slowed somewhat, following several years of increasingly efficient investigations and approvals. GCD investigators spending time on tobacco tax investigations could account for some of the delays, suggested another director.
Miller noted the industry wants and expects rigorous enforcement of gambling laws and an adequately staffed investigations bureau.
Mark Kennedy, president of the Montana Council on Problem Gambling (MCPG), told the GIA board that substantial funding increases from gaming business groups had put the council's budget back in balance and has provided an operating cushion...for now. He said he contemplated some new advertising to raise awareness of treatment services offered by the council, and that could change the group's financial needs if demands for services increase.
He noted that a group of government officials had examined the prospect of taxpayer support for the program, but that the council had stepped back from the notion when it became apparent substantial portions of budgeted funds would be consumed by administration, licensing and efficacy studies.
Kennedy said that currently 85-90 percent of the money funnelled to the MCPG is spent on providing treatment and very little is consumed in administration, which is exactly the MCPG board's intent. The Montana program model has drawn favorable interest from around the nation, Kennedy said.
Miller, who serves on the MCPG board of directors, noted Gambling Control investigations supervisor Tom Oberweiser of Billings, was recently invited to serve on the board.
Miller said the live card games subcommittee of the Gaming Advisory Council continues to work on draft legislation to modernize the games and to update dealer licensing fees and procedures.
At the last subcommittee meeting, Miller said, there was some discussion regarding local government shares of increased fees, as well as tournament formats and prize limits, wrinkles that still need to be ironed out. His board asked him to assess the various positions of interested parties, including the administration, to see if a consensus position can be found.
The subcommittee had earlier decided to endorse an $800 pot limit –equal to that allowed with video poker–and tournament prizes not to exceed 150 percent of total buy-ins. Some have been advocating a fixed dollar limit on tournament prizes, rather than basing it on participation. The subcommittee ultimately decided discussions on the issues should be taken up by the whole Gaming Advisory Council.
Board member Kent Frampton reminded the group that business has backed beefing up dealer licensing standards and fees, but that updating card games and tournament formats was part of that scenario.
Miller noted that some operators are hoping to more fully develop live card games in lieu of the pending smoking ban and competition from the internet and surrounding jurisdictions with ever more liberal gaming options. "We need to get players off the internet with its lack of limits and regulations and into our establishments," Miller said.
Shifting gears, Miller said the Montana political landscape felt to him a little uncertain. "I'm not sure what we'll have for a Legislature" in terms of party control, he said.
He also told his board there is some subtle voter undercurrent that is difficult to assess, but it may mean the electorate is in the mood to turn out incumbents of either party. Miller said in his travels around the state he sees voters exhibiting "an amazing amount of distrust and disgust."
Miller said some members of a horse racing commission that has been examining the sport's decline seems to believe someone else ought to put up the money for the purses for the horse owners. Miller said it would appear in reality purse money is short because "the sport has been failing to attract customers, and that would seem to be because the product is flawed."
He said the governor has indicated he is not inclined to expand other forms of gambling to horse racing venues, nor is he inclined to earmark other gaming taxes to pay horse racing purses. It has been reported the commission may approach the Legislature for a two-year appropriation of $750,000.
Miller also said other groups may seek similar entitlements at the expense of the state's general fund, by seeking to earmark gaming taxes for special interests including senior citizens centers, health insurance for the low income and so on.
However, he said, liquor license issues may be the more difficult as the session looms. Some special interests have been clamoring to loosen liquor license restrictions, supposedly in the name of economic development, while others may be seeking to further restrict liquor availability, a fundamental contradiction that will have to be worked out.
Indian gaming is also on the legislative radar, Miller said, as a bill draft to essentially make possible Las Vegas style gaming on Indian reservations got a 4-2 nod recently from the State-Tribal Relations interim Committee.
The initial draft from the Montana Tribal Gaming Association would ask the Legislature to empower the governor to negotiate tribal compacts that would authorize roulette, craps, slot machines, blackjack and other house-banked games, and would turn all gambling regulation, taxation and enforcement on reservations over to the tribes.
It was also noted the Blackfeet have opened a new casino that initially was offering the Class II slot machine-like bingo games, but had been advertising it would also offer the Class III Las Vegas banked games such as blackjack and roulette which have not been authorized by the Legislature.
The Blackfeet have no gaming compact with the state, so it would appear such games could not be allowed under the Montana Constitution or the National Indian Gaming Regulatory Act. Nor was it clear if the Montana Department of Justice or federal authorities would have jurisdiction in the matter.
Miller said a bill introduced in Congress to specifically prohibit off-reservation tribal gambling apparently was heading nowhere at this time. Further, a U.S. Department of Justice bill to clarify the definition of slot machines under the Federal Johnson Act, was unlikely to get traction either. Some federal regulators view the video gaming devices authorized by the National Indian Gaming Commission as bingo machines, to be in fact slot machines.
He noted another citizens initiative was on the ballot in South Dakota to outlaw gaming machines, the fourth attempt to do so. Previous attempts have failed, the last one by the widest margin yet, but fighting the initiatives is nevertheless an expensive undertaking, he said.
The GIA board decided to explore Red Lodge and Big Sky as potential sites for its 2007 convention, and decided to next meet just after the election on November 9 at the Best Bet in Helena.
Source: The Montana Tavern Times, Oct., 2006, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.