Amendment 68 – Horse Racetrack Casino Gambling

Amendment 68 would allow casino gambling at Arapahoe Park, a horse racetrack in Arapahoe County. If Pueblo and Mesa Counties were to have active horse racetracks licensed for betting with at least 30 race days per year for 5 consecutive years, then one racetrack in each of those counties could also have casino gambling under this proposed amendment.

The language authorizes 2,500 slot machines per casino and an unlimited number of tables of blackjack, poker, roulette and craps. Individual casino bets would be limited to $100. The implementing language supersedes Referendum C passed by voters in 1992 requiring approval of the local electorate before allowing limited gaming.

The casino operator would have to pay the state a one-time fee of $25 million. The local government could also, after negotiation, impose a one-time impact fee and a recurring, annual impact fee. The casino would also have to pay the state 34% of its adjusted gross proceeds – the revenue from the casino minus the payouts to winners.

The money paid to the state, predicted at $114.5 million per year and not subject to constitutional revenue and spending limitations, would go into a new K-12 education fund and would not be used to replace current education funding. Currently, the state attempts to equalize funding for school districts so that districts with more local money such as the Boulder Valley School District receive less state money, but this fund would distribute dollars on a per-public-school-pupil basis.

Current state revenue from gambling in mountain towns Black Hawk, Central City and Cripple Creek is less than $100 million. With Arapahoe Park closer to major population centers, gambling and tourism revenue would likely drop in the mountain towns with a corresponding drop in money dedicated to statewide community colleges, historic preservation and the local communities. (See Amendment 50 in 2008.) With the passage of Amendment 68, we would have higher education and K-12 education competing against each other for some of the same gambling dollars.

Like Amendment 67, this amendment would also add Section 17 to Article XVIII, titled Miscellaneous.

Recommendation: no

Aside from the fact that we never should have put gambling in our constitution to begin with, this proposed amendment would primarily benefit Rhode Island’s Twin River Casino which is positioned to open casino gambling at Arapahoe Park. The amount of money going toward education is just a drop in the bucket. (See this year’s BVSD bond issue 3A for a comparison.) It also seems likely that legislators would find a way to count the new education fund money when they budget for public schools as they reinterpreted Amendment 23 nine years after it passed so they could reduce funding increases.

Arapahoe Park is in unincorporated Arapahoe County, but the city of Aurora estimates its costs for needed improvements to the roads to the casino to be over $60 million. In order to get any impact fees from Arapahoe Park, the city would have to annex Arapahoe Park.


Website for the Yes side (Coloradans for Better Schools)
http://yesforbetterschools.com/

Website for the No side (Don’t Turn Racetracks Into Casinos)
http://www.voteno68.com/


Approved Ballot Language

Amendment 68 (CONSTITUTIONAL)
SHALL STATE TAXES BE INCREASED $114,500,000 ANNUALLY IN THE FIRST FULL FISCAL YEAR, AND BY SUCH AMOUNTS THAT ARE RAISED THEREAFTER, BY IMPOSING A NEW TAX ON AUTHORIZED HORSE RACETRACKS' ADJUSTED GROSS PROCEEDS FROM LIMITED GAMING TO INCREASE STATEWIDE FUNDING FOR K-12 EDUCATION, AND, IN CONNECTION THEREWITH, AMENDING THE COLORADO CONSTITUTION TO PERMIT LIMITED GAMING IN ADDITION TO PRE-EXISTING PARI-MUTUEL WAGERING AT ONE QUALIFIED HORSE RACETRACK IN EACH OF THE COUNTIES OF ARAPAHOE, MESA, AND PUEBLO; AUTHORIZING HOST COMMUNITIES TO IMPOSE IMPACT FEES ON HORSE RACETRACKS AUTHORIZED TO CONDUCT LIMITED GAMING; ALLOWING ALL RESULTING REVENUE TO BE COLLECTED AND SPENT NOTWITHSTANDING ANY LIMITATIONS PROVIDED BY LAW; AND ALLOCATING THE RESULTING TAX REVENUES TO A FUND TO BE DISTRIBUTED TO SCHOOL DISTRICTS AND THE CHARTER SCHOOL INSTITUTE FOR K-12 EDUCATION?
- YES/FOR
- NO/AGAINST


See the text of the measure, as filed with the Secretary of State, to add Section 17 to Article XVIII of the Colorado Constitution:
http://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2013-2014/135Final.pdf

FY2011 Casino Tax Rates Reinstated for FY2013

Each May the Colorado Limited Gaming Control Commission reviews the tax structure for casinos. In 2011 the commission approved a 5% tax cut. The following month they were asked to reconsider the tax cuts but refused. In July of 2011 Governor Hickenlooper replaced all 5 commissioners. (See this blog's July 2011 entry.)

This past May the 5 new commissioners reinstated the former tax rates for fiscal year 2013. The maximum tax rate is 20%, the rate as of July 1, 2008. According to Amendment 50 passed by the voters in 2008, the maximum rate cannot exceed the July 1, 2008 rate unless the state’s voters approve an increase.

Amendment 50 Meets State’s Budget Woes -- Hickenlooper Replaces Gaming Commission

In most states casino tax rates are set by the legislature, but in Colorado the 5 members of the Colorado Limited Gaming Control Commission (or the voters of Colorado) approve tax rate changes. For instance, in May of 2008 the commission approved a targeted tax cut for casinos with revenues of less than 8 million dollars.

This year at the May 19 meeting the 4 attending commissioners approved a controversial across-the-board 5% cut in the casino tax rate to provide financial relief to the industry, despite some of the bigger casinos bringing in large profits. Casino tax rates are based on net revenue (officially called Adjusted Gross Proceeds equal to bets minus payouts); higher revenue determines a higher tax rates. On July 1 the top tax rate changed from 20% to 19%. The other tax rates went from 0.25% to 0.2375% (under 2 million dollars in AGP), 2% to 1.9% ($2M to $5M), 9% to 8.55% ($5M to $8M), 11% to 10.45% ($8M to $10M), and 16% to 15.2% ($10M to $13M).

On June 6 the 5 members of the commission unanimously rejected requests from the Colorado Community College System and History Colorado to reverse the impending tax cut. (Prior to Amendment 50 25% of the gaming tax revenue went to historic preservation. Passage of Amendment 50 in 2008 empowered local voters in gaming communities to increase the bet limit from $5 to $100 with 78% of the resulting increased tax revenue going to community colleges.)

Governor John Hickenlooper was unhappy with the casino tax rate cut, especially given the state's current budget woes. On July 6 he reminded us that the commission members serve “at the pleasure of the governor” with his decision to replace the entire commission. Hickenlooper was already due to replace two of the members whose terms expired in early July.

The rules for reversing the casino tax rate cut are unclear. It may be that the new commission can just vote to reverse it. It is clear, however, that Amendment 50 prohibits the commission from setting any tax rate ABOVE the previous level (in effect since July 1, 2008). A statewide vote of the electorate is required to increase casino tax rates above the July 1, 2008 level.

Amendment P – Regulation of Games of Chance

This proposal would consolidate the licensing of gaming within the Department of Revenue. Casinos and the CO lottery are currently regulated by the Dept of Revenue, but bingo and raffles are regulated by the Dept of State. In a 2008 report both departments supported this consolidation for efficiency and practicality reasons.

Although this is a constitutional amendment, there is an attempt not to tie the hands of the general assembly. For instance, the general assembly may determine how long a corporation or organization must be in existence before it is allowed to apply for a gaming license, and the general assembly may change the licensing authority without a constitutional amendment.

Recommendation: YES

I like the leeway that this proposal gives to the general assembly – very atypical for constitutional amendments.

There is an estimated one-time cost of $116,000 to effect this move. According to the Blue Book, the costs will be covered by existing revenue from bingo and raffle licenses. Some organizations dependent on bingo and raffles worry that the Dept of Revenue will take more than the current share of their profits to pay for this move, but I haven’t seen any evidence to support this claim. If anyone out there has such evidence, please provide it.

Some people argue that the idea is good, but the timing of the consolidation is bad because of the cost in a tough economic year. If the idea is good, let’s pass it and not wait. Out of the entire CO budget, $116,000 is not very much money. Passing a ballot issue is a lot of work, even for “just” a referendum. If the general assembly is willing to spend $116,000 and they are the ones who have to balance the budget, let’s support them.


Approved Ballot Language

Amendment P (CONSTITUTIONAL)

SHALL THERE BE AN AMENDMENT TO SECTION 2 OF ARTICLE XVIII OF THE CONSTITUTION OF THE STATE OF COLORADO, CONCERNING THE REGULATION OF GAMES OF CHANCE BY AN AUTHORITY SPECIFIED BY THE GENERAL ASSEMBLY?

Yes _____ No _____


Full text of House Resolution 09-1003 referring Amendment P
CO Constitution, Article XVIII, Section 2 (changes)
Lotteries prohibited - exceptions
http://www.leg.state.co.us/CLICS/CLICS2009A/csl.nsf/fsbillcont3/640BEC9AFF55307D8725754000649BF8?Open&file=HCR1003_enr.pdf

Amendment 50 -- Limited Gaming in Central City, Black Hawk, and Cripple Creek

In 1990 Colorado voters approved a constitutional amendment allowing limited gambling in three mountain communities. This ballot issue would allow the communities to raise the maximum single bet from $5 to $100 and allow expanded hours and gaming options. The expected tax revenue increase would go toward community colleges (78%) and the affected towns and counties (22%).

Required CONSTITUTIONAL change -- CHANGES Section 9 of Article XVIII

Recommendation: lean no
I find it ridiculous that we have gaming limits spelled out in our state constitution. I’d vote in a minute to have the entire gaming portion of the constitution changed to statute. Meanwhile, community colleges in Colorado are underfunded, but, aside from the constitutional vs statutory question, I don’t like the proposed solution for the following reasons. During your education and especially if you study probability, you learn that gambling is a losing proposition. What kind of signal are we sending students by using gambling taxes to fund education? In addition, as long as bet limits are $5, one could argue that money spent in the gaming towns is more a form of entertainment than serious gambling. Some say that we should let grownups decide for themselves if they want to gamble (and they certainly can gamble any time on the stock market), but this proposal wouldn’t affect just individuals. It would affect whole communities. At least this proposal would allow the residents of the affected communities to determine their own fate.


Website for Yes side (Coloradans for Community Colleges)
http://sayyeson50.com/

Website for No side
http://keepvegasout.com/


Amendment 50 (Approved ballot title below)

Limited Gaming in Central City, Black Hawk, and Cripple Creek

SHALL THERE BE AN AMENDMENT TO THE COLORADO CONSTITUTION CONCERNING VOTER-APPROVED REVISIONS TO LIMITED GAMING, AND, IN CONNECTION THEREWITH, ALLOWING THE LOCAL VOTERS IN CENTRAL CITY, BLACK HAWK, AND CRIPPLE CREEK TO EXTEND CASINO HOURS OF OPERATION, APPROVED GAMES TO INCLUDE ROULETTE AND CRAPS OR BOTH, AND MAXIMUM SINGLE BETS UP TO $100; ADJUSTING DISTRIBUTIONS TO CURRENT GAMING FUND RECIPIENTS FOR GROWTH IN GAMING TAX REVENUE DUE TO VOTER-APPROVED REVISIONS IN GAMING; DISTRIBUTING 78% OF THE REMAINING GAMING TAX REVENUE FROM THIS AMENDMENT FOR STUDENT FINANCIAL AID AND CLASSROOM INSTRUCTION AT COMMUNITY COLLEGES ACCORDING TO THE PROPORTION OF THEIR RESPECTIVE STUDENT ENROLLMENTS, AND 22% FOR LOCAL GAMING IMPACTS IN GILPIN AND TELLER COUNTIES AND THE CITIES OF CENTRAL CITY, BLACK HAWK, AND CRIPPLE CREEK ACCORDING TO THE PROPORTION OF INCREASED TAX REVENUE FROM VOTER-APPROVED REVISIONS IN EACH CITY OR COUNTY; AND REQUIRING ANY INCREASE IN GAMING TAXES FROM THE LEVELS IMPOSED AS OF JULY 1, 2008 TO BE APPROVED AT A STATEWIDE ELECTION, IF LOCAL VOTERS IN ONE OR MORE CITIES HAVE APPROVED ANY REVISION TO LIMITED GAMING?

Yes ________________ No ________________


To see the full text of the proposed measure, click here, then click on “2008 State Ballot Information Booklet” at the top of the page.