1	Fiscal Impacts of Casino Development
2	What are the Costs? State Regulatory Problem Gambling Local Infrastructure Municipal Services Population Growth and School Enrollment
3	What are the offsetting revenues? Gaming taxes, regulatory fees, and revenue sharing Local agreements Sales taxes from casino purchases and employee spending Income taxes from job creation Ad valorem taxes or in lieu payments Casino hotel room taxes Corporate income taxes
4	Let’s Stick with Gaming Taxes Casinos seen as special type of economic development Made to “pay their way” When it comes to measuring costs to governments, spin-off benefits generally don’t count Gaming taxes at commercial casinos and racinos are clearly more than enough to pay the bills
5	State Gaming Taxes
6	State Regulatory Costs Michigan (Detroit) $23 mil from license fee Indiana $3.1 mil from gaming tax + $7.3 mil reimbursables Iowa 0.8% of gaming revs: $8.6 mil West Virginia 1% or $8 mil (4% is dedicated, but not more than 1% is used)
7	Problem Gambling Costs are low compared to revenues Problem of dedicated funding in many states Prevention being shorted, leading to bigger problems and higher costs down the road Judicial costs Costs of incarceration ($36K a year in Louisiana)
8	Problem Gambling Funding Iowa up to $6 mil New York $3.3 mil California $3 mil Delaware $1.5 mil Michigan $2 mil Louisiana $2 mil New Jersey $600K Indiana $200K Nevada $200K; bill to dedicate $1.7 mil Mississippi $100K
9	"Illinois" Illinois No dedicated funding Washington Zero--$500K program cut; bill calls for 0.1% of net lottery revs Nebraska Worst of both worlds—large impacts from Council Bluffs, no casino revenues for funding, difficulties coming up with $750K Victoria A$22 mil
10	Local Costs Emergency services, life safety Often paid through contract or folded into fees paid to local gov’t. Public services/utilities Capital costs – often casino pays for or helps with Operating costs – no continuous source, hole in funding Schools & Population growth Concern for increased school enrollments Evidence is mixed Population growth requires increase in municipal services Again, evidence is mixed concerning population growth Perception of large impacts generally unfounded
11	Local Gaming Taxes
12	Indiana Local Fiscal Impact Source: Indiana Gaming Commission; Purdue University Note: In millions. Does not include Belterra, which opened in 2000.
13	Indiana Lessons The largess prompted Indiana to freeze local share to FY 2002 levels $33 million of wagering tax now distributed to non-host communities Without gaming taxes, costs equaled or exceeded offsetting revenues (property taxes, etc.) Operating budgets potentially in deficit—revenues dedicated to capital improvements School enrollments not dramatically impacted
14	Other Communities Tunica, Mississippi Population increased only 13% from 1990 to 2000, identical to the national average County budget has grown from $3.5 million in 1992 to $86 million in 2002 Traffic enforcement: 130 officers, up from 10 New London County, Connecticut (Foxwoods) Population increased only 1.2% Hinckley, Minnesota 24.8% population growth in Pine County No significant impact on school enrollment Impacts on sewerage, planning and permitting, traffic enforcement
15	California Special Distribution Fund--extremely complicated formula estimated to be around 1% of casinos who participate Local mitigation projects must be approved by the tribe and a local committee Slow pace of distribution Sycuan: only 23% of $2 million in 2004 returned to the community Of $270 million contributed statewide, $55 million has been returned to communities
16	Last Thoughts Gaming tax revenues are more than plentiful to cover costs Native American compacts are now addressing impacts Some issues with dedicated funding Problem gambling Capital expenditures favored, often at the expense of operating costs Balancing percentages with actual needs
17	Fiscal Impacts of Casino Development