Master FIR (1988)

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F I S C A L I M P A C T R E P O R T

SPONSOR:	Smith		DATE TYPED:	3/11/99		HB
SHORT TITLE:		Expand Gaming at Racetracks				SB	573
					ANALYST:		Hadwiger

APPROPRIATION

Appropriation Contained		Estimated Additional Impact		Recurring or Non-Rec	Fund Affected
FY99	FY2000	FY99	FY2000	Recurring or Non-Rec	Fund Affected
	$ 0.0

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY99

FY2000

See text

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

LFC Files

Gaming Control Board (GCB)

Regulation and Licensing Department

SUMMARY

Synopsis of Bill

The bill would:

Increase the maximum cost of a gaming operator's license for a racetrack from $50.0 to $100.0 for the initial license and from $10.0 to $20.0 for an annual renewal.

Remove the 300 machine limit on the number of gaming machines which racetracks may operate and allow the racetracks to operate an unlimited number of gaming machines.

Remove the requirement that gaming machines be operated at racetracks only on days when the track is either conducting live horse races or is simulcasting horse race meets in the state.

Expand the length of time each day that tracks, except the State Fair/Albuquerque Downs, would be allowed to operate gaming machines from twelve hours to twenty consecutive hours each day.

The bill would be effective when the GCB certifies to the governor that it has promulgated rules to regulate the additional gaming at the racetracks pursuant to the bill's provisions.

Significant Issues

According to the GCB, increasing the hours and allowing an unlimited number of gaming machines at eligible racetracks may constitute an expansion of gaming and cause a breach in tribal casino revenue sharing agreements. The tribes would no longer be required to make payments under Section 11-13-2 NMSA 1978.

The GCB also indicated that the bill deletes "gaming machines" and inserts "games" on page 3, line 7. The word "games" is not defined in the bill and it is not clear whether more than just gaming machines would be allowed at racetracks. Permitting the racetracks to offer games such as roulette, craps and blackjack would also likely breach the revenue sharing agreement with tribal casinos.

FISCAL IMPLICATIONS

If the revenue sharing agreement with tribal casinos were abrogated, the general fund would lose about $32 million in revenues from this source in FY2000. This revenue loss would be partially offset if the new rules encouraged racetracks to operate more gaming machines. For example, if five tracks chose to operate 500 gaming machines each, increased tax revenues from gaming machines at racetracks would offset $17.8 million in lost revenue sharing monies if each machine had a net profit of $150.00 per day. If five tracks chose to operate 750 machines each, the state would gain about $2.8 million general fund, using the same assumption, over current projections for FY2000 revenues from Indian casinos and racetracks.

ADMINISTRATIVE IMPLICATIONS

According to GCB, the operation of more machines for longer hours would require additional computer operators to staff the help desk and monitor gaming machines at an estimated cost exceeding $60.0.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

According to GCB, this bill conflicts with bills proposing amendments to the revenue sharing agreement (HB419, HB615, SB345, SB469, and SB615). It also conflicts with HB472 which excludes the State Fair from eligibility for a gaming operator's license.

DH/njw