Published: October 03, 2008 09:02 am      

County’s gaming ‘bonus’ expected to slide lower

State ban on slots-style machines impacts projections

CUMBERLAND — No less than nine times did Gerald Joy, gaming administrator for Allegany County, prepare his bosses for bad news Thursday during a presentation at the county commissioners’ meeting.

Phrases like “Keep in mind the impact of the (electronic) gaming machines” and “I’m trying to brace you for what’s coming at the end” were tossed around, at least one for each frame of a regulation Major League Baseball game.

At the conclusion of his PowerPoint slide show, the shoe dropped. Revenue projections a year ago for the current fiscal year, which began July 1, did not take into account the impact of what was, at the time, pending legislation to make electronic, slots-like gaming machines illegal. Senate Bill 959 passed during November’s special legislative session. The financial ramifications of that law are just now being seen.

In addition, the state amusement tax passed, further impacting the potential success of gaming operators at convenience stores and taverns by taking 20 percent off the top and giving it to the state.

The county collected $729,316 in paper gaming tax revenue and license fees in fiscal 2008, which ended June 30. The county originally projected $700,000 for the current year. But county education boards and fire and rescue associations shouldn’t start planning on that money just yet.

“I don’t mean to be the bearer of bad news,” Joy said. “It’s going to be very difficult to hit these numbers next year.”

The new laws, combined with the loss of gaming operators such as Lucky Sevens — which closed, as its primary attraction was the slots-style gaming machines that were banned — and increases in the costs of fuel and utilities “and an overall soft economy have resulted in a large decline of gaming revenues.”

Gaming revenues in July and August are down 30 percent from 2007, Joy said, and if the trend continues — and there’s little reason to think it won’t — “it’s going to be a difficult year for us.”

“We get ya,” Commissioner Jim Stakem said.

Jerry Frantz, county director of finance, said the downturn in gaming is not unique to Allegany County. Gaming institutions from Las Vegas to Atlantic City, and next door in Washington County, all have seen sharp declines in gaming.

County Administrator Vance Ishler reminded the commissioners that the money is essentially a “bonus” and that it’s above and beyond what education and fire and rescue associations normally would receive.

Every dollar, he said, “is money these organizations never would have had before” gaming was regulated in the county in 2003. “Any money we get is good money. It might not be as much, but it’s better than we had before.”

And the bad news got worse along the way. The top tax revenue generating entity, Rivers Edge (formerly Lucky Sevens) closed down earlier this year. That’s $58,296 in revenue the county knows not to expect. Kline’s Restaurant, near The Narrows, has yet to renew its gaming license. That would be another $51,217 out of the counting. Those two businesses alone equaled 16 percent, or nearly one-sixth, of the total paper gaming tax revenue generated in Allegany County in fiscal 2008.

The complete report can be viewed online at www.gov.allconet.org/gaming/presentations. Questions should be directed to Joy at gaming@allconet.org.

Contact Kevin Spradlin at kspradlin@times-news.com.