For Missouri’s small casino towns, coronavirus closures were a big financial hit
The Mark Twain Casino in La Grange employs about 200 people — a significant number, considering the town’s total population doesn’t quite top 1,000.
When the casino shut down in mid-March amid pandemic concerns, the town lost a massive source of revenue and a major tourism draw. La Grange City Administrator John Roach estimated that revenue from casino taxes make up about 75% of the town’s budget.
“Being a small municipality that has a casino — we don’t really have anything else,” Roach said. “Does it hurt, ultimately? Yeah, they’re probably our biggest draw.”
Missouri has 13 casinos total in the state, four each in Kansas City and Saint Louis and five outside metropolitan areas. Along the Missouri River, several small Missouri towns rely heavily on funding from local casinos. When the COVID-19 pandemic forced the casinos to shut their doors in mid-March, the money ran dry. Now, city governments are scrambling to adjust.
In Missouri, casino taxes go to education, the state government and the casino’s host town. Last April and May, this meant more than $6 million in revenue for local governments. A year later, this amount was down to zero.
In La Grange —like in other small towns — this has real consequences. Roach estimated the city has lost about $240,000 in potential casino revenue. So far, he said these cuts are mostly coming from “a lot of little things” like not renewing leases on public works equipment.
But Roach also said that the hit means La Grange cannot pay the up-front costs for repairs from a June 2019 flood. FEMA reimburses, but Roach said his town would need to put up the first part of the money — which isn’t a financial possibility with this major loss in revenue.
Bill McMurray, the mayor of St. Joseph, estimated his town is losing about $75,000 a month while the St. Jo’s Frontier Casino remains closed. So far, the town has lost more than $200,000 from its budget.
This means $19,260 from festivals and arts, $48,550 from economic development, $120,000 in historic preservation and about $62,000 from other funds.
Cape Girardeau has only had a casino since 2012. City Manager Scott Meyer said this means the city is not reliant on casino revenue for ongoing programs, but since the casino shut its doors in mid-March, the city has lost about $600,000.
Meyer said none of the casino revenue is spent until the following fiscal year, so the town is more insulated from any major revenue shifts.
In the bootheel, Caruthersville is facing more dramatic setbacks. The town just signed a $4.9 million loan from the USDA for new infrastructure like a new water and wastewater plant.
Sue Grantham, the city’s mayor, said that sales tax revenue has held steady throughout the pandemic.
Caruthersville is home to a Century Casino, which makes up about 60% of the town’s revenue. Grantham estimated the town is losing about $130,000 a month while the casino is closed. If the casino reopens June 1 as planned, she estimated that the total loss to her town would be about $314,000.
“Nobody expected this, and I know we’re not alone in hurting,” she said.
The Caruthersville casino, which employs 180 to 200 people, is planning on bringing back its staff June 1 and slowly working back up to a full crew, Grantham said. At first, only slot machines will be open. Grantham said she’s kept informed of the casino’s plan to safely reopen.
“We’re all trying to do the right thing here,” she said.
Like Grantham, Boonville City Administrator Kate Fjell expressed concerns about balancing budgetary constraints with public safety.
“We’re anxious for some of that money to return so we can stabilize our budget,” she said. “But not at the expense of human health.”
From mid-March to the end of May, Boonville lost about $600,000 from the closure of its Isle of Capri Casino, Fjell said.
Boonville’s annual general fund budget is about $6.9 million. The casino brings in about $2.9 million each year. It employs 350 people in a town of about 8,300.
Fjell said it’s “still cloudy” what exactly will have to be cut as a result of losing that funding. The city does have reserves, she said, but it is putting some major projects on hold. The new health department building and water line improvements on Fourth Street will both have to wait.
Fjell said she worried about a potential second wave of COVID-19 cases causing further financial strain later this year.
“If we do this again in November or December, that could be really challenging,” she said.
This story was produced by the Missouri Information Corps, a project of the Missouri School of Journalism, sponsored by the Missouri Press Association. How has the pandemic changed life in your community? Email us your stories: firstname.lastname@example.org.