Oklahoma Hit Hard Via Casino Revenue Shortage from Covid-19
When 2020 began, it was showing all signs of being a record year for casino revenues in Oklahoma. The state is home to 128 licensed venues and they are a major contributor to revenues that are used for a variety of programs and needs. Back in March, all of the casinos shut down and the large source of revenue for state coffers dried up. The exclusivity fees took a huge hit and officials are now scrambling trying to figure out what to do now.
Major Drop in Fees
Revenues from casino exclusivity fees were down almost 34% when looking at January to July totals of this year and last year. An analysis was completed by the Office of State Management and Enterprise Services to determine the impact that Covid-19 has had on the industry as a whole.
Remington Park and Cherokee Casino Will Rogers Downs were affected as well, seeing a loss of 34$ during January to June, one month shorter than the other casino totals. Because of the revenue shortages across the board, public school as well as other services will suffer. Lawmakers must figure out how to sort the upcoming budget and there will most likely be cuts due to less money available.
Relying Heavily on Gambling
For more than a decade, lawmakers in Oklahoma have relied on casino gaming fees to meet funding needs. They use money for common education as well as other public services. Long ago, compacts were approved by voters to exist between the state and tribes for the exclusive right to offer casinos.
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The tribes pay 4 to 10 percent in exclusivity fees in exchange for offering Class III games. For the 2019 budget year, the fees provided just over $148 million. Commercial racetracks added just over $28 million more.
Such programs that rely on funds from the gaming operations include the Department of Mental Health and Substance Abuse Services. They receive around $250,000 for treatment and education. Around 88% of the funds are let to go to the public schools.
The upcoming fiscal year is going to be rough as there will essentially be very little money to go around to fund education. Normally, there would be a steady stream of cash to be used as needed. Now, the many months of revenue loss will lead to less money and major changes in the budget decisions.
House Minority Leader Emily Virgin said that it is unclear as to how the loss will be made up for. It may be that new sources of revenues need to be considered. With new revenues, the budget could be shored up and core services protected from severe budget cuts.
Not only has the revenues been affected but also job loss. The casinos have an economic impact of around $9 billion and provide around 76,000 jobs in the state. The closures have affected those employed via the casinos and even though venues are back up and running, they are not at the capacity they normally are, so jobs are affected still.