A report issued by the Minnesota legislature’s non-partisan House Research Department has provided legislators with a sharp reality check on the amount of revenue they should expect from proposed racinos at Canterbury Park and Running Aces Harness Track.
While Racino Now lobbyist Dick Day claims the proposed racinos will generate $125 million per year for the state, a memo issued February 18 by House Research Director Patrick McCormack suggests the amount will be substantially lower.
McCormack based his projections on an analysis by the State of Illinois, which previously had considered authorizing racinos at the state’s racetracks. Using the Illinois model, McCormack estimates Minnesota state revenues from racinos at between $44 million and $98 million per year.
SF 2950, the racino bill supported by Racino Now, dedicates net revenues of $125 million annually to the state out of a projected total annual net of approximately $365 million, or about $1 million per day from from 3,000 slot machines divided between the two racino locations.
In order to reach the $1 million per day mark, each racino slot machine would have to generate $333 per day in net revenue. For comparison purposes, Wynn Resorts reported an average daily net win per unit of $149 for Wynn Las Vegas as of October 27, 2009, down from $225 in 2008.
MIGA Executive Director John McCarthy said the unreliability of revenue projections makes the racino bill a high-risk proposition. “If legislators make budget decisions based on racino revenue that never materializes or falls far short, the budget problem will be even worse than it is now,” he said.