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Boat in a Moat

28 December 1997

KANSAS CITY -- November 25 may prove to be a black letter day in Missouri as it relates to river boat gaming. On that date, the Missouri Supreme Court, sitting with all its justices, declared that river boat gambling is legal only on boats and floating facilities solely over and in contact with the surface of the Mississippi and Missouri Rivers or in artificial spaces that are contiguous to the surface stream. What does that mean to the five companies that opened casinos in the Kansas City area? Several of their "boats in a moat" may not comply with the Constitutional Amendment, which allowed riverboat gambling and may therefore be operating illegally. The implications of this decision are enormous as the ruling will be applied retroactively. This decision, therefore, will affect each of the seven gambling boats operating in Kansas City and could force some to close or to expend large sums of capital to comply with the Constitutional mandate.

Kansas City attorney Jeffrey Lang has said the court's decision will probably not change the day-to-day operation of the boats. "In fact, none of the boats is in jeopardy of closing any time soon. Before any casino would close there would have to be an evidentiary hearing to determine whether the boat was operating illegally."

Given the Court's literal interpretation of the Amendment, at most three Kansas City river boats seem to be legal: Sam's Town, the Argosy and one of Harrah's boats. On the other hand, both of Station Casino's boats, Harrah's land based boat and the Flamigo would most likely qualify for "boat in the moat" status. With dwindling revenues at some of the riverboats and staggering costs ahead to comply with the Supreme Court's decision, we may see one or more casinos close within the next year or two. It was a gamble to erect a casino in Kansas City, and for some companies, it may be a long shot to stay.

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