The state is selling $200 million in bonds to finance the repair of bridges in Mississippi. The bonds will be repaid with gambling revenue (JJ refuses to use the term "gaming".) Bloomberg reported:
Mississippi, the poorest U.S. state, is selling its first bonds backed by gambling taxes after its share of the winnings fell to the lowest since 1997, two casinos closed and its neighbors began looking at expanding into the business. Investors may still like the odds.
The $200 million of bonds carry Standard & Poor’s fifth-highest credit rating because the state’s gaming revenue covers the debt service 10 times over, even though it’s fallen almost 30 percent from the 2008 peak.
Potential competition from neighboring states, along with closures of a Harrah’s casino in Tunica and another on the Gulf Coast, may lead the the state to dangle higher-than-average yields to draw buyers to the offering on Wednesday, said Burt Mulford at Eagle Asset Management.
“There has been a trend of decline in this sector in terms of state gaming revenue,” said Mulford, a manager of tax-exempt funds for the St. Petersburg, Florida-based firm, which holds $2.4 billion of municipal bonds. “It’ll come at a very wide spread, at least initially, and because it’s a name a lot of managers don’t own, they’re going to want to add it.”...
In addition to the two casinos that closed last year, the Isle of Capri Casino in Natchez will shutter next month, according to bond documents. Offsetting that, a new one is set to be built by the end of 2015 along the Gulf Coast with more than twice as many slot machines and seven times as many table games.
Mississippi’s tax revenue from gambling fell in the 2014 budget year to about $164 million, a 17-year low, from as much as $230 million in 2008, according to offering documents. For the 12 months ended June 30, the collections totaled $167 million.
The state’s view on the gaming industry “is it’s going to be stable for quite some time,” Mark Valentine, director of the bond advisory division in Mississippi, said in an interview. “It’s not like there’s just one or two casinos.”.... Rest of article.
HB #1360 passed the legislature this year with almost no opposing votes. It passed the Senate on an unanimous vote while three representatives voted against it in the house.
15 comments:
The state needs to go ahead and add OTB and a sports book. The Miss. market is lagging behind other states that have recently expanded casino gambling.
Oh my! I'm so crazy, I thought gambling money was going to be used for our schools!!! I must Be so dumb😏
Uh oh. Using gambling revenue for something other than paying bloated salaries of unnecessary school administrators? Prepare for another ballot referendum.
There was never any statement of intent to use gaming revenue for education. That's a fairy tale that evidently has no ending. There was - in the mid-60's - an intent but not a directive to use liquor revenue (when state came out from under prohibition) to direct new revenue to education.
When gaming was approved, there was the obvious result that there would be new tax revenue, and it would help with a number of needs in the state, including of course - education. But it was not 'set aside' for any purpose.
With one exception. There was a portion of the gaming tax set aside for the construction of new roads required for the gaming venues. Particularly, it was for the new highway connecting Tunica in a straight shot from I-55. Over the years, other roads have been built/improved with this set-aside money.
From what I understand, these bonds are being secured by this set-aside money for roads, seeing as how there is no particular new need for roads to/around gaming venues. But there is a major need for bridge replacement throughout the state.
Thru this bond deal, MDOT is taking some of the money in the 'gaming road fund' and using it for securitizing this new debt. This deal sold sometime this week and went exceptionally well from what I heard - all bonds sold and at the high rating expected. Frankly, seems to me like one time that MDOT did something forward thinking. Thank God Butch Brown is no longer there to hold us back!
Well, School Buses drive over these bridges with might precious cargo. Seriously, we must do something and obviously MDOT is not into maintenance that requires large sums of money.
"The bonds will be repaid with gambling revenue" - does that mean they will take bets on when the old bridges will fall down?
How bout a damn lottery?
I thought the plan was to generate about $450 million in bonds for bridges? did the senate kill that?
Thank you for not using the word "gaming."
How about an effective, sufficient, non regressive income tax instead of this variable and regressive measure?
I guess this means we will not be taxed at the pump as we now are to pay for the roads.
5:10; This link refutes your claim that gambling revenue was never intended to go to education in the first place.
http://pracademics.com/attachments/article/627/SympAr2%20FrenchStanley.pdf
Lady Deluxe - I was going to axe you what OTB is, but I knew some smartass would come along and tell me I should have Googled it rather than axing. So I Googled it. Now I know:
"OTB
Not neccesary someone that is "off the boat" but acts like he/she is. They only communicate and make friends with other Russians and will always prefer to talk in Russian rather than English."
5:10 PM is an idiot.
Taxes from gambling absolutely were touted as THE way to pay for education. Not only that....at the same time gambling passed rather unnoticed.....a lottery was shot down which was all the rage to pay for education. Florida had a lottery at the same time and they were making a killing.
Participation in one of the multi-state lotteries - a voluntary tax, really - seems like a no brainer to me, but I don't have casino lobbyists throwing bags of money at me to keep it from coming to a vote.
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