Did Amendment 50 Increase Profits at Colorado Casinos?

In November 2008, Colorado voters approved a change in Colorado's gambling laws. The changes allowed for twenty-four hour gambling, increased table limits up to one hundred dollars, and gave the casinos the opportunity to offer craps and roulette to their patrons. The lion's share of the increased tax revenue from these changes go to Colorado's thirteen community colleges. The change in the gambling laws went into effect on July 2nd 2009.

The original estimate for the effect of Amendment 50 was a twenty-five percent increase in gambling revenue. Due to the economic crisis, this estimate was revised down to ten percent by the Colorado Division of Gaming in September. Initially, the Colorado Community College System was expected to receive twenty-two million in funding at the end of the first year of the revised law. The revised September estimate for the community college share of the tax revenue was two to three million dollars. In December, an analysis by the Denver Post based on the first five months of data indicated that the community college might receive 4.4 million instead.

The tax revenue from Amendment 50 is required to go toward classroom instruction and financial aid. The exact details of how the revenue will be spent will not be known until May when the budget for 2011 is planned according to Nancy McCallin, president of the Colorado Community College System. The funds will be received in September.

This additional revenue is vital for the community colleges. State funding for the community colleges were cut by thirty-six million for the 2010 fiscal year. An additional eleven million is expected to be cut from the 2011 fiscal year budget, bringing the state funding for the community college system down to ninety-five million dollars. While the budget shortfall was made up in part this year by federal funding, there is no guarantee that the same will happen next year. Unfortunately these budget cuts are happening at the same time that the community colleges are experiencing growth in the number of students that they are serving.

The bad economy which is the driving force behind the ever-tightening state budget restrictions is the very same force that prevented the casinos from making as much as they projected originally from the law change. Since July, the start of the fiscal year when Amendment 50 went into effect, casino revenue has increased 8.5 percent. This increase is well below the initial twenty-five percent increase that the casinos hoped for.

Even with the law change, revenues are still down from last year in two of the three Colorado gambling towns. Cripple Creek November's revenue was down thirteen percent from the previous November. Central City's revenue was down 4.7 percent from the previous year. Only Blackhawk saw an increase, accounting for the overall state growth of gambling revenue in November, with a thirteen percent increase from the previous November. Blackhawk in previous months has been the source for most of the state's gambling revenue increase since the law went into effect.

While the immediate increase of gambling revenue was smaller than expected, McCallin, in a Denver Post article, admitted that Amendment 50 still had the potential to prove itself a good investment for Colorado and its community colleges. Amendment 50 was not about a one-time increase in funding, but was meant to be a long-term source, McCallin noted. Furthermore, as the economy recovers, so will the gambling industry in Colorado, as well as the tax revenue that Amendment 50 will channel into Colorado Community College System.