A successful pilot project was completed this summer, and the system will be available for use by January 1, 2008.

Montana's current system is stifled by red tape -- literally. Slot machine owners must file quarterly reports on how much money was paid into each gambling machine in bets, minus the total winnings or payouts, to calculate their gross income. Their taxes are 15 percent of gross income. To determine that, they must read meters inside each machine -- amounting to approximately 72,000 paper reports a year.

"We have way too many errors," said Gene Huntington, administrator of the Gambling Control Division in the Justice Department.

A study by BearingPoint, the national consulting firm, discovered that more machine owners were overpaying their taxes than underpaying them under the paper system.

Montana recently reported that the slot machines there generated $404.4 million in gross income after the paying out of winnings. The government of Montana collected $60.7 million in gambling machine taxes in fiscal 2007, up from $56.9 million last year.

Meter Readers

Slot machine owners can soon type the meter readings from their video gambling machines onto a page on the state's Web site and transmit the information electronically to Helena, or they can buy one of two commercially available software systems to do it.

These systems are intended mainly for route operators.

Huntington said some other advantages include:

• Allowing for paperless licensing for the combined applications for gambling and liquor licenses.

• Making it easier to obtain gambling machine permits.

• Creating a powerful database for the state to analyze statistics.

>From April through June, four businesses owning 2,000 gambling machines participated in a test program to file electronically.

"I think it's working really well," said Thom Propp, vice president of Fleetwood Gaming of Billings, a major route operator. "It certainly created some great efficiencies."


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