Tuesday, June 01, 1999
States deaf to call for gambling freeze
Patton: Ky. has all the ills, none of the benefits
BY FREDREKA SCHOUTEN
Gannett News Service
WASHINGTON — On the same day a federal gambling commission broached the notion of a nationwide moratorium on opening new operations, Kentucky Gov. Paul Patton was floating his own casino proposal.
In an “essay” to state lawmakers, Mr. Patton proposed — but did not endorse — establishing 12 to 14 casinos to aid horse racing and compete with gambling from neighboring states.
“From the nation's perspective, one might legitimately say the nation ought to pause,” Mr. Patton said recently, when asked about the commission's moratorium call.
“But the fundamental question I've been wrestling with is, it appears Kentucky is suffering from all the ill effects (of gambling) and getting none of the benefits.”
In the month since the National Gambling Impact Study Commission narrowly adopted the controversial call for a moratorium, there is little indication that states are willing to slam on the brakes.
States and localities have become addicted to tax revenue from gambling to pay for every thing from new computers in classrooms to medication for the elderly to property tax relief.
At the same time, gambling can be found almost everywhere — from video poker in truck stops to lottery tickets in liquor stores to off-track betting parlors in suburbia.
And rather than contract, the nation appears on the verge of a gambling resurgence. As states scramble for more tax dollars, gambling interests — which lobby heavily for expan sion — lavishly fund political campaigns.
Moratorium "meaningless'
Alabama and South Carolina are on a fast track to approve lotteries to fund education. Casinos are under consideration in Massachusetts and West Virginia. Illinois lawmakers just opened the door to 24-hour gambling and a new riverboat casino near Chicago's O'Hare Airport. And Indian tribes have opened negotiations with California Gov. Gray Davis to expand casino-style gambling.
Eugene Christiansen, a New York gambling analyst, said the commission's call for a moratorium will prove “meaningless.”
“For the commission to say they are going to recommend a moratorium is sort of like me recommending peace in Kosovo,” Mr. Christiansen said. “I can recommend that, but what effect it has is probably not great.”
As the commission ends its two-year, $5 million study of gambling's effect on society, it finds gambling embedded in American culture.
Once the exclusive province of Nevada and New Jersey, casinos operate in 26 states. Thirty-seven states and the District of Columbia rely on lottery revenue to fund programs. The gambling industry — ranging from race tracks and casinos to video poker machines at truck stops — boasts revenue of more than $50 billion annually, easily eclipsing revenue from movie box offices.
The commission, which has no enforcement power, will submit its report to Congress and the president on June 18.
While the big resort casinos in states like Nevada and New Jersey have escaped largely unscathed from the commission's condemnation, easy-to-get-to forms of gambling — slot machines at race tracks, video poker machines in convenience stores and state lotteries — weren't so lucky. The commission has singled out this “convenience gambling” for particular criticism.
Gambling's pervasive presence, said commissioner Richard Leone, has led to “reckless, desperate behavior that's bad for families, bad for the country and bad for the culture.”
Gambling, he said, “doesn't reflect the kind of hard work and realism about life that makes this country strong.”
Campaign money targeted
Mr. Leone was the architect of the commission's moratorium provision and when the nine-member group meets for the last time — Wednesday and Thursday in San Francisco — he will urge it to adopt what could be its most controversial proposal: banning campaign contributions from gambling interests.
In the 1997-98 election cycle, the gambling industry donated more than $6.2 million to federal candidates, political parties and campaigns.
In Missouri last year, casino firms spent $10 million waging a referendum battle to keep riverboat casinos far from the water and close to customers on land.
Two commissioners — William Bible, Nevada's former top gambling regulator, and John Wilhelm, who heads a union that represents 75,000 casino workers — flatly have rejected restricting the industry's political influence.
But others, including commission chairwoman Kay Coles James, appear willing to debate the idea.
Ms. James said she was concerned about gambling “beginning to dominate American politics and affect elections,” and pointed to recent elections in California and South Carolina as examples.
In California, Indian tribes and their opponents, including some Nevada casinos, waged an almost $100 million referendum campaign last year to expand gambling on Indian reservations.
The tribes won overwhelming voter support, and recently opened negotiations with Mr. Davis, the state's newly elected Democratic governor, in hopes of reaching agreement on casino-style games.
The tribes, which contributed nearly $1 million to Mr. Davis' campaign, also have hired former Clinton Cabinet member and political friend Mickey Kantor to represent them.
In South Carolina in November, Democrat Jim Hodges — who advocated a state lottery and received financial help from the state's largely unregulated $2.3 billion-a-year video poker business — ousted Republican Gov. David Beasley.
On May 27, Mr. Hodges celebrated as the state Senate gave final approval to a 2000 voter referendum on a lottery to boost education.
“Education lotteries are a way to raise resources without raising taxes,” said Mr. Hodges' spokeswoman, Nina Brook.
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