Gambling advocates see this as the future: a Northern Kentucky gambling hall just miles from downtown Cincinnati. Hundred-million-dollar lottery jackpots in Ohio. Longer hours for riverboat casinos in Indiana.

        Facing devastated state budgets and competition from neighboring states, Ohio, Kentucky and Indiana are hoping to tap more from an industry that generated $61.4 billion in revenue for the operators and paid $3.5 billion in taxes nationwide in 2000.

INFOGRAPHIC

• The rush to the tables

        Indiana's riverboat casinos and Ohio and Kentucky's lotteries already are raking in almost $3 billion a year, much of which goes to public schools, senior citizen programs and building projects.

        But advocates predict even bigger bonanzas from new gambling efforts in all three states.

        A proposal to allow video gambling at Kentucky's thoroughbred racetracks could bring in another $919 million a year, says a study promoted by Kentucky lawmakers who hope to sway votes for a gambling bill there.

        The horse-racing industry is lobbying for video gambling at racetracks in Ohio, too. And last month, Ohio joined the Big Game Lottery, a multistate game similar to Powerball that offers jackpots that can top $200 million. Big Game is expected to raise $41 million a year for the state.

        Indiana lawmakers are working out the details to allow riverboat casinos to permanently dock rather than having to leave on regularly scheduled cruises. That would allow bettors to come and go as they please, rather than having to wait for the next “cruise”.

        It's the most aggressive move to expand gambling since casinos were legalized in Indiana nearly a decade ago.

        “I don't see any way out of the financial mess we are in without gambling,” says Kentucky state Rep. Jon Draud, R-Crestview Hills. “We need revenue desperately.”

        Proponents of expanded gambling urge quick action because as many as 17 states have recently or may soon allow more gambling, too. Unless states match the competition, bettors will take their millions in wagers to another state's schools and seniors, gambling supporters say.

        Bob Elliston, president of Turfway Park in Florence, says the racetrack wants to build a $125 million gambling hall and hotel — an investment nearly as big as the Kentucky Speedway. If built, it would be just 12 miles from downtown Cincinnati, making it the closest legalized gambling facility to the city.

        Mr. Elliston says the racetrack won't survive the decade unless the Kentucky gambling bill passes.

        “There is a significant price for inaction,” he says. “Our interest is to move as quickly as possible on this.

        But there are plenty of opponents.

        They say gambling fever is bad government and a bad bet on a state's future.

        “Prudent planning for equitable, efficient, stable and adequate revenues is no longer the order of the day,” says Nancy Jo Kemper, director of the Kentucky Council of Churches and a leading gambling opponent.

        “Instead, state government is financed on the backs of financial losses by citizens,” she says. “What a sad commentary, that in order for government to provide its services, it needs its citizens to lose their hard-earned money.”

        Nancy Petry, an associate professor of psychiatry at the University of Connecticut who has studied problem gaming, doesn't see the trend ebbing anytime soon.

        “As more states go after gambling, more states are going to go after gambling,” Ms. Petry says. In Connecticut, where she lives, Indian tribes have run large-scale casino gambling operations since 1988.

        “It feeds on itself, it breeds a competitive atmosphere,” she says. “If one state is making money on gambling, the next state is going to want it, too. That's what we're seeing going on now across the country.”

        Statehouses across the nation are hurting, according to the National Conference of State Legislatures in Washington. It says that all but five states have revenues below budget projections, and 37 states have budget shortfalls because of the recession.

        When budgets can't be met, programs from education to health care have to be cut, says conference president Stephen Saland, a state senator from New York.

        “The combination of weakening revenues and higher Medicaid costs is forcing many states to make painful budget decisions,” Mr. Saland says.

        That's why attempts to reap more from the lucrative gambling industry show no signs of abating, says Monica Kearns, an analyst with the National Conference of State Legislatures.

        “Within the gaming industry devices like slot machines and video poker show extraordinary growth,” she says.

        Proponents stress that expanded gambling is as much about creating new revenue as about keeping money in states like Ohio, Kentucky and Indiana.

        In Ohio, state lottery profits dropped from $749 million in 1997 to $637 million in 2000 as people drove across state lines to play multistate games with higher jackpots.

        The state decided to join the Big Game multistate lottery because it was nearly surrounded by states offering Powerball. Kentucky, Indiana and West Virginia all have Powerball, and Pennsylvania is getting ready to offer it.

        Indiana began considering dockside gambling after Illinois approved such a measure for its riverboat casinos in 1999. Since bettors generally prefer coming and going as they please, rather than waiting on a scheduled cruise, Indiana was concerned about losing business to Illinois.

        In Kentucky, the study released last month by PricewaterhouseCoopers indicated that state residents spend as much as $1 billion a year on gambling and related services in Indiana. They spend $400 million directly on gambling and $600 million more on food, drinks, hotels and entertainment.

        “We have $1 billion leaving the state, and a big chunk of that is from Northern Kentucky,” says Gary Toebben, president of the Northern Kentucky Chamber of Commerce, which is lobbying for passage of the Kentucky gambling bill.

        Meanwhile, the horse racing industry in Kentucky and Ohio is pushing for video gambling as a way to compete and even survive.

        “We're trying to convince the governor and the legislature that hundreds of millions of dollars that could be staying in Ohio is going to other states where casino wagering is allowed,” says Dan Theno, executive director of the Ohio Horsemen's Benevolent and Protective Association.

        The 4,500-member association, made up mainly of horse owners and trainers, is pushing legislators to allow video gambling at thoroughbred and harness tracks, including River Downs in Anderson Township and Lebanon Raceway in Warren County.

        Ohio Senate President Richard Finan, R-Evendale, says he doesn't oppose the measure because the tracks need it and gambling is surrounding the state.

        “Racetracks are an endangered species,” Mr. Finan says. “It's a business that is not doing well.”

        But Gov. Bob Taft has said he shares concerns with some anti-gambling groups: That gambling is an immoral and irresponsible way to raise revenue for the state.

        “If Kentucky passes (gambling), that puts more pressure on us,” Mr. Finan says.

        “People in Ohio can already gamble by going to the boats in Indiana, to the casinos near Detroit, to the racetracks in West Virginia. Our dollars are going to those places when we could be putting that money into our education and social services.”

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