Quick-takes: The month's trends in a glance – February 2006

Atlantic City December gaming revenue rose 7.3% to $387 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-16-06

Colorado casino revenue fell to 57.4 million, down 3.8 percent from 2005. Joanne Kelley, Rocky Mountain News, 1-18-06

Detroit December revenues rose 9.2% to $104.6 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-23-06

Illinois December gaming revenue rose 3.9% to $152.4 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-16-06

Indiana December gaming revenue fell 0.5% to $189.2 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-30-06

Iowa December gaming revenue fell 1.4% to $89.9 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-16-06

Louisiana's casinos won $208 million compared with $175.8 million in December 2004. Alan Sayre, Associated Press, New Orleans Times-Picayune, 1-17-06

Macau December gaming revenue was up about 15% to $500 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-16-06

Mississippi December gaming revenues were down 21% to $150.2 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-23-06

Missouri December gaming revenues rose 4.1% to $130.2 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-16-06

Nevada November casino gambling revenue rose 16.01% to $999.62 million. Alan R. Woinski, Gaming Industry Weekly Report, 1-16-06

The NCAA is starting off the year in good fashion; they are going to stop betting on college basketball by college students. The solution is typically brilliant; FBI agents are going to fan out across the country and tell players not to bet on games. Now why didn't I think of that?

The NCAA will bolster its anti-gambling message at this season's NCAA basketball tournaments after a study showed more than two-thirds of male college athletes and nearly half of the female athletes gambled in some form. FBI agents will talk to each of the 32 teams in the regional rounds of the men's and women's tournaments. Previously, warnings were given only at the Final Fours. Associated Press, San Diego Union-Tribune, 1-10-06

Regardless of the NCAA tactics, gambling in general is increasingly acceptable and available in the United States. However, it is not without its places and times of controversy, which only illustrate our national schizophrenia about gambling. We live in a country where every American is within a hundred miles of a place to place a wager, and we live in a country where major religious leaders say hurricanes are punishment from God for gambling. We live in country where slot machines have two or three different names and use the confusion to masquerade as legal and moral lottery or bingo machines. And we live in a country where in some states a person could be arrested for playing poker, while the governor of the same state is advocating expansion of the lottery to pay for education.

With or without the confusion, we live in a country where lawmakers regularly use gambling as a way to finance the needs of the state. In January and February at least three states, Delaware, Kansas and Illinois, are expected to debate some extension of gaming to raise revenues. Most will be looking at slot revenue, although the West Virginia legislature is expected to deal with legislation on table games this year. Some of the slot ideas are pretty innovative. Governor Blagojevich of Illinois wants to copy Michigan and put keno machines - yea, just the video slot machines in Nevada - in all the bars in the state. Kansas and Delaware need more money, but they also want to protect their market share - a very common theme in gaming legislation.

Gov. Ruth Ann Minner on Thursday played the hand she hopes will let Delaware preserve millions in gambling revenue from neighboring states. Minner's proposal, which aims to strengthen existing casinos with more slot machines and extended hours, could spell the end of developers' hopes for new casinos in Wilmington. But her plan appears to have broad support. Owners of the state's three slot machine casinos -- all attached to horse racing tracks -- have agreed to support legislation to be introduced this month…Minner …still opposes expanding gaming in Wilmington or adding new types of gambling, such as sports betting or table games. People should not mistake her relenting on going to 24-hour gaming as a softening of her stance, she said. (The Delaware bill, called the Video Lottery Competitiveness Act of 2006, would raise the limit on the number of slot machines allowed at each of the so-called racinos from 2,500 to 4,000 machines.) Maureen Milford, Patrick Jackson/ Adam Taylor, Delaware News Journal, 1-13-06

A bill authorizing destination casinos in Kansas City and Pittsburg and slot machines at Wichita Greyhound Park could be headed for an early vote. Senate leaders said Wednesday that they hope to determine soon whether money from gambling will be available to help fund schools in future years. The bill will not include a casino for the Wichita area. A school cost study released Monday estimated that lawmakers would have to spend $460 million more a year on public schools to meet a state Supreme Court order. "There's a dramatic need for more dollars," Senate President Steve Morris said. Steve Painter, Wichita Eagle, 1-12-06

Governor's keno proposal for school projects drawing fire
Gov. Rod Blagojevich's plan to pay for school construction by legalizing keno in Illinois bars and restaurants angered gambling opponents Wednesday and got a chilly response from many lawmakers. Blagojevich wants to borrow $500 million for new school construction and authorize keno - a video poker-meets-bingo game - to repay the debt. It would be part of a $3.2 billion package for new road and mass-transit projects. Associated Press, Chicago Sun-Times, 1-12-06

On the other side of the ledger we have the fights against expansion. In Iowa and Alabama the confusion over what is or is not a slot machine is going to dominate the debate. The Iowa Lottery thought they could just keep putting out lottery machines - not in your wildest imagination "slot machines" - but it seems there was a constituency for the "no more" legislators, which not surprisingly included the casinos that resented the competition. In Alabama the argument also revolves around definitions; the owner of the Birmingham Race Course thinks he has found a machine that meets the definition of the law and still attracts players. The state attorney general disagrees. (There is a similar case developing in Florida over the "chuckee cheese" law in that state.)

Gubernatorial candidates are split over what should be done about TouchPlay lottery machines, about 4,600 of which have been installed across the state in stores and other places that sell lottery tickets. The TouchPlay machines look like slot machines, but lottery officials say they differ in that that they award prizes to predetermined winners. Slot machines pay out to randomly chosen winners. Critics say players can't tell the difference…the issue is likely to be an important one in the looming campaign for governor. Rep. Jim Nussle, R-Iowa, and Sioux City businessman Bob Vander Plaats, both candidates for the Republican gubernatorial nomination, both think the machines should be pulled...Democrats running for their party's nomination generally are more cautious, favoring Vilsack's wait-and-see approach. Associated Press, Des Moines Register, 1-12-06

Video-gambling machines being confiscated from local establishments and the Birmingham Race Course may be routine enough news that few people even blink at the reports. But the latest move by Jefferson County Sheriff Mike Hale and the sheriff's office may prove to be "a defining moment for gambling …throughout the state…if Circuit Judge Scott Vowell rules Jan. 17 the machines…are indeed illegal…we will proceed with the criminal case," Hale said. "If he rules they are legal, then the criminal case is a moot point and Milton McGregor can open back up for business…Hale said McGregor is taking an obscure sweepstakes law and trying to build a bridge from it. " This is a fake, a fraud, a sham, a scam. He is trying to make something legal that is not legal," he said…"It is unconstitutional," Ireland said. "They are skirting the letter of the law trying to get gambling the way they want it. The only sweepstakes law we have is mail-order sweepstakes." Jennifer Davis Rash, Birmingham News, 1-12-06

Texas, like Alabama, believes it has no gambling (except the lottery, which is a whole story by itself), but provides the majority of the players to other states - such as Louisiana. The enforcement efforts in Texas are inconsistent, but never go away and are usually local rather that state efforts. In the latest go-around, a district attorney wants to put the players in jail and plans to bring buses on his raids for just that purpose.

Customers and landlords of illegal gambling establishments will be the next targets of a renewed campaign against the unlawful and lucrative businesses, Cameron County District Attorney Armando Villalobos said Wednesday. ["We want to warn the public that they will be arrested on a Class C misdemeanor gambling charge - We will have a mobile court available on the spot so we can arrest and take them in vans or buses … not cite them."] Officials estimate at least 35 video gambling casinos are in operation throughout the county. Brownsville police and other local law enforcement agencies have raided more than a dozen illegal video gambling casinos and poker dens in the past two years, according to Herald archives. Sergio Chapa, Brownsville Herald, 1-12-06

But Pennsylvania wins top awards this month; each city is struggling to control the locations and even the operators in their city as the state process of awarding licenses for 60,000 slot machines inches along. There have not been many outright "not in my backyard" protests, except Gettysburg, where opponents of slots close to the historic battle site are trying to prevent a casino. The effort is not what makes it unique, but rather the rhetoric: "Today we are engaged in the second Battle of Gettysburg,"

Protesters opposed to a plan to open a slot machine casino near Gettysburg came to the state Capitol yesterday, led by advocates of "heritage tourism," a Lancaster girl who takes part in Civil War re-enactments, and Gen. and Mrs. Ulysses S. Grant…He wore an 1860s military uniform and she a flowered dress with a wide hoop skirt. "Today we are engaged in the second Battle of Gettysburg," an effort to block the casino that a group called Chance Enterprises has proposed for Adams County, said Mr. Clowers…and others urged the state House Tourism Committee to require a 15-mile buffer zone between any Pennsylvania casino and a national park or battlefield site run by the National Park Service…The casino site is three miles from the historic center of Gettysburg and only about one mile from one section of the Civil War battlefield, where George Armstrong Custer led Union troops against the Confederates. Tom Barnes, Pittsburgh Post-Gazette, 1-12-06

Our attitude toward gaming is clearly evolving. We Americans ended the 19th and began the 20th century with a very clear opinion and legal stance on gambling; gambling was illegal, immoral, corrupting and just plain bad. We ended the 20th and began the 21st century in a very different state of mind. Gambling - since renamed and repackaged as gaming - is not always bad, in fact, sometimes it is good. It is good if it raises money for a good cause, such as church bingo or state lotteries devoted to education. It is only still bad in some places and then only sometimes. It isn't bad if it is on television, for example, as with the very popular televised poker tournaments.

America's attitude toward gambling is changing. But there are still some times of confusion and conflict. Take, for example, the survey that says 20 percent of Americans think the practical way to wealth is playing the lottery. The report accompanying the survey and subsequent editorials lecture us - assuming that we and not they are in that 20 percent - that the true way to wealth is simple, practical and regular savings. It seems many are pessimistic and are spending more than they earn.

A majority of Americans are pessimistic about their ability to save $200,000 in net wealth in their lifetimes, and more than one-fifth say the lottery is the most practical way for them to reach that type of goal, according to a new survey… Twenty-one percent of those surveyed said a lottery would be the most practical strategy for accumulating several hundred thousand dollars..percentage was higher among lower-income people…38 percent of those who earn less than $25,000 pointing to the lottery as a solution…Many Americans are pessimistic about their ability to save because they're "having trouble making ends meet, and may even be spending more than their income," he said.
Andrea Coombes, Marketwatch, 1-12-06

The pundits wonder why lower-income people - where 38 percent hold the belief - would ever think such a thing. I would argue that lower-income people are not the only ones who believe that. I will site only two examples, but there are dozens more that could be sited. Oklahoma just joined twenty-eight other states in Powerball, hoping for $150 million for education. What about some simple, practical, regular saving?

Tickets for the Powerball lottery went on sale in Oklahoma for the first time…the jackpot in the multi-state game set at $76 million…Oklahoma officials expect will eventually net $150 million a year for education.…Tickets were being sold at more than 1,900 Oklahoma merchants. The drawing for the first Powerball jackpot involving Oklahoma will be held Saturday …Oklahoma joined 28 other states, the District of Columbia and the U.S. Virgin Islands in offering Powerball…odds of winning the grand prize is 1 in 146,107,962, according to Powerball officials. Associated Press, 1-12-06

The other is from Ontario, where the government would like to have more athletes from the province representing Canada (And, yes, most of the time I consider Canadian attitudes to be American or representative of American trends) in the next Olympics and have chosen, you guessed it, the lottery to fund the training of would-be Olympians. Wouldn't a little simple, regular government saving be just as good? Why would anyone believe that the lottery was the most certain way to wealth, why indeed? Do you suppose that some governments are spending more than they earn and are just buying a lottery ticket instead of cutting spending and saving?

A new Ontario government lottery promises millions of dollars in direct financial aid to 1,300 high-performance athletes in the hopes of keeping them from fleeing to other provinces or U.S. colleges…The Quest for Gold scratch-and-win tickets, five in a $20 package, will provide $2.5-million for Ontario athletes by the end of March, Ontario Minister of Health Promotion Jim Watson said yesterday. That works out to about $1,900 in the pocket of each athlete -- not a sum that dramatically alters an athlete's world, but at least a start, provincial sport officials said…A second round of the lottery, scheduled for the summer, will provide between $5-million and $12-million, depending on sales…"At the 1984 Winter Olympics, 52 per cent of Canada's team were Ontarians," he said. "By 2002, it was down to 22 per cent. At the 1984 Summer Olympics, 52 per cent of the team was from Ontario. In 2004, that was down to 38 per cent. James Christie, Globe and Mail, 1-12-06

In the end, however, the issue - gambling - in the 21st century is not about morals; it is about budgets. When a state has a strong economy and enough revenue from other sources, gaming is bad; when the opposite is true, gaming is not so bad. Three quick examples will illustrate the point; Maryland is on the "gambling is bad" side of the street while New York and Rhode Island are on the "gambling is good" side of street.

Good news for the budget means bad news for slot machines in Maryland, Gov. Robert L. Ehrlich Jr. conceded yesterday, acknowledging that flush state finances will sap the legislative will to act on his top priority. During the 2002 campaign and his first years in office, the governor pushed for slots as the best way to balance the budget without raising taxes. …But with a $1 billion surplus this year and another surplus expected next year, Ehrlich said fiscal need is no longer an effective stick to drive the issue. Andrew A. Green, Baltimore Sun, 1-18-06

Language to amend the Rhode Island Constitution to allow privately owned and operated casinos…is ready to be introduced in the House of Representatives this week…Section 23 would also cement financial details about the operation into the constitution, such as setting a 10-year tax rate of 25 percent on the first $400 million of net casino gaming income (as defined by the General Assembly); 27 percent on income between $400 million and $500 million; 29 percent on income between $500 million and $600 million; 31 percent on income between $600 million and $750 million; 33 percent on income between $750 million and $900 million; 35 percent on income between $900 million and $1 billion and 40 percent on income over $1 billion. Jim Baron, Pawtucket Times, 1-18-06

2006 state budget plan envisions revenue from additional VLT casinos going to assist public schools…New York would add three additional casinos featuring video lottery terminals…The governor's VLT plan would permit any entity--not just racetracks--to submit a bid to the state for a gaming parlor. …The proposal envisions the three casinos opening in two years, with not more than five being located in New York City. Tom Precious, Blood Horse News. 1-18-06

And maybe the clearer it is to everyone that gaming is not a moral issue, the easier it will be to deal with the problems that gaming creates - and it does create problems. When the discussion moves past the moral issues we can begin to do real research and develop effective treatment for those people who become addicted to gaming. Something that is certain to become more prevalent as gaming spreads to every household in the country. And though the following article says most of the measures implemented in Alberta are having little effect, it also says that 60 percent of people interviewed used the "loss counter" and changed their behavior because of it. That is a start. Now if we could just come up with a counter for personal credit cards, we would be on to something.

The first scientific study on electronic warnings built into video lottery terminals to help people control their gambling indicates the features are having limited success at best. "The science of this suggests that there isn't really much evidence that (responsible gaming features) are having an effect, in the sense that they are decreasing time and the amount of money spent on VLTs," says Harold Wynne. He's one of the co-authors of the report, which was funded by the Alberta government. At least three provinces are experimenting with VLTs incorporating "responsible gaming features." In 2003, Alberta Gaming began to introduce new machines with four such features: a clock showing length of play, a counter showing how much in dollars of the gambler's money was in the machine, pop-up reminders of time spent and a banner giving a 1-800 help-line number…study…found most gamblers were aware of the features…Fewer than 10 per cent ever used the pop-up time reminders, while 20 per cent used the clock. Thirty per cent used the money counter as a gambling control strategy, the best result for any of the features…60 per cent of interviewees reported the counter caused them to stop playing, cash out or leave the bar at least once. Still, overall gambling behavior didn't seem to change. Canadian Press, Brandon Sun, 1-16-06

The federal government may be fighting a losing cause in the battle against Internet gambling, but it is not giving up. Americans represent the majority of Internet gamblers, and nearly every site targets Americans and many advertise in fairly conventional venues. Advertising is one place the government can attack; it has attacked the credit card companies with some success, so maybe advertising will be the next frontline of the fight.

The Sporting News agreed to a $7.2 million settlement with the federal government to resolve claims it promoted illegal Internet and telephone gambling in print, on its Web site and on its radio stations. U.S. officials said Friday that the advertising ran from spring 2000 through December 2003. Catherine Hanaway, the U.S. attorney for eastern Missouri, said The Sporting News continued to run the ads for more than six months after the Justice Department sent a letter to the Magazine Publishers of America warning that ads promoting Internet gambling and offshore sports-betting operations were illegal…The Sporting News paid a $4.2 million fine Thursday. The remaining $3 million of the settlement will be for public service ads aimed at dissuading people from gambling over the Internet or via telephone. Associated Press, Ledger, 1-21-06

Gaming is continuing to spread, although at a slower rate as there are fewer opportunities for dramatic expansion. Whenever a state needs money, it is possible that gaming will be considered as a source. There are a few options - raising current gaming taxes, allowing more casinos, games, operating hours and such or introducing new games or old games in new ways. The governor of Illinois had to back up on his keno idea but it illustrates the point. First, we are not talking about keno in the classic sense, the game derived from a Chinese lottery game. Rather we are talking about slot machines with keno as the game. It is important because he proposed to allow the games to be placed in bars and restaurants all over the state. The games would be operated by the state lottery - in many states that could be done without much change in existing laws and regulations. The concept essentially makes the state one giant casino, operated by the government. Oh, but that could not happen, you say. I beg to differ - it has been tried (and the process is still ongoing) in Iowa and Michigan. It will only require an aggressive governor and a state poor enough, and it will be an accomplished fact. It is the future of gaming just as surely as gambling on the Internet is part of the future of gaming.