© Copyright 2003. All rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, CA.
Now there are only two: On November 5, 2002, voters in Tennessee amended the State Constitution to create a state lottery, leaving Hawaii and Utah as the only states without some form of legal gambling.
Across the nation, the election showed voters are becoming more comfortable with legal gambling. More pro-gambling candidates for major office won than at any other time in history, and proposals to renew or bring in gaming triumphed.
The November 2002 voting will be remembered as one of the few times that the party in power in the White House also gained control of both houses of Congress in a midterm election. But the biggest winner may have been the gaming industry, which will see renewed growth in racinos, state lotteries and tribal casinos.
Federal: Republicans took over the U.S. Senate. Trent Lott (R.-Miss.), who would have been Majority Leader, self-destructed, so Bill Frist (R.-Tenn.) will replace Tom Daschle (D.-S.D.). This is bad news for casinos, which have become a major financial and political power in Mississippi; Tennessee has no legal gambling, although it just voted in a lottery. Nevada Democrat Harry Reid will be replaced by Kentucky Republican Mitch McConnell as assistant majority leader. This obviously helps horseracing while hurting casinos. John McCain (Az.-R) will become chairman of the Senate Commerce Committee, which is bad news for legal sports betting. Indian gaming lost a friend with the departure of Daniel Inouye (Hi.-D) as Chairman of the Indian Affairs Committee, but gained an even bigger supporter in Ben Nighthorse Campbell (Co.-R), the only Native American member of the U.S. Senate. Overall, casinos and state lotteries will probably lose a little influence in Washington, D.C., while horseracing will gain a lot.
Legal gambling is normally a state, not federal, issue. Governors almost always have the political power to block any expansion, and usually can swing the state legislature in favor of expansion.
Alabama: Gov. Don Siegelman (D.) lost reelection by a squeaker. He supported creating a state lottery for education; his opponent, Bob Riley (R.), a staunch conservative, opposes legal gambling. Four years ago Siegelman ousted incumbent Gov. Fob James, Jr. (R.), on the lottery issue, but conservative religious groups from all over the country converged on Alabama and defeated the proposed constitutional amendment in Oct. 1999. The House is considering a bill to amend the State Constitution to allow lotteries; the real goal is six casinos to compete against tribal gaming. The floundering dog tracks gained simulcasting through the State Legislature, but so far have not been able to get slot machines.
Arizona: Prop. 202, sponsored by Gov. Jane Hull and 17 gaming tribes, won 51.6% to 48.2%; competing proposals from the tracks and the Colorado River Indian Tribes were soundly defeated in the most expensive campaign in the state’s history. Janet Napolitano (D.), who supported Prop. 202, will be governor, defeating anti-gambling Matt Salmon (R.). Lawsuits, will, of course, continue, but the tracks have lost some political influence. Arizona’s casino gaming will look much like today’s, only bigger: up to 29 casinos, 998 slot machines per tribe with a statewide cap of 15,675, 100 blackjack and poker tables per casino, $25 slots, $500 blackjack, $75/$150 poker, non-gaming tribes may transfer their slot allotments. Voters approved extending the state lottery, again.
Arkansas: Staunch anti-gambling Gov. Mike Huckabee (R.) was reelected, 52%-48%. The Attorney General has approved a proposal to amend the State Constitution to allow a State Lottery and casinos in nine counties, but a court challenge remains. On Nov. 7, 2000, voters defeated, 65% to 35%, due to the state’s active religious organizations and opposition from Mississippi’s casinos, the most recent initiative for widespread casinos, charity raffles and bingo, and a State Lottery. Similar competing constitutional amendments had been tried in 1990, 1994, 1996 and 1999.
California: Gov. Gray Davis spent $68 million and still could not get a majority of the vote, and only edged out his Republican opponent. Davis’ embarrassment is a great opportunity for California’s tribes. He will rely on the political wisdom that voters have short memories, and will run for President. The state budget is at least $34 billion in the red. Davis is renegotiating tribal compacts. If the tribes offer some small percentage to the state, say 7% of their casino win, and give Davis large campaign contributions, he will give them anything they want.
Colorado: Incumbent Gov. Bill Owen (R.) trounced his opponents. He favors the status quo on gaming and lotteries. The Nov. 2003 ballot will have a proposed initiative for racinos.
Connecticut: Incumbent Gov. John G. Rowland (R.) won, meaning continued luke-warm support for gaming. Gov. Rowland and Legislature believe, incorrectly, that they will prevent more Indian casinos by repealing the charity Las Vegas night law and simply refusing to negotiate any new compacts.
Florida: Reelected Gov. Jeb Bush (R.) will continue his opposition to the expansion of gambling .Senate President Jim King is pushing for VLTs at the state’s 32 horse tracks, dog tracks and jai alai frontons, but House Speaker Johnnie Byrd and Gov. Bush are opposed.
Georgia: Sonny Perdue (R.) beat incumbent Gov. Roy Barnes (D.) in a no-win race for legal gambling: they both opposed video poker and Indian gaming; Perdue is not a fan of the state’s enormously successful state lottery.
Idaho: A victory for Indian gaming: Voters approved, 58%-42%, letting tribes have 3,000 Video Lottery Terminals. Courts will decide whether VLTs are prohibited by the State Constitution’s ban on slot machines. But, incumbent Gov. Dirk Kempthorne (R.) beat Jerry Brady (D.), who was more in favor of tribal casinos.
Illinois: Rod Blagojevich (D.) beat Jim Ryan (R.), and Democrats also took control of both houses. The two gubernatorial candidates opposed the proposal for a casino in Rosemont. Blagojevich approved the highest casino tax in the country: 50%, and he wants to push it to 70% or even have the state own the casinos. The Legislature is pushing for a lower tax, more gaming positions and licenses, and racinos, and Mayor Richard Daley want Chicago to be the first city to own a casino, but Blagojevich says he will veto any budget that includes an expansion of gambling. be more casino licenses issued maybe even in Chicago. Meanwhile casino projects are being canceled.
Indiana: No changes in the Legislature, which means the new high tax rate on riverboat casinos will stay.
Iowa: Another big win for gaming. By a landslide, voters opted to keep casinos and racinos for eight more years, in all 11 counties that had the issue on the ballot. Congressman Jim Leach, one of Internet gambling’s leading foes, was reelected with only 52%.
Kansas: Kathleen Sebelius (D.), who would allow racinos, defeated anti-gambling Tim Shallenburg (R.). Bills to expand gaming have been introduced, from slots at tracks and Lottery outlets to a casino at Dodge City’s Boot Hill Museum. The Legislature probably won’t pass any, though the Senate almost approved allowing full casinos in all 105 counties.
Kentucky: The Legislature remains split, with Republicans controlling the Senate and Democrats the House. This has so far stymied Gov. Patton’s less-than-whole-hearted push for casinos or racinos.
Louisiana: We do not know if the voters of Cameron Parish want a riverboat casino; courts blocked the ballot referendum. No major changes in the Legislature, which has agreed to a moratorium until another economic study is completed.
Maine: The towns of Fairfield, Sanford and Princeton approved casinos in nonbinding elections, but 13 other towns have taken action against casinos since Spring 2002, according to MaineToday.com (11/7/2002). Both candidates for governor say they oppose casinos, but John Baldacci (D.), will be not nearly as anti- as outgoing Gov. Angus King. The Passamaquoddy and Penobscot Nation are gathering signatures, but their casino will never pass in the present political atmosphere.
Maryland: A major victory for racinos. Rep. Robert Erlich Jr., (R.), elected governor, wants to put gaming devices at racetracks to compete with nearby Delaware’s and to lessen the budget deficit. He defeated Kathleen Kennedy Townsend (D.), and replaces Gov. Parris N. Glendening, both opposed to legal gambling. The Legislature is already talking about putting it on the ballot in 2003 or 2004.
Massachusetts: Mitt Romney (R.), the next governor, supports putting gaming devices at racetracks to help balance the budget. Holyoke voted 59% – 41% in a non-binding referendum to support bringing a casino to the town.
Michigan: Jennifer Granholm (D.) edged out Dick Posthumus (R.) for governor, but neither was in favor of expanded gambling. The House has approved turning the state’s seven tracks into racinos. In Nov. 1996, voters approved three casinos for Detroit, despite the strong opposition of then-Gov. John Engler – the first time in American history that citizens of a state voted to allow new high-stakes commercial casinos in the face of active opposition.
Minnesota: The U.S. Senate race between the Norm Coleman (R.) and former Vice-President Walter F. Mondale attracted international attention. Little noticed was another Republican victory, Tim Pawlenty won the gubernatorial race with only 44%. Neither successful candidates spoke out publicly about legal gambling. The Legislature is considering proposals to legalize sports betting (in violation of federal law), allow slots in bars, and open state-owned casinos, including one for the Minneapolis-St. Paul International Airport, limited to airline passengers, and another to have a state-tribe casino St. Paul. The first state-licensed card club opened April 19, 2000 at Canterbury Park in Shakopee and a House committee approved turning it into a full casino
Missouri: State Republicans, who have not shown any interest in any kind of large tax increase, took control of the state House for the first time in nearly 50 years. Add this to the Missouri Gaming Commission’s criticism of the economics of Illinois’s new 50% tax on large casino investments and it looks like Missouri’s riverboat casinos are safe for a while. The Legislature would probably go along with lifting the $500 loss limit if the casinos agreed to a small tax increase, but no change so far.
Montana: A proposal by Butte legislators, “Destination Montana,” to create a “music and entertainment district,” with 10 or 11 casinos, is naturally getting support from the state’s five tribes. Under the present plan, the tribes would co-own only one casino, which might not stand up in court. Bucking a national trend, the Legislature decided not to raise taxes on video poker and keno machines, which are more than 90% of the state’s legal gambling.
Nebraska: A loss for legal gaming. Pro-gambling incumbent Stormy Dean (D.) was wiped out in the gubernatorial race by anti Mike Johanns (R.), who would allow only a small number of additional casinos at most, and no more slots. But bills for Indian and private casinos have been introduced and are gathering support, many focusing on competing with casinos in Iowa.
Nevada: It is sometimes said, “The problem with political jokes is they sometimes get elected.” But usually they do not. Joe Neal (D.) ran on a platform of raising casino taxes – in Nevada! He got 22%, but did beat “None of the above.” Voters also overwhelmingly rejected a constitutional amendment, which would have prevented anyone possessing up to three ounces of marijuana from being prosecuted; pot use for medicinal purposes is already allowed. The marijuana backers said they purposely chose Nevada. The state’s tradition of freedom, including legal gambling and prostitution, comes from its history on the western frontier. It is not a politically liberal state.
New Hampshire: Outgoing Gov. Jeanne Shaheen (D.), who supported using slots to raise money, will not be going to the U.S. Senate, beaten by former Presidential speech-writer John Sununu (R.). The Legislature, which blocked Shaheen’s push for racinos, did not change. Both candidates for governor oppose legal gambling; Craig Benson (R.) won.
New Jersey: Atlantic City casinos lost a strong voice in the U.S. House of Representatives when Robert G. Torricelli (D.) quit to make a disastrous run for the U.S. Senate. Another Democrat, Frank R. Lautenberg, did win that race, but will probably not be as actively against Indian and Internet gaming as Torricelli was. Casinos face a potential double hit: Gov. James E. McGreevey has said he wants casino taxes raised from 8% to 10%, a 6% sales tax on comps, 7% hotel tax and is again threatening racinos, to solve the budget problem. Racinos and VLTs won’t happen – casinos’ political power is much greater than the State Lottery and tracks’.
New Mexico: Tribes lost a friend with the retirement of Gov. Gary Johnson. Bill Richardson (D.), supports the status quo on Indian casinos, but would endorse another racetrack with slots, if the voters approve.
New York: Another big win for legal gambling. Incumbent Gov. George Pataki (R.), an advocate of expanding Indian gaming and establishing racinos, beat Carl McCall (D.), who called for a casino moratorium.
North Dakota: A symbolic breakthrough for state lotteries. North Dakota voters in 1986 joined only three other states this century in not approving a state lottery. In November 2002 they changed their mind, voting in a state lottery with the right to join multi-state games, like PowerBall.
Ohio: Incumbent Gov. Bob Taft (R.), easily reelected, opposes slots at tracks, telephone account wagering and other proposed expansions of gambling. But the Legislature may put it on the ballot anyway, as a proposed Constitutional amendment.
Oklahoma: Brad Henry (D.) squeaked by anti-gambling former NFL player Steve Largent to be the next governor. Gov. Henry wants the voters to decide if the state should have a lottery, but the Legislature may not pass the referendum. He is also in secret compact negotiations. The Legislature failed to act, so voters made it a felony to engage in any activity associated with cockfighting.
Oregon: Ted Kulongaski (D.), who resigned from the state Supreme Court to run for governor, probably knows more about the laws and realities of legal gambling than any other state chief executive. As Attorney General, he headed the Governor’s Task Force to study gambling in Oregon. He invited me to be the lead witness. I found him to be knowledgeable and unbiased, determined to hear all sides of the issue before reaching conclusions.
Pennsylvania: Another big victory, which shows how far legal gambling has come. Fifty years ago, being associated with any form of gambling, legal or not, was the kiss of death for a candidate. This year, both candidates for governor supported the idea of racinos. Ed Rendell (D.), won by a landslide and immediately announced that his top priority is to lower property taxes by allowing slot machines at the state’s five racetracks. In an interesting twist, an “anti” has proposed auctioning slot licenses to anyone, which would bring in more money but kill off track support for expansion.
Rhode Island: Donald L. Carcieri (R.) was elected governor, without taking a strong public position on gaming. The State House of Representatives created a Special Commission to Study Gaming which must hold at least one hearing in each county and report back by April 1, 2003. This could delay a statewide vote on the hot issue of a casino for the Narragansett Tribe, wanted also by the impoverished community of West Warwick, until Fall 2004.
South Carolina: In 1998, Jim Hodges (D.) beat incumbent Gov. David Beasley (R.) by not opposing video poker and by supporting a state lottery, which the voters then authorized in Nov. 2000. In 2002 Hodges lost to Mark Sanford (R.), who had opposed the state lottery.
South Dakota: Mike Rounds (R.) won the governor’s race; he is basically in favor of the status quo. Native Americans across the country campaigned for Attorney General candidate Ron Volesky (D.), a member of the Standing Rock Sioux Tribe, but he lost to Larry Long (R.).
Tennessee: A very big win. Tennessee has had gambling; charity bingo was closed down in scandal and parimutuel betting was authorized, but no track was built. Now that the voters have amended the State Constitution allowing a state lottery, the Legislature will have to go along, especially since the new governor, Phil Bredesen (D.) supports the lottery. This means 48 states and all territories of the U.S. will now have some form of commercial gambling.
Texas: Incumbent Rick Perry (R.), an opponent of all gambling, especially Indian casinos, was reelected, beating pro-gaming Tony Sanchez (D.). John Cornyn (R.), a crusading A.G. against Internet gambling, is going to the U.S. Senate.
Vermont: Jim Douglas (R.), had not taken a strong position publicly on gambling, was elected governor. He now says he is opposed to any expansion.
Washington: Bills have been introduced to allow slots in bars, restaurants, card rooms, bowling alleys, bingo parlors, of course, race tracks, to compete against the 20 tribes with casinos. Voters turned down proposals for tribal slots in 1995 and 1996. But the tribes now have 18,900 slot-like VLTs, as well as linked bingo machines. In an attempt to level the playing field, the Legislature allowed privately owned cardrooms to have house-banked blackjack. There are now more than 40 mini-casinos. The State Gambling Commission is debating increasing betting limits while Gov. Locke supports bills to limit their growth and a few cities are considering bans.
West Virginia: State law allows casinos in historic hotels, restricted to registered guests. The catch – local voters have to approve. Greenbrier rejected the idea in 2000; Huntington voters did the same in 2002.
Wisconsin: A statewide win for Indian gaming. Jim Doyle (D.), who favors expansion, defeated an anti, Scott McCallum (R.). But in Wausau, voters turned down a proposal for a casino to be owned by the Ho-Chunk tribe by a margin of two-to-one.
Wyoming: Dave Freudenthal (D.) is the new governor; he has not taken a strong public position on gambling, but he signed into law a bill allowing at-home betting on horse races; five more pro-gambling bills were introduced in the Jan. 2003 session.[Professor Rose can be reached at his Web Site: www.GamblingAndTheLaw.com]
I. NELSON ROSE
Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world’s leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.
Professor Rose is the author of more than 300 books, articles, book chapters and columns. He is best known for his internationally syndicated column, “Gambling and the Law®,” and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.
Professor Rose is currently working on two books, which will be published in 2002. He is co-authoring the first casebook on gaming law, Gaming Law: Cases and Materials, for Matthew Bender, and, for Mary Ann Liebert Publishers, Gambling and the Law®: The Law of Internet Gambling.
A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.
With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.