The Myth of the Level Playing Field

written by I. Nelson Rose

#49 Casino Executive ©Copyright 1999, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, CA.

All things being equal — do gamblers prefer riverboats or land-based casinos? Slot machines or Video Lottery Terminals? Indian bingo or charity bingo?

The answer, of course, is “It depends.”

The question is unanswerable, because all things are never equal. Why not ask, do patrons prefer playing blackjack in Atlantic City casinos or buying California State Lottery Scratchers?

The forms of gambling are radically different. Even if the games can be made the same, there are a myriad of uncontrollable factors that affect whether an operator will thrive or go bankrupt.

Do patrons prefer playing blackjack at Indian casinos in California, or at privately owned casinos in Las Vegas? The tribal casinos have the disadvantage of having to charge a small, additional fee per hand. But if the potential customer lives in San Diego, that extra four-hour drive makes Las Vegas look a lot less attractive.

Facts should never get in the way of a good political argument. Operators found they had a powerful political tool in asking lawmakers for “a level playing field.”

The idea that one form of gambling should not have an unfair advantage over its competitors has been a driving force behind the proliferation of legal gaming. Liberalizing the rules for one operator is like trying to fix a wobbly table by shortening one leg, without measuring the other three legs; then shortening another leg; then another and another.

Making the laws exactly the same for all operators does not result in everyone having an equal opportunity to succeed. Some locations are far from major population centers, or have games that do not have broad-based player appeal. Gambling restrictions must be lifted, for them, so that they can once more have “a level playing field.”

The impact of Indian gaming is the most dramatic example of how this works. In many states, “casino nights” were legalized for charities, with low limits and restricted to only once or twice a year. Connecticut, for example, allowed its charities to offer blackjack, but players had to use script, bet small amounts and be paid off only in merchandise.

By decriminalizing casino gaming, even in this limited form, states accidentally legalized casinos on Indian reservations within their borders. Tribes, being sovereigns and under laws enacted by Congress, were not limited by state regulations. So a federally recognized tribe in Connecticut opened a casino with blackjack, open 24-hours-a-day, with high-stakes and chips redeemable for cash.

Established non-Indian gaming operations throughout the country, especially charity bingo, racetracks and card clubs, were hit hard by the new tribal casinos. They immediately cried for “a level playing field.”

In Washington State, licensed card rooms had been offering blackjack to their patrons, but with a rotating deal. The house was not allowed to participate in the game, let alone be the banker. The proliferation of tribal casinos in the state, even though prohibited from having slot machines, decimated the card club industry.

The clubs demanded that the state legislature do something — and it did. It changed the law, so that licensed card clubs could offer blackjack with a house bank — the same casino game being dealt by tribal casinos. Many reservations in Washington, as throughout the country, are located in remote locations. Allowing privately owned clubs in the middle of cities to offer the exact same game, banking blackjack, as these tribes’ casinos was not a level playing field for them. Patrons would not drive three extra hours and use a ferry crossing just to make the same bet they could make with a ten-minute drive.

Tribes with nearly inaccessible locations desperately needed to be able to offer some form of gaming not available at card clubs, if their casinos were to survive. The state understood and agreed. Compacts were signed allowing tribes to have video lottery terminals. The first machines are being tested now, and they promise to evolve into a gaming device that is indistinguishable from a slot machine.

What are the card rooms, and racetracks, and charity bingo halls going to do when they once again start losing customers to tribal casinos? Easy — they will demand a level playing field, which, in this case, means slot machines.

This scenario has already played out in New Mexico. Charity “Las Vegas Nights” led to full-scale Indian casinos. The governor signed compacts, which were struck down by courts, but the tribal casinos remained opened. To clean up the mess, the state legislature ratified the compacts, but had to also allow slot machines for the state’s racetracks and veterans’ and fraternal organizations.

Tribes in New Mexico have already anticipated the next stage. When clubhouses and tracks in cities have slots, who is going to drive hours into the desert? One way for especially remote tribes to bring back the level playing field is to eliminate the need for the trip at all.

Tribal leaders have testified before Congress that they need proxy play, by telephone and computer, or they cannot get enough patrons to stay in business.

Players can now play Indian bingo from their homes. So racetracks also are demanding the right to take home wagers. It remains to be seen whether home betting is the final, true level playing field.

[Professor Rose can be reached at his web site]


I. Nelson Rose
Professor of Law, Whittier Law School

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