Jerry Kopel

Casino Election

By Jerry Kopel

Feb. 2, 2007

Sometimes you have to pound on meat with a mallet to make it tender. It's similar to pounding on the voters to get them tender enough to change the casino language in the constitution.
A large number of casino operators want to eliminate the $5 limit on casino bets embedded in the constitution. They will likely want a $100 maximum as a replacement, a similar amount to that passed in the past decade for Deadwood, South Dakota.
In addition, these casinos want new games, (presently limited to slots, poker and black jack) such as roulette and craps, plus extending gambling hours which now require closing at 2 a.m., to possibly 24 hours. Passing any constitutional amendment in 2008 would likely exceed the present $25 million estimated cost to the promoters in winning the campaign. In my estimation, the more changes sought, the higher the cost. 
This year, the casinos are more serious and committed than in several past attempts. The mergers of law firm Brownstein, Hyatt and Farber with a major casino law firm in Nevada (Schreck Brignone) appears, in my opinion, to be built around a priority for passing a major overhaul  of the constitution's betting limits and games in 2008. 
As Michael Douglas once opined in a movie, "greed is good."  It is not that Colorado casinos aren't making money. It is that a number of them want to make more than the fiscal 2006 revenue of $765 million (total wagers minus payouts.)
A higher limit likely won't affect the slot machines as much as table games. Voters might go for a $10 maximum bet after a 15-year span of a $5 limit. After all, a $5 bill in 1990 is worth what in 2007?
Even the smaller Central City casinos might opt in on a $10 limit, but they know their small operations will actually lose more business to Blackhawk if the game tables were expanded and the limit raised to $100.
Most people are not aware that some Nevada casinos were opposed to the casino amendment passed in 1990 and actually spent about $40,000 given to a group that had no idea how to spend it wisely.
Gov. Roy Romer, after the legislature overrode his veto of the lotto game in 1988 continued to oppose legislative gambling bills but showed less inclination to organize opposition to the casino amendment in 1990, despite (as I wrote in this column in 1993) my begging him often that he do so. He decided to concentrate successfully on defeating the 1990 Bruce Amendment, which then passed in 1992. The 1990 casino amendment passed 574,620 to 428,096.
The gaming initiative literature focused heavily on the mom and pop shops providing slot machines, a few in the front or back of a grocery store or a gift shop, and on a heavy tax to help save the historic significance of Central City, Blackhawk and Cripple Creek by adding to the tourist attractions.
Then-Sen. Sally Hopper, chief sponsor of the legislative follow-up to the passage of the constitutional amendment told other senators, according to a 2003 article by Charlie Roos of the Rocky Mountain News (RMN):
"We're not talking about casinos. We're talking about something that would enhance the Western flavor of these towns. We don't want whole buildings turned over to gambling. We're purposely making it unprofitable so that it won't attract the wrong sort of people."
Sorry Sally. The original Gaming Commission, authorized in the constitution to control the gaming industry, in my opinion as well as others, made a sham of what the voters intended. 
The commission members were appointed by the governor. The statute placed the Limited Gaming Act under the Dept. of Revenue whose director John Tipton, later left office to work for an international Switzerland gambling conglomerate.
Business type casinos claimed they would not have been able to squeeze enough slot machines into the spaces allowed by the constitution to make the effort pay. The constitution provides: "No more than 35 percent of the square footage of  any building and no more than 50 percent of any one floor of such building may be used for limited gaming."
As reported in the RMN in 1996 by Rebecca Cantwell on a decision early on to interpret (or ignore) the 35  percent limit:
"Commissioners excluded from the 35 percent limit anything that actually wasn't a gaming machine or its seating: The cashier's cage, the money vault, even the aisles between the machines."
This probably doubled the number of spaces available for slots. J.D. Carelli, a Central City businessman and major promoter of the gaming issue told Cantwell "I believe that single interpretation changed the character of gaming. It was a much looser interpretation than those of us who promoted gaming for Colorado wanted to see."
The same commission in 1993 considered a tax increase on casino revenues according to the RMN. Under pressure from the industry the commission lowered the amount of taxes levied to a an average of 11.5 percent, instead of 15.5 percent. Since then, taxes have gone up or down usually for the larger casinos, depending on the makeup of the commission.
While the constitution required historic facades for casinos, the power to decide what constituted "historic" was given to the municipal governing bodies. That facade emphasis was followed at least partially in Central City and Cripple Creek, but it really doesn't exist anymore in BlackHawk
Once the gaming commission acted on the spacing issue, the large casinos became interested in raising the $5 limit. By October, 1993, the RMN reported a chairman of a Nevada based slot machine distributor, saying "The public is looking for alternatives without limitation, and they'll travel far for it." Of course in 2007 you don't have to leave most states to  enjoy a visit to a casino.. 
Two casino managers in Cripple Creek agreed with the slot machine distributor, according to the RMN. "We'll have real gamblers" said one about revising the law. "And not just recreational types" said the other.
On the other hand, in 1993 the RMN quoted David Johnston,  author of Temples of Chance, "Colorado has done it right, with no-credit  gambling and low stakes. The pressure is already on to turn low stakes into high stakes. But with high stakes comes embezzlement of public funds, business funds and charity funds by compulsive gamblers."
He spoke in opposition at a meeting of lawyers in Denver when casino consultant Steve Grogan promised a casino constitutional amendment drive to raise the limit to $25.00.
There is presently a Colorado organization, Problem Gambling Treatment and Research Center at the University of Denver. Director of training and development is J. Michael Faragher.
He informed me of organizations that contributed about $90,000 in 2006 to the Problem Gambling Coalition of Colorado "to support efforts directed toward education, prevention and treatment of problem gambling": Amistar Casino Black Hawk, Aristocrat Technologies, Golden Mardi Gras, Isle of Capri Casinos, Riviera Casino Black Hawk, and IGT Colorado.
It is a start, but much, much more is needed to treat persons who have wiped out their finances and need to overcome their addiction.
Compulsive gambling will definitely become an issue if the casino bet limit is on the 2008 ballot, especially with new national studies showing a enormous increase in the number of compulsive gamblers.
The casino industry did put out feelers for a constitutional change in 1994 and then backed off.
The Denver Post reported on Nov. 10, 2003, about the possible 2004 casino ballot issue to raise the bet limits to $100 and give the tourist industry an annual $25 million.
If the casino industry is smart, it will avoid putting legislators on the spot by making them vote up or down on a referendum to amend the constitution.
Politically, it is a lose-lose situation, especially if it is tried in 2007, considering the legislature can  only put six articles on the 2008 ballot. Casinos are now major political contributors and anyone running against a legislator will dig deep to connect the dots.
It may cost casinos a little more to go the initiative route, but eligible Colorado voters will sign almost any initiative to do almost anything as witnessed by the ballot issues of the past decade.
(Jerry Kopel served 22 years in the Colorado House and was one of the six conference committee legislators who drafted the final version of the 1991 casino statute.)

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