Jerry Kopel

"Tis not a slot" declared Sen. Elsie Lacy, R-Arapahoe, defending her SB 65's "video lottery terminals at horse and dogtracks" from the slings and arrows of casino operators, who in turn opined "the only legal slot is a casino slot".

The hearing before the Senate Agriculture Committee was one of those rare hearings with both sides passing out baloney. Sen. Lacy's definition of a video lottery terminal, as amended in committee, is:

"A computerized video game machine that, when activated by insertion of currency in the form of bills, plays or simulates the play of a game approved by the (lottery) commission and awards a printed pay voucher redeemable for cash, on the basis of chance."

That's a slot machine, and a slot machine is a lottery, and the state lottery commission could set them up right now, anywhere it wanted to: Race tracks, bars, grocery stores, whatever. The state constitutional amendment allowing the legislature to establish a lottery, gave the legislature total discretion as to what the law could contain, as long as it met the concept of "lottery".

One reason there aren't lottery slot machines in grocery stores is because Gov. Roy Romer would likely grab the first plane back from Washington D.C. and personally strangle each lottery commissioner.

Casino operators passed out their share of baloney. According to Denver Post reporter Thomas Frank "Jeanne Rubin of the (Colorado) bar association testified that (SB 65) seeks to circumvent provisions of the state constitution that limit gambling to areas where voters have approved it." That's a reference to Section 9 of Article 18 of the state constitution allowing "limited gaming" (defined as slot machines, blackjack and poker) in Central City, Black Hawk, and Cripple Creek.

But Section 9 begins "Any provisions of section 2 of this article the contrary notwithstanding, limited gaming (in the three towns) shall be lawful.." Section 2 is the state lottery and Section 9 carves out an "exception" to Section 2. Its true you need voter approval to set up slot machines under Section 9. But you only need the vote of the majority of lottery commissioners (and funding approval from the Joint Budget Committee) to set up slot machines as part of the state lottery.

SB 65 is now in Senate Appropriations Committee, which is chaired by the sponsor of SB 65. And SB 65 is only one of a plethora (that really is the right description) of gambling bills before the legislature again in 1998, a few of minor consequence, but at least one other posing a a significant increase in gambling activity for Colorado, and one intended to wipe out SB 65.

Casino lobbyists aren't going to wait for a veto of SB 65 by Gov. Romer. They have HB 1316 by Rep. Bryan Sullivant, R-Breckenridge and Sen. MaryAnne Tebedo, R-El Paso. This rather short and blunt bill adds video lottery terminals to the statutory definition of a "slot" machine in the casino statute and prohibits the state lottery division from permitting lottery games to be played on a video lottery terminal defined as a slot machine.

Actually HB 1316, being just a bill, really isn't much of a defense if the next governor of Colorado wants "slot" machines at race tracks. A 1999 Sen. Lacy bill would just repeal HB 1316 while also putting the "slots" at the race tracks.

HB 1113 by Rep. Joyce Lawrence, R-Pueblo, would end the lottery prohibition on instant scratch games based on "bingo". As reported to you in the Statesman on Dec. 19th, the State Auditor's report on the Lottery recommended the Lottery "work with the general assembly to establish an instant bingo game" even though Gov. Romer vetoed the same measure in 1997.

The fiscal note to HB 1113 claims "the State Lottery Division believes that the additional cash fund exempt revenue... may be as much as $6 million annually." The State Auditor quotes the Lottery Commission "that an instant bingo game would generate at least an additional $24 million in sales...annually" and these "projections are conservative." The state auditor didn't mention that scratch games are the lottery "game of choice" for compulsive gamblers.

The HB 1113 fiscal note also claims states with bingo scratch games "have seen no decline in charitable gaming as a result.." That statement is too modest. The "real" bingo operators in Colorado don't mind having the new scratch game in operation. Some told me that studies in the 33 states with scratch bingo show INCREASED participation at actual bingo operations as a result.

Will Romer allow HB 1113 to become law? HB 1113 passed the House, 51 to 10 with every Democrat present except Rep. Bob Hagedorn, D-Aurora, voting for it despite the 1997 veto. Perhaps a "messenger" who persuaded Charlie Duke to leave the state senate is now at work tempering the anti-gambling instincts of Gov. Romer.

Meanwhile, Sen. Bishop has introduced SB 103 to extend the life of the state lottery from July l, 1999 to July l, 2014. Based on Sen. Bishop's age and my age, I don't statistically expect either of us to be around in 2014, but who knows?

It makes little sense to have a repeal date that far ahead. None of the present legislators, and probably none of those elected before 2006 will be in the legislature at that time, thanks to term limits.

Before 2014, what various studies have called "the third historical wave of gambling" in the United States will likely have subsided, and the Colorado lottery will have ceased. It will only take a statute to do that, since the constitution says the legislature "may" (not "shall") establish a state-supervised lottery.

Great Outdoors Colorado (GOCO), the barrel into which the lottery funds are poured, would remain in the constitution. It just wouldn't receive any additional lottery funds. By 2014, GOCO will have amassed an enormous amount of money, making it the equivalent in Colorado of the Bishop Trust in Hawaii. GOCO will "wag the dog" for a long time.

Not a bill, but a news story worthy of note appeared in the Wall Street Journal on Feb. 4th regarding Guy B. Snowden, chairman of GTech, who "resigned one day after losing a court battle that revolved around claims he had attempted to bribe his way to running Britain's national lottery. The lottery's director also quit."

Please note: GTech has the COLORADO lottery contract. In 1996, Mr. Snowden testified in the New Jersey federal trial of J. David Smith, who resigned as GTech's national sales manager in 1994, months before he was indicted and convicted on kickbacks of at least $169,5000 from a consulting firm he recommended to GTech.

In a 1996 Journal story after the conviction, the assistant U.S. Attorney who prosecuted the case was quoted "...statements at the trial that GTech spends some $20 million a year on lobbyists and consultants...if they're paying $20 million a year to buy access to public officials, there has to be something wrong with that."

The Journal story this month alleged "GTech's practices in gaining and renewing lottery contracts have been subject to repeated investigations by state and federal authorities, although the company itself has never been indicted. Some former employees and lobbyists have been convicted of crimes..."

Meanwhile, HB 1299 by Rep. Brad Young, R-Lamar, begins its journey through the House. This is the bill to make major changes in bingo operations as suggested by the Dept. of Regulatory Agencies (DORA) Sunset review of 1997.

DORA wanted to move everything except the original licensing of a a bingo operation (restricted by Section 2 of Article 19 of the state constitution to the Secretary of State) to the Dept. of Revenue. But House Business Affairs decided to give the headache to DORA, and that's the way it stands as the bill moved to House Appropriations.

So HB 1299, as introduced, sets up a DORA Division of Charitable Gaming, with a Charitable Gaming Control Commission to make rules, do all the other licensing, oversee disciplinary actions, and investigate. The Division is given the "enforcement" authority, and importantly, the right to reject any new games of chance not already in bingo operations as of July l, 1998. Sunset of the law would be July l, 2003, with a Sunset review in 2002.

As for compulsive gamblers, Rep. Jim Dyer, D-Durango, has HB 1118 on Compulsive Gambling Prevention. Paid for through gambling revenues, it seeks prevention through early education, plus rehabilitation through toll-free gambling hotlines leading to professional help. This is the ONLY bill to surface from the $25,000 study by Rachel Volberg, paid for by the lottery, on compulsive gambling in Colorado.

Jerry Kopel writes a column for the Statesman based on 22 years past experience as a state legislator.

Home  Full archive  Biographies  Colorado history  Colorado legislature  Colorado politics   Colo. & U.S. Constitutions  Ballot issues  Consumer issues  Criminal law  Gambling  Sunrise/sunset (prof. licensing)


Copyright 2015 Jerry Kopel & David Kopel