States continue to embrace gambling

Jun 6, 2006 4:31 AM

State governments are more addicted to gambling revenue than ever.

Twenty-five years ago, gambling was legal in only three states. Now every state except Utah and Hawaii rely on gambling revenues to help avoid raising taxes.

Bets can be placed in 900 casinos — 455 privately run in 11 states, 406 on Indian reservations in 29 states and 29 racetrack casinos (known as racinos) in 11 states.

And at least nine states (Delaware, Georgia, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Ohio and Texas) are considering opening their doors to casino or racetrack gambling.

The 11th and newest state to offer slot machines will be Pennsylvania, once it gets its licensing process in order. After all the licenses are granted, Pennsylvania will have 61,000 slot machines — more than any other state except Nevada.

But awarding the licensing contracts hasn’t been easy. Last week, the Pittsburgh Gaming Task Force failed to endorse any of three applicants to operate a slots casino in Pittsburgh.

In its report, the Task Force said it "is not satisfied with any of the three proposals as they now stand due to inadequacies in or failure to address several areas."

The three applicants included a team comprised of Harrah’s Entertainment and Forest City Enterprises; the Pittsburgh Penguins, Isle of Capri Casinos and Nationwide Realty Investors of Columbus, Ohio; and Detroit businessman Don Barden, who also owns Fitzgerald’s in Las Vegas.

Even though no applicant was recommended, the seven-member Gaming Control Board is expected to use the results of the Task Force’s study to deliver a decision on the license applications by the end of the year.

Besides new gambling sites coming to Pennsylvania, which hopes its casinos will raise $1 billion to cut property taxes, Broward County, Florida this summer will open the state’s first non-tribal casino. Florida voters approved legalized gaming in 2005 despite opposition from Governor Jeb Bush.

In other states, legislators are considering proposals to legalize or expand gambling.

Delaware has been debating a proposal that would open the door to investors who want to build Las Vegas-style casinos that would rival those in Atlantic City.

Arkansas, Alabama and Wyoming are considering joining the 42 states that operate lotteries, including North Carolina, which just started playing on March 30, Oklahoma in October 2005 and Tennessee in 2004.

However, many proposals to expand gaming are languishing this legislative session because the nation’s rosier economy has put pressure on states to seek new revenue sources, said Steve Rittvo, president of Innovation Group, a consulting firm that helps private companies and government officials look at gaming expansion.

"New (gaming) proposals have to be tied directly to a need to raise money for services like education or elder health care," Rittvo said.

But a lull in expansion of gambling is only temporary, predicted Florida State Senator Steven A. Geller, the president of the National Council of Legislators from Gaming States.

"I expect states will start expanding gambling again as soon as they find their pocketbooks are empty again," Geller said.