Voters key to gaming expansion

Nov 7, 2006 6:50 AM

Tuesday is Election Day and there are 10 states that could be affected by gubernatorial elections, gaming referendums, and/or changes in legislative control.

If the early polls are accurate, we could see a number of key states, such as California, Kansas, Maryland and Florida elect pro-gaming governors that could lead to more gaming initiatives in 2007.

At press time, pro gaming governors in California, Kansas, Maryland and Florida were leading in the early polls which, would bode well for gaming expansion in these states. Here are states where election outcomes could impact gaming initiatives

California: The re-election of Governor Schwarzenegger who presently is leading by a comfortable margin of more than 16% would be the most pro-gaming outcome of the gubernatorial election in California and could result in the addition of more than 20,000 slot machines in the state. The Governor had his share of disagreement with the Native American gaming industry early on, but has lately been seeking more amenable terms with tribes ahead of the 2006 gubernatorial election and has found their support.

Within the past few months, the Governor has struck agreements with six tribes that would allow them to expand the number of slot machines. The first, a gaming compact between California and Agua Caliente that allows the tribe to open a third casino with 3,000 additional slot machines, was confirmation of the Governor’s plans. This approval opened the door for other agreements with key tribes such as the Pechanga and Morongo. But, unfortunately the state legislature was unable to approve the expanded compacts by the end of the legislative session on August 31. Now the tribes will have to wait until January to see if they can get approval for the new deals.

Texas: The future of casino gambling expansion in Texas may hinge on the hope that a new governor would be elected in Texas. Incumbent Rick Perry is leading in the polls, but his proposal for legalizing VLTs at horse and dog racing tracks was put off due to pressure from social and religious conservatives. Since then he has been largely opposed to gambling expansion. The other three candidates are generally viewed as proponents of gaming.

Ohio: This is the only state where we could see a direct slot outcome on Election Day, with voters set to decide on whether or not to allow up to 31,500 video lottery terminals. The vote to introduce slot machines in this state appears headed for a photo finish with polls showing 40% are in favor of the proposal, 39% are against it, and 22% are still undecided.

Indiana: There is a vote in Clark County to allow expanded gaming, but press reports suggest there is a low probability of it passing.

Rhode Island: The prospects for a casino in West Warwick by the Narragansett tribe and Harrah’s Entertainment seem dim with latest polls showing 51 percent of the voters against the idea, 37% supporting it and 12% still undecided.

Kansas: The future of gambling in Kansas seems to be dependent more on the legislature than on the gubernatorial elections. The incumbent governor Democrat Kathleen Sebelius, who is comfortably leading the polls by a margin of 13%, has been a proponent for gambling in the state. She had signed compacts permitting the Kickapoo, Sac and Fox tribes to open a casino in Wyandotte County but this was rejected by the state legislature. Similar efforts to expand casino gaming in Kansas met with the same fate. However, there could be a fresh debate on casinos with a study this year concluding that the state needed to come up with approximately $470 million more for schools.

Maryland: The introduction and passage of slots may be dependent more on the state legislature, specifically the House, than the Governor. Both political parties have favored slot machines in the past to boost business at racetracks such as Pimlico and Laurel Park. Both houses have passed bills over the last few years but have failed to agree on a single common measure yet. The gambling issue usually faces stiff opposition from House leaders.

Florida: After conferring with Florida gaming executives and politicians at the Florida Gaming Summit in October, it does not appear that a new governor will have a major short-term impact on the status of gaming.

Illinois: Gaming initiatives appear likely in 2007 in Illinois, however the methodology will be determined by who is governor. The incumbent Gov. Rod Blagojevich has proposed to raise around $10-$15 billion dollars through the privatization of the state lottery. In contrast, his opponent Republican Judy Baar Topinka plans to raise revenues for education by building a land based casino in Chicago and expanding gaming at the state’s nine riverboat casinos. Polls suggest Blagojevich has a comfortable lead of around 11.8% over Topinka.