It’s a slow year for gaming referendum. Since gaming has expanded across the U.S., there are only a few states holding out, and some that already have gaming are revisiting it in one way or another. The Tuesday general election should determine the future of gaming in Arkansas, Florida, Illinois (mostly Chicago), and Idaho. And a ballot question in Nevada could have an impact on the major casino companies.
ARKANSAS
On November 6, Arkansas voters will determine if they support a constitutional amendment allowing four casinos. Gambling would be expanded at Southland greyhound racetrack in West Memphis and Oaklawn horse racetrack in Hot Springs, which offer electronic games of skill, and one new casino would open in Pope and Jefferson counties. The prospects for passage look good according to a recent poll from Hendrix College, indicating 49 percent of respondents approve Issue 4 and 43 percent oppose it; a previous poll showed just 41 percent of voters approved the measure and 48 percent were against it.
Supporters of Issue 4 said casino gambling would generate an estimated $120 million in annual tax revenue, with 55 percent going to the state’s general fund. Also they said legalizing casinos would keep money in Arkansas that residents spend on gambling in other states. A recent survey showed about 30 percent of Arkansans said they regularly gambled at out-of-state casinos. Southland Vice President of Governmental Affairs Jack McNeill said, “There’s 1.14 million trips of Arkansans going to Mississippi every year, we think it’s even more in Oklahoma and there’s opportunity to invest more, do more and give people a reason to keep money in Arkansas.”
Driving Arkansas Forward, the political committee behind Issue 4, reported raising $4.33 million, including $2.76 million from the Downstream Development Authority of the Quapaw Tribe in Quapaw, Oklahoma, and $1.56 million from the Cherokee Nation Businesses LLC of Catoosa, Oklahoma; it spent $4.17 million through September 30.
Glen White, spokesman for Southland’s parent company, Delaware North, said, “If the measure is approved by voters, we plan to make a substantial investment to further enhance Southland as a full-fledged casino and premier gaming and entertainment destination, which we estimate would create 250 additional jobs, as well as boost construction jobs and allow us to increase our already significant contributions to the regional economy.”
Issue 4 opponents include the Arkansas Family Council. President Jerry Cox said, “No state is going to gamble its way to prosperity. People claim that this is good for the economy and it’s good for business. The only people it’s good for are the people who run the casinos.” At the recent Arkansas State Baptist Convention in Jonesboro, attendees passed a resolution against Issue 4,”denying the gambling industry the opportunity to prey on the weakest, most vulnerable and most desperate of our fellow Arkansans.”
In response, Driving Arkansas Forward Counsel Nate Steel stated, “There are a number of faith leaders and organizations who realize, like most Arkansans, that what the ‘weakest, most vulnerable, and most desperate’ among us need is jobs. Issue 4 creates 6,000 good-paying jobs with benefits and has a $5.8 billion economic impact over the next 10 years according to the Arkansas Economic Development Institute at UALR.”
Steel said the proposed tax rate on casino revenue would start at 13 percent and increase to 20 percent on net gaming receipts above $150 million. Issue 4 also includes $200,000 for problem gambling, which, Steel said, is “intended as a minimum to replace the funding that the legislature cut in 2015.”
Quapaw Tribe Chairman John Berrey said if the tribe is granted a casino license in Jefferson County, it will develop a $200 million destination resort, creating a minimum of 1,000 full-time jobs. In Pine Bluff, the Chamber of Commerce Issues & Legislation Committee Chairman Duke Fakouri the chamber supports Issue 4 because it “will mean economic growth for our community area and tax revenue from the casino will also provide city and county governments with funding for programs at a time when budget restraints are restricting growth and affecting services.”
Regarding a Pope County casino, Cherokee Nation Businesses Chief Executive Officer Shawn Slaton said, “If the people of Arkansas choose to amend their constitution and allow gaming, and if Pope County residents agree that gaming will bring economic development and additional jobs to the area, we’d be very enthusiastic about pursuing a presence there. The decision ultimately lies in the will of the people of Arkansas.”
CNB Executive Vice President Chuck Garrett added a minimum investment of $100 million would be required for a casino in Pope County. “We are committed to that investment, but would work with Pope County to determine their needs, desires and concerns before building a venue appropriate for that market,” Garrett said.
A proposed constitutional amendment authorizing casinos in last appeared on the ballot in 2000; more than 309,000 people voted for it but more than 544,000 people voted against it, according to the secretary of state’s website. That amendment would have allowed casinos in six counties, established a statewide lottery and legalized charitable bingo. Charitable raffles and bingo games were not approved by Arkansas voters until 2006.
FLORIDA
On November 6, Florida voters will have two important decisions to make that will dramatically impact gaming and racing in the state.
Amendment 3 would do exactly what the title says: “Voter Control of Gambling in Florida.” If passed, the legislature will have no say over the legalization of gambling in any region of Florida beyond what currently exists: Several Indian casinos—primarily owned by the Seminole Tribe—and a few racinos. Not surprisingly, one huge donor to this effort is the tribe, in partnership with the Walt Disney Company, which fears a huge impact on its family resorts should more gambling be introduced in the state.
Here’s the ballot summary:
“This amendment ensures that Florida voters shall have the exclusive right to decide whether to authorize casino gambling by requiring that in order for casino gambling to be authorized under Florida law, it must be approved by Florida voters pursuant to Article XI, Section 3 of the Florida Constitution. Affects articles X and XI. Defines casino gambling and clarifies that this amendment does not conflict with federal law regarding state/tribal compacts.”
The Seminoles and Disney have contributed more than $15 million each to the campaign, Voters in Charge, which was also endorsed by the Florida Chamber of Commerce.
On the opposing side, you find the DFS giants, FanDuel and DraftKings, but it’s not fantasy sports that is driving their opposition. It’s sports betting, since each company is already leaving behind their DFS roots to become sports betting concerns. They claim if this bill passes, it will become virtually impossible to legalize sports betting in Florida.
The Poker Alliance is also opposed to Amendment 3, which will need 60 percent of the voters to be approved.
Floridians will also determine the fate of greyhound racing on Tuesday. A proposed constitutional amendment, Amendment 13, would ban it by 2021 and potentially end the declining sport throughout the nation. Fifty racetracks have closed in the 1990s. Florida has the most with 11. Two tracks remain in West Virginia and one each in Alabama, Arkansas and Iowa. In Texas, three tracks rotate an annual meet.
Animal rights groups and other Amendment 13 supporters have said dogs at the state’s racetracks often are locked in crates up to 23 hours a day, some suffering abuse and they all risk injuries. Humane Society of the United States Florida Director Kate MacFall said, “This industry is on its way out, but meanwhile dogs are suffering.” Opponents said records show, on average, every week two of the state’s approximately 8,000 racing dogs die of injury or illness.
However, Palm Beach Kennel Club Trainer Arthur Agganis said, “If reincarnation exists, people should want to come back as a racing dog.” Agganis, who has been running greyhounds for 43 years added greyhounds are treated better than most pets and are happiest when competing. He said his 120 dogs are off-leach three hours a day, and get walks, massages and whirlpool baths. He has five employees and noted the industry supports 3,000 jobs. “We police our own business. If we see something, see anybody do anything at all wrong, they are out,” he stated.
Amendment 13 needs 60 percent approval to pass.
Florida became the first state to legalize betting on greyhound racing in 1931. Today the remaining tracks, if they offer poker rooms, are required to offer live racing and accept wagers on simulcast horseraces. Amendment 13 would decouple live dog racing from those more lucrative side businesses.
Since 1992, the amount wagered on greyhound racing in Florida dropped from $1.5 billion to around $200 million in 2017, according to state records. Five tracks reported losses after paying bettors, purses and taxes, and the then-12 tracks’ combined net revenue on live racing was $20 million–about one-fifth their poker net.
Still, racing proponents said state figures are misleading for popular tracks that simulcast races to betting parlors internationally, because that revenue is not reported. Palm Beach spokeswoman Theresa Hume said the track telecasts races in 35 countries and 20 states. She would not disclose that revenue, but stated the track would lose money if greyhound racing ends, even with poker and simulcast horse wagering. “We are successful and profitable with greyhound racing and want to continue,” Hume said.
IDAHO
Proposition 1, which would allow historical racing machines to be deployed at Idaho’s racetracks, has a storied, controversial history.
Five years ago, the Idaho Horse Racing industry requested that the legislature adopt a bill allowing the racetracks to have machines that would allow betting on historical races; where the names and dates of the races are removed, but the statistics are kept. The machines had proven successful in other states in giving racetracks a predictable, steady stream of revenue, and rescuing a moribund industry.
The legislature passed House Bill 220.
Hundreds of the machines were deployed Les Bois Park in Boise, Sandy Downs in Idaho Falls, and Greyhound Park and event Center in North Idaho and proved to be very lucrative.
But they were soon subject to intense criticism by some who said they looked and sounded too much like slot machines. This violated the gaming tribes’ monopoly on such gaming, they said.
Former Idaho Racing Commission Executive Director, Frank Lamb observed at the time, ”They look like slot machines because they’re supposed to look like slot machines. This is what we need to do to get people to play.”
Ken Andrus, a member of the legislature at the time, explained: “Article III, section 20 of the Idaho Constitution states: (2) No activities permitted by subsection (1) shall employ any form of casino gambling including … slot machines, or employ any electronic or electromechanical imitation or simulation of any form of casino gambling.”
Andrus argued that the legislature was bound to repeal House Bill 220. The legislature quickly passed a ban on the machines, which Governor Clement Leroy “Butch” Otter vetoed—or thought he did. But his veto came past the deadline and so the bill became law.
The racetracks were returned to square one, so they turned to the ballot initiative to amend the state
Prop. 1 would allow the historical racing machines at any facility that may offer simulcast wagering, plus racetracks. Treasure Valley Racing, the proponent, argues that this is necessary to save the Idaho racing industry and that it will create jobs and will funnel some funding to schools, to youth programs, to a breed distribution account and to the state racing commission.
Andrus is now the chairman of Idaho United Against Prop 1. He argues that the proposition’s claims of helping education and creating jobs are misleading and that it will act as a regressive “tax” to encourage problem gambling and extract wealth from the surrounding community.
ILLINOIS
Chicago mayoral candidate Gery Chico said he supports a Chicago casino as a way to partially help solve the city’s public employee pension crisis. One of 15 mayoral candidates, Chico supported a Chicago casino when he ran in 2011 and finished a distant second against Mayor Rahm Emanuel, who said he would not run for a third term.
Chico was chief of staff to former Mayor Richard M. Daley when Daley announced a casino and adult theme park in downtown Chicago, to be developed by three Las Vegas casino operators. The project never happened. But with Democrat J.B. Pritzker poised to defeat Governor Bruce Rauner on November 6, Chico believes Chicago could finally get a casino.
Despite the local market’s saturation, Chico estimated a Chicago casino could generate “up to $300 million a year for the city, depending on the ownership and tax structure. This kind of project would create thousands of construction and permanent jobs for our residents. It would create business for our businesses in Chicago and it would attract even more tourists,” Chico said.
He added, “This idea has been discussed for years. And since our legislature will likely be considering sports betting now, it’s time to seize the opportunity and see if we can do this the right way in Chicago instead of simply taxing our citizens. Let’s stop sending the Illinois gambling dollars to Indiana.”
Chico, chief of staff under Mayor Richard Daley, said he would prefer to avoid raising property taxes to cover pension insolvency. “I’m not going to impulsively hit the pedal on property taxes. That’s not fair to Chicagoans. I am 100 percent committed to looking for alternative sources of revenue first before going to taxpayers to foot the bill,” he said.
MARYLAND
Question 1 will ask Maryland voters to amend the state constitution to direct all revenues raised from the state lottery and six casinos to education and nothing else. That includes all revenues from video lottery terminals and table games.
The voters amended the constitution in 2009 to allow slots and table games and creating an education fund that was supposed to be collected from casinos.
Question 1 was written by state Senator Andrew Serafini. But some critics say it was written so confusingly that many voters will skip it rather than try to puzzle out its meaning.
According to the senator, the way the constitution is currently written, gaming revenues get mixed in with the general fund. “Now the idea is the revenue will definitely go to education. It can’t be used for anything else,” Serafini told LocalDVM.com.
Although that’s the way the amendment is written, it will take a while for all of the revenue to actually go to schools, perhaps until 2023.
Once it does shift over, more than $517 million will be directed to the schools.
NEVADA
Question 3 on the Nevada ballot pits billionaires against each other. The ballot question asks voters if they want to deregulate electricity prices or leave them up to the monopoly provider, NV Energy. On the NV Energy side is Warren Buffet, the chairman of the company’s parent, who wants to keep the rates under his control. On the other side it Las Vegas Sands Chairman Sheldon Adelson and his rich casino buddies, who together paid in excess of $170 million to exit NV Energy and buy their power elsewhere, but still under rates determined by NV Energy.
For the average voter, it’s a confusing subject. While the “Yes” vote would deregulate energy prices, it could result in increased prices for residential units but decreased prices for the big companies. Also in question is its impact on Nevada’s burgeoning solar power industry. A bill last year allows homeowners to sell excess energy produced by their solar panels back to NV Energy, but a law deregulating electric rates may upend that. There’s also a question if natural gas prices would increase because currently NV Energy shares the transportation cost, which may go away if deregulation goes into effect.
So while the impact is far from certain, the winners will be rich one way or another.
