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Missouri, other states go all in, expand gaming to plug the budget

Monday, March 15, 2010 | 4:30 p.m. CDT; updated 9:30 a.m. CDT, Monday, April 26, 2010

DES MOINES, Iowa — Faced with a drop in gambling revenue, states are adding games, considering new casinos and increasing lottery options — anything to keep their cut of the profits rolling in.

States are adamant that they don't want to take advantage of anyone, but with budgets in free-fall and tax increases a losing hand politically, lawmakers acknowledge they are dependent on gambling dollars.

At least 18 states this year are looking to expand games of chance because of a drop-off of anywhere from 5 to 14 percent in the money they collect from casinos, horse racing, lotteries or other gambling.

"Absolutely, we're addicted to gambling dollars," said Iowa state Rep. Kraig Paulsen, the House Republican leader and an opponent of plans to expand gambling in Iowa, which already receives about $300 million a year from the industry. "The current budget couldn't be close to being balanced without that money."

The idea of luring people to the craps tables when they are being battered by the recession is an awkward one for state governments — a point that has been raised by people who deal with the collateral damage from gambling.

The new blitz "makes gambling more enticing, makes people more curious," said Doug Billingsley, whose treatment center provides counseling for problem gamblers in Iowa.

In many states, the funds for helping problem gamblers have been cut sharply because of the budget problems.

Some gamblers say they don't know how they can afford to wager more when they are earning less.

"People don't have as much to spend," said Freda Lofthus, 71, as she was playing slot machines at Prairie Meadows Racetrack and Casino near Des Moines. "I spend about half of what I used to."

But in state capitols, the urgent budget problems trump other concerns.

Pennsylvania, where recently legalized casinos have installed 25,000 slot machines over the past few years, is among states now allowing table games, such as poker, blackjack, roulette and craps. New York is putting 4,500 video lottery terminals at the Aqueduct Racetrack in Queens. Connecticut Gov. M. Jodi Rell wants to offer keno in restaurants so that people can gamble while they eat.

Socially conservative states are no less ambitious. Lottery ticket machines have been installed in grocery stores in Florida. Florida joined Powerball last year and is considering a second multistate game.

Kansas is promoting the outlaw ambiance of Dodge City, which now lures gamblers with 600 slot machines and a full spread of gaming tables. Missouri casinos have upgraded their slots with dazzling 3-D graphics and themes like "Star Wars" and "The Wizard of Oz."

"As the recession became deeper, that expected revenue became more important," said Shaun Adamec, a spokesman for Gov. Martin O'Malley of Maryland, where at least 10,000 slot machines are being installed in five locations.

The only alternative in Maryland and elsewhere would be to raise taxes. "There's no appetite in the Legislature for an even modest tax increase," said Gary Tuma, a spokesman for Gov. Ed Rendell of Pennsylvania, which hopes for an additional $140 million in the 2010-11 fiscal year from its gambling expansion.

Iowa already has 17 state-licensed casinos, and Gov. Chet Culver recommended this month that the state approve four more, citing the potential for new jobs.

According to the American Gaming Association, the nation's nearly 450 non-Indian casinos saw their revenue from gambling drop 5.6 percent from 2008 to 2009, after a decline the year before. Casino revenue is down from $34 billion to $30.7 billion since 2007. States typically get a percentage of the revenue, though the formula varies.

Among the states seeking to expand games of chance, Illinois saw a 14.6 percent decline in its gambling revenue and New Hampshire a 9.7 percent drop from 2008 to 2009.

Clyde Barrow, a gambling expert at University of Massachusetts-Dartmouth, said states rationalize gambling "as a voluntary tax because nobody has to gamble." But he said studies show that many respond to the temptation.

"We do know the closer you put casinos to people the greater propensity to gamble," Barrow said.

 


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