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Colleges hoping for jackpot from extra gambling tax

By James Paton, Rocky Mountain News (Contact)

Published November 5, 2008 at 12:05 a.m.

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Colorado voters approved a measure aimed at expanding gambling in three former mining towns, deciding that the funding needs of community colleges outweigh concerns over higher stakes.

The initiative now gives the residents of Black Hawk, Central City and Cripple Creek the opportunity to raise betting limits to $100 from $5, add craps and roulette, and expand casino hours.

Proponents spent more than $7 million, mostly from Las Vegas-based casino companies, to tout its benefits. More than three-quarters of the added tax revenue would go to the community colleges. The rest of the money would flow to the towns and counties to cover "impact" costs such as police and roads.

Community college and casino representatives celebrated the results in a Curtis Hotel ballroom, watching election results appear on two giant TVs.

Rick Reiter, who operated behind the scenes managing the aggressive and well-funded effort to promote Amendment 50, had a smile on his face.

"As a coalition partner, the colleges stepped up," the veteran consultant said. "They really need the help. And hats off to the gaming guys. Five-dollar limits wasn't the best of situations. They've waited a while for this."

Opponents knew the odds favored the house, but they fought to highlight the negatives. Some worried that the move would give casino companies an incentive to try to expand gambling further and would lead to a rise in bankruptcies, crime and other problems.

"While this will create state revenue for one worthy recipient, state community colleges, this benefit does not come without a high price," critics Scott Yates and Jon Anderson wrote in an e-mail statement.

Supporters noted that Colorado already has gambling. This measure would allow the state to maximize the revenue it receives while limiting casinos to the three towns, they said. The change would update what they said are the most restrictive laws in the U.S.

They said they aligned themselves with the colleges because of the role the schools play in boosting the economy and because of their funding shortfall.

Nancy McCallin, head of the community college system, said Reiter approached her with the idea earlier this year. She and her colleagues already had been exploring ways to use a ballot initiative to raise money without a tax increase.

"Our funding levels have been really stretched," she said.

Black Hawk, Central City and Cripple Creek now can hold their own separate elections on specific changes. The casinos and towns believe the expansion will boost development and revenue. Central City Mayor Buddy Schmalz, whose family oversees the Dostal Alley casino, had said voters would likely support the expansion.

patonj@RockyMountainNews.com or 303-954-2544