A lot on the table for No. 50

Higher casino stakes pit funding needs against gambling fears

By James Paton, Rocky Mountain News (Contact)

Published September 27, 2008 at 12:05 a.m.

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Matt Mcclain / The Rocky

Casino employee David Brown hoses down a sidewalk Thursday in downtown Central City. The town has seen a string of casinos come and go over the years.

Matt Mcclain / The Rocky

Sharon Morrill and Charlie Trojan, right, play Texas hold'em at Golden Gates Casino on Thursday in Black Hawk. Amendment 50 would raise the maximum bet to $100 in Colorado on table games, as well as add craps and roulette.

Casinos and community colleges have become allies in pushing a proposal that would pave the way for a few former mining towns to expand gambling significantly.

Amendment 50 would allow Black Hawk, Central City and Cripple Creek voters to decide whether to increase the limit for a single bet to $100 from $5, add craps and roulette and keep casinos open around the clock.

Proponents have billed the initiative as a way to boost funding without raising taxes. The November ballot measure could generate $300 million in additional tax revenue over the first five years.

More than three-quarters of those extra proceeds would go to Colorado's community colleges. The rest would be sent to the three cities and Gilpin and Teller counties to cover costs such as police and road improvements.

But it is not so simple.

Critics have worried that the move could fuel a rise in bankruptcies, foreclosures, divorce and other serious problems and prompt casino interests to pursue further development of gambling. They do not deny that community colleges need the cash, but they argue that the state should figure out another way to aid them.

Opponent Scott Yates said the proposal "is bought and paid for by big gambling" and called the community college funding a "PR ploy" to try to get it passed.

A group backed by casino companies has raised nearly $7 million to promote the measure, with Ameristar and Isle of Capri chipping in more than half of the sum.

Their motivation is obvious.

Fewer restrictions translate into higher profits.

This comes at a time when gambling businesses are slumping. After many years of essentially uninterrupted gains, Colorado casino revenue has slipped in 2008. The weak economy is a significant factor. Lofty gas prices and a recent smoking ban play a role as well.

Jim Wenneker, 35, said he has friends who often hop on an Allegiant Air flight to Las Vegas from his hometown, Fort Collins. With $100 wagers closer to home, some of those gamblers may stick around, he said.

"When you only win $5 and lose $5, people will say, 'Um, it's no fun,' " the Applebee's manager said as he smoked outside the Ameristar casino in Black Hawk.

The casinos are betting more business is on the way. Ameristar, based in Las Vegas, is spending close to $240 million to build a 33-floor luxury hotel in Black Hawk. The company boasts it would be the tallest structure between Denver and Salt Lake City.

The critics emerge

Broadening gambling is an idea that has been raised more than once since 1991, when Colorado approved "limited stakes." But this time, the backers are trying to accomplish all of their goals at once, according to another vocal opponent, Jon Anderson.

Anderson, a lawyer at Holland & Hart who previously worked as chief counsel to Gov. Bill Owens, said he is not morally opposed to gambling and possibly would support a more gradual expansion. But he believes that the current amendment is excessive.

"They are now putting the whole kit and caboodle in one initiative," said Anderson, who is not getting paid to fight or work on behalf of any clients. "No doubt they saw all those other initiatives and thought they could sneak one by the people."

Critics recall the rationale for introducing small stakes in the first place: to stimulate local economies and preserve heritage.

The state has kept single bets at $5 and limited gambling to slot machines, blackjack and poker, collecting taxes from casinos along the way. Half of the tax revenue has gone to the state's general fund, with 28 percent flowing to the historical society, 12 percent to Gilpin and Teller counties and 10 percent to Central City, Black Hawk and Cripple Creek.

Some will wonder: What's next? Indian reservations would likely step it up. Then casinos may seek to make gambling more widespread in Colorado.

"I think it is a slippery slope," Anderson said.

Anderson has been joined by Yates, who launched a Web site, KeepVegasOut.com, to battle the amendment. They fear gambling could broaden beyond the three cities and Indian reservations, possibly after another ballot initiative or an act of Congress.

Supporters, however, stressed that Amendment 50 gives the cities the ability to update laws that are the most restrictive in the country and confines gambling to where it is already legal while maximizing the revenue.

Still, others believe higher wagers, additional games and 24-7 business would trigger an increase in bankruptcies, domestic abuse, suicide and crime.

Casino profits have come at least partially at the expense of gamblers like Fran Fry, a 59- year-old furniture saleswoman and Parker resident who said she has struggled with a gambling problem and recently lost $15,000 over three days in Black Hawk.

On the wall just inside the Lodge Casino are photos of gamblers smiling broadly and holding stacks of $100 bills. The reality for a lot people is that bigger bets will mean bigger losses.

"If the state does this, you are going to find 10 times the bankruptcies, people losing their homes and killing themselves," said Fry, who has been working with Arnie Wexler, a national consultant focused on helping compulsive gamblers.

Katy Atkinson, spokeswoman for the group backing the measure, acknowledged the problem is serious, but argued the measure would not make it worse.

"It's like going to Sunday liquor sales. We didn't see a sudden increase in alcoholics," she said. "Unfortunately there are lots of ways people can indulge their addictions. All they need is a computer and an Internet connection."

Amendment 50 also raises questions about how Black Hawk, Central City, Cripple Creek and the two counties would spend the additional tax money they receive, an amount estimated at more than $60 million over the first five years. The sum each government gets is based on the proportion of the revenue it generates.

In the past, Black Hawk, with most of the activity, has captured the lion's share of the tax revenue sent to the cities. Black Hawk has received $35 million of the $490 million in tax revenue since 2004.

The money is supposed to address the "impacts" of gambling. That covers emergency services, road improvements, traffic and other costs. If the amendment succeeds, legislation could clarify exactly how those funds can be spent, according to supporters.

Voters may wonder whether the dollars would be spent responsibly. Black Hawk recently passed an ordinance to spell out how funds should be allocated after reports questioned the spending of historic preservation funds.

Atkinson has said "local officials are accountable to the voters and I would assume that if the fundamental needs of the community are not being met, if they are building statues to themselves and not fixing potholes, that's going to catch up with them."

Another concern to some officials is a tax issue.

The state gaming commission has been able to set the tax rate on casino income as high as 40 percent, but that could change. If the ballot measure is passed, a rate above 20 percent - currently the highest level - must be approved by a statewide vote.

Up to the voters

In Central City, casino operators favor Amendment 50, though some, like Easy Street and Famous Bonanza manager Ann Dodson, are concerned the economic benefits will not be spread around equally. She thinks Black Hawk and its larger casinos will have an advantage.

"There's a danger we will not be able to compete in that new arena," said Dodson, whose family has done business in Central City since the late 1950s.

Still, Dodson said she stands behind the initiative. "Anything that helps keep the town lively is good for historic preservation" and the economy, she said.

Lonnie Gwinn, a 55-year-old electronics repairman, hit the slot machines at the Century Casino one afternoon last week. The Federal Heights resident sees Amendment 50 as a key economic booster for Central City and believes a local vote is reasonable.

"It ought to be up to these people," he said.

It will be up to those residents if Anderson, Yates and others who come forward fail to persuade voters to reject the proposal.

After the statewide vote in November, people living in the three towns would decide for themselves in separate elections whether they want more gambling.

Central City Mayor Buddy Schmalz, whose family oversees the Dostal Alley casino, said residents would probably approve the changes. Perhaps 30 casinos in Central City have come and gone, and only six remain today, he said. The move could spur development in the area and lift revenue in his town, population 450.

"The impacts for us are minimal," he said, "and the plus is so high I don't see it being close."

Amendment 50

What is it? * A proposal to allow residents of Central City, Black Hawk and Cripple Creek to vote to raise the bet limit to $100 from $5, add roulette and craps and keep casinos open as much as 24 hours a day. The measure would give more than three-quarters of the additional gambling tax revenue to Colorado community colleges.

What are the benefits? * Would give community colleges - seen as a key to the state's economy - a significant funding boost without raising taxes. Of the extra tax revenue, 78 percent would go to the colleges for financial aid and classroom instruction, with 22 percent going to the local governments affected by gambling.

* Would give voters in Black Hawk, Central City and Cripple Creek the ability to decide for themselves what is best.

* Could provide an economic boost, attracting new customers and making Colorado more competitive. With $5 limits, the state is said to have the most restrictive gambling in the nation.

What are the potential worries? * Could fuel an increase in the number of compulsive gamblers and bankruptcies, foreclosures, domestic abuse, suicide, crime and other serious problems.

* Doesn't give the state the flexibility to use the extra tax money on anything else. Perhaps the money could be better spent on a program that has a bigger need if budget priorities change.

* Could turn the former mining towns into round-the-clock, Vegas-style destinations and give casino companies and other investors an incentive to try to further develop gambling in Colorado.

• September 27, 2008

  6:31 a.m.

  Suggest removal

  scodtt writes:

  This is one of those amendments that hasn't gotten much press, but is a really big deal. Kudos to the Rocky for covering it.

  This story makes it clear: Anyone voting yes is doing the business of Big Gambling for them. The reason for Amendment 50 is to make Casinos more money. Much is made about where the crumbs of the new money would go, but it's worth saying out loud that 80 percent of the new money generated goes directly into the pockets of the Casinos.

  http://KeepVegasOut.com

• September 27, 2008

  8:12 a.m.

  Suggest removal

  n_jared writes:

  What about the bankruptcies, foreclosures, domestic abuse, suicide, crime and other serious problems? Where do they come from? Halo 3??? 5$ limit is dumb, its old and outdated like blue laws. These laws have got to go.

• September 27, 2008

  9:29 a.m.

  Suggest removal

  wbb writes:

  The benefit Colorado has seen from gambling tax revenues is the effect that the State Historical Fund has had on communities throughout the state.
  This is something that sustains jobs and heritage tourism, and is the real victim of amendment 50. Read the language and you'll see that the casinos benefit first and the guys who run those towns benefit next, not the preservation of the character of this fine state that most of us have chosen to live in.
  This isn't about Community Colleges. This is about greed. Colorado is too good for this.

• September 27, 2008

  8:31 p.m.

  Suggest removal

  franfry25years writes:

  I cannot believe what this state has done with the gambling casinos. If they would have opened up treatment centers like they do with alcoholics and drug addicts, with all the revenues they bring in I could understand them wanting to open up 24/7 ..They prey on the compulsive gamblers. People that are not addicted spend 25 to 50 dollars a day. They get monies from people that spend 5000 a day, and dont want to help. Compulsive gambling is a horrible disease. It causes bankrupticies, death ,and prison. Many people lose their homes and marriages. Speak to a few attorney's and they will tell you bankruptcies have doubled and tripled because of the casinos. Stop amendment 50

• September 28, 2008

  4:12 a.m.

  Suggest removal

  roger44 writes:

  what's the difference whether they lose their money in Vegas or Colorado? You gamble if you invest in the stock market, when you walk into a church, betting there is a God, and every time you get in your vehicle with the crazies on the road. The only thing I would add to the amendment is that Casinos maintain a well equipped Surveillance dept with 2 people on duty at all times, all violations to be reported to Casino managers and state gaming officials. I have seen many violations hidden from state gaming regulators in Nevada, Casino Managers block the reports. I would also regulate their ads, all they show makes you think you can go up there and come home a big winner. They don't tell about all the losers. And those who complain about the casinos making money, well, that's what any business does if operated right.

• October 3, 2008

  11:09 a.m.

  Suggest removal

  Buff4Life writes:

  Government should quit treating us like children by trying to tell us what we can and can not do. As long as you're not hurting someone else, it should be legal.

  Yes, this would mean that parents actually have to raise their children themselves and be dilligent in doing so.

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