Yes for Casinos First!

Its been well documented that the driving force behind the effort to remove the $500 loss limit by means of initiative petition is being financed by the casino industry. The group calls themselves Yes for Schools First yet they have received no financial support from any educational system in the entire state. The St Louis Business Journal explains:

Casino companies Ameristar Casinos and Pinnacle Entertainment each donated $250,000 in the second quarter to a group working to quash Missouri’s gambling loss-limits law, according to a filing Tuesday with the Missouri Ethics Commission.

The Missouri Gaming Association also gave $12,948 in in-kind donations to the Yes For Schools First Coalition, the group lobbying for a November referendum to end the state’s loss limit of $500 per two hours of gambling, according to the filing.

To date, Ameristar (Nasdaq: ASCA), which has a casino in St. Charles, has donated $1.21 million to the coalition, and Pinnacle (NYSE: PNK), which owns Lumière Place and President Casino in St. Louis, gave $1.19 million, according to the filing.

So even in the latest round of financial contribution to the coalition, Ameristar and Pinnacle provided another $500,000. The only other money being contributed is from the Missouri Gaming Association who lobbies for casinos. Lets just call this campaign what it really is; a deceptive, pro casino effort to expand gambling. Its should more appropriately be called - Yes for Casinos First!

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Story Links

STL Today - Political Fix: Casinos making big wager on push to end gambling limits

The Turner Report - Casinos pour money into loss-limit measure

When it comes to MO casinos…greed knows no bounds

It has been well documented how the casino industry has been chipping away at the original law approved by the voters in Missouri. We went from real historical riverboat casinos to buildings like Lumiere Place, that not only fail to resemble anything like a boat, they are hundreds of feat away from the river. One look at some of Missouri’s casinos, and you would have no idea that we only legalized riverboat gambling. The last remnant of the original law is the $500 loss limit. The casinos have seen double digit increases in revenue almost every year, yet they are still campaigning for its removal.

When deciding if the loss limit should be removed its important to focus on just how much money is being lost by Missouri families. The slowed economy has surely had a measurable impact on local casinos, as their profits have been down over the last half of the year. But as Bob Priddy of Missourinet explains:

Missouri’s casinos had some struggles in the fiscal year just ended although the industry did generate a little more revenue than the previous fiscal year. Nine of Missouri’s 12 casinos had less income last year than the year before.

The nine casinos did not LOSE money—their income was just down… Regardless of all the industries ups and downs in the recent fiscal year, Missouri’s casinos took in more than 1.6-billion dollars.

So even in a time when the economy is slowing, when discretionary income is shrinking because of high gas and fuel prices and when other major gambling centers like Vegas and Atlantic City are seeing huge drops in revenue, Missouri casinos managed to take away a record $1.6 billion from Missouri families and other businesses. This amazing feat is with a $500 loss limit and now the industry wants you to remove that limit and cost families, by their own figures, another half a billion dollars.

I can think of no worse public policy than one that expands a system that is in place to make you believe you can find prosperity and fortune by gambling away the few critical and important dollars that are left to your family, during a time when we are all feeling such economic pressure. Its completely irresponsible to expand gambling, increase false hope, and prey on those who feel the pinch during a weak economy and I urge you to stand against such action.

Missouri casinos really don’t believe in “limits”

A new kind of loss limit story has surfaced.  This time instead of the casino’s trying to spend millions of dollars to remove the loss limit, one seems to be encouraging players to ignore it all together.  Rick Alm of the Kansas City Start explains:

Somebody at Harrah’s North Kansas City Casino and Hotel wasn’t thinking before placing the full-page ad that appears on Page 3 of today’s Kansas City Star Preview section.  It shows three guys playing what appears to be blackjack. One of the guys is passing a chip to another guy….No big deal, right? Wrong, at least in Missouri.

Under the state’s unique loss limit rules it is unlawful to give chips or slot machine credits to another player, said Les Hahn, a gaming enforcement manager for the Missouri Gaming Commission.

The ad was no doubt in bad taste as it sends the message that it’s okay to try to circumvent the law.  Luckily for the families of Missouri, enforcement personnel from the Missouri Gaming Commission will be watching.  Rick Alm continues:

[I]f you give somebody chips you can expect a firm tap on the shoulder from an eye-in-the-sky security agent and your day could be ruined.  Hahn said Harrah’s ad is now getting a bit of official scrutiny in Jefferson City.

“It’s something we’ll certainly look at,” he said. “We may have a conversation with (Harrah’s) that it may be in poor form to represent a gambling activity that would cause a violation of the regulations.”  Harrah’s officials could not be reached.

Florida’s illegal gambling expansion appears to be stopped

The Florida Governor and House Speaker have been involved in a legal and political debate over the expansion of gambling that went all the way to the FL Supreme Court.  The Palm Beach Post explains the decision:

The Florida Supreme Court ruled unanimously that Gov. Crist exceeded his authority last November when he signed a deal that, in exchange for payments to the state of at least $100 million a year, gave the Seminole Tribe exclusive right to offer high-stakes card games such as blackjack and baccarat at seven tribal casinos. For the deal to be valid, the court said, the Legislature would have to approve it. Such approval is a long shot, since House Speaker Marco Rubio, R-West Miami, opposes expansion of gambling and filed the lawsuit that overturned the agreement - also called a compact - that the Supreme Court stuck down.

Even if the House were to approve the compact, which is clearly unlikely, another lawsuit filed by Pompano Park’s Isle Casino is pending, which would seek to invalidate the argument on federal grounds.  The Miami Herald explained:

In the suit, the casino claimed the gambling compact signed in November by the governor and the Seminole Tribe — owners of the Hard Rock chain — is invalid because it violates the federal Indian Gaming Regulatory Act, which allows tribes to play only games already authorized in Florida.

It appears that on all fronts the approval of table games in tribal casinos in Florida has been stopped and the Florida leadership that stood firm on the issue should be commended.

Kansas – Friend or Foe?

A typical page from the gambling industry’s playbook is to pay the state a great deal in taxes to allow their destructive product to be legal.  The states take the “bribe,” if you will, because they want to increase revenue in lue of curbing spending or raising taxes.  The gambling establishment takes the deal because they make so much money off the backs of the people that they can take a 30% hit and still be profitable.  Kansas, however, is pushing the tax envelope so far that even the gambling industry is saying no.  Casino Watch originally commented on how  greedy Kansas’ gambling deals were when they allowed a Frontenac, KS dog track to close down because the owner was unwilling to invest all of the money necessary to run a racino and pay a ridiculous 40% gross tax and a 60% effective tax to the state. Now Rick Alm of the Kansas City Star explains how history is repeating its self:

As Daniel Webster eloquently advised Chief Justice John Marshall in 1819: “An unlimited power to tax involves, necessarily, a power to destroy.”  The Kansas Legislature and state gambling regulators appear to be forgetting that in allowing but heavily taxing slot machines at racetracks.

As a result, don’t be surprised if The Woodlands never has slots, which could spell the end for the state’s last surviving pari-mutuel racetrack.  After months of talks, track operators and state officials still haven’t come to contract terms on a division of the spoils at a Woodlands Race Park racino, and it’s starting to look as if they may never.

Don’t get me wrong, almost any strategy that prevents the expansion of gambling is probably okay in my book, but the shear amount of exploitation and greed by the Kansas legislature is shameful.

A classic example of how the casinos can buy anything…including Harvard

The issue of expanding gambling almost always attracts a well-funded campaign of nonacademic disinformation by the gambling industry.  As explained in the Stanford Journal of Law 2003, they routinely use their influence to create studies that don’t have backed university support, that don’t properly provide the numbers behind their research necessary for proper peer review and are produced by biased pro gambling interests. Even with this knowledge and understanding it can be hard to swallow when a major and reputable player in the academic world turns a blind eye to the truth in exchange for an extortionate amount of money.  Bloomberg  News explains:

Howard Shaffer is a researcher at Harvard University, whose $34.9 billion endowment makes it the world’s richest school. His work on gambling addiction is funded instead by dimes and nickels fed into slot machines.

Shaffer and the institute he heads have received $9.1 million in industry money since 1996. The funding is part of a practice of corporate support at Harvard under fire from critics who say industry backing clouds the legitimacy of research.

The important thing to note is that the criticism isn’t just coming from those outside of academia, its coming from those most connected with how research is performed:

Close ties like this with industry can lead to a bias called “the funding effect”, said Merrill Goozner, director of the Integrity in Science Project of the Center for Science in the Public Interest, a Washington-based advocacy group, in a June 19 phone interview. “You don’t bite the hand that feeds you.”

This research is far from academic and harmless.  Shaffer’s biased studies have been used countless times to help the industry expand gambling into new markets:

Critics say Shaffer wins corporate support because his research shows that gambling addiction is rooted in brain chemistry and not casino practices, helping the industry…Since 1996, U.S. states with casinos have doubled to 20 and revenue has climbed from $17.8 billion to $37.5 billion in 2007

The bottom line is that the casinos have no problem trying to buy results, both in research and at election time.  As we enter into a new election cycle with a petition to remove the loss limit nearing the ballot, just remember the lengths casinos are willing to go to manipulate data and get what they want.

Is Canada a window into Missouri’s future?

Regardless of country or location, gambling addictions plague communities, harm families and should always be the key focal point of those with the power to help.  Canada is no different as they are dealing with thousands of addicted gamblers.  As a means of dealing with the growing problem, a self-exclusion program was developed whereby those with severe gambling addictions could volunteer to be placed on a list that excludes them from the casino.  The problem is that the casinos have no means of enforcing the self-exclusion list and they have now found themselves in serious legal trouble.  The Niagara Falls reviews explains:

A $3.5-billion class action lawsuit, which has yet to be certified, is in the works against the [Ontario Lottery & Gaming Corp.] by problem gamblers who allege they have been allowed into some of the casinos and slots facilities in the province despite the fact they are taking part in a voluntary program to keep them out.

Ontario Lottery & Gaming Corp (OLG) established the list in 1999 and have over 10,000 registered patrons who are looking for help to stay out of the casinos.  The suit alleges that these people are not being kept from gambling, which of course is causing serious problems for them, their families and the surrounding communities.  The article continues:

The OLG says security people are trained to identify those who may be on the self-exclusion letter and every effort is made to spot them, but memorizing 10,000 names and faces is an impossible task.

They’re exactly right. With no system in place beyond attempts to recognize someone’s picture, it’s simply impossible to enforce a self-exclusion list.  Here in Missouri we could be facing the same problem.  As of right now we have the perfect system for enforcing the self-exclusion list – the $500 loss limit.  As noted in our policy brief titled “Missouri’s $500 Loss Limits: How it helps addicted gamblers,” each patron must swipe a boarding pass to enter a casino.  This pass is tied to a computer which monitors who is on the self-exclusion list and effectively keeps them off the gambling floor.

Obviously Canada should look to Missouri law and develop a similar system but what does this scenario mean for Missouri?   Obviously if the loss limit is removed we will not only lose the ability to track those who so desperately reached out for help thereby experiencing all the terrible tragedy that compulsive gambling brings, but we could also see the courts clogged with litigation brought against the Missouri Gaming Commission or specific casinos.  The initiative petition which seeks to remove the loss limit will have serious consequences and this is just one more reason why it ought to be rejected.

And so it begins…

The Olympics have no doubt evolved from their once time honored Greek tradition with a focus on religion and sportsmanship to an organization that has found itself in tough political situations ranging from doping scandals to boycotts and violence.  Unfortunately, its criticism continues to mount as gambling finds itself in the fold.  Casino Watch has already reported the unfortunate story that the IOC is taking steps to prevent in-house cheating and game fixing in order to secure the integrity of the games and now it seems that we are right on schedule to let the betting begin:

With the Summer games less than a month away, online casinos and gambling outfits are slowing beginning to roll-out the betting odds for people interested in wagering on the games.  The most general and broad category of 2008 Summer Olympics betting is the medal table.  The medal table is simply a tally of who win’s the most medals; gold, bronze, and silver.

“The 2008 Olympics in Beijing is expected to have the highest TV ratings of all the previous summer games.  It’s going to be an enormous betting event, especially in places around Europe”, says Lee Rockwell, Senior Editor of Online Casino Sphere, who will be traveling to China to cover the games next month.

I hope we wont need to change the Olympic rings to the Olympic sport books.

Kansas Supreme Court provides ruling in Gambling case

The Kansas City Star reported the ruling by the Kansas Supreme Court on the issue of state owned casinos in Kansas:

The case focused on one central point: Did the new law meet the Kansas Constitution’s definition of a “state owned and operated lottery” when casino developers would run the business and own the facilities? In a unanimous ruling released Friday morning, the court said it did.

The Supreme Court rejected the argument that KS does not really own anything but the profits because they won’t purchase the equipment, market their product or absorb any expenses related to doing business. The Kansas City Star article explained:

“While the state is not the exclusive owner and operator of all aspects of the lottery enterprise under (the law), the state owns and operates the enterprise itself and owns and operates key elements of the lottery,” the ruling states.

The Court’s view of ownership seems to differ from that of every other state who’s model and system is the same as KS. Deference without distinction? Yes. A surprising ruling from a state facing serous economic shortfalls looking for to be bailed out by gambling revenues? No

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Related Stories:

- Kansas Supreme Court upholds stupid gambling law by Yael T. Abouhalkah, Kansas City Star Editorial Page columnist

- Kansas court upholds law to expand gambling by CARL MANNING, Associated Press

Why some “burdens” help protect our children

In 2006 Congress passed the Unlawful Internet Gambling Enforcement Act.  UIGEA made it illegal for online gambling companies to accept money for unlawful Internet gambling transactions and it called for regulations on the banking and payment processing industry. The U.S. Department of the Treasury and the Federal Reserve System board of governors released proposed regulations for UIGEA on October 1, 2007.  Unfortunately the Federal Reserve and Treasury have used the excuse that they can’t finalize the rules because they are unclear on what is illegal online gambling and what is legal online gambling.

The AP is reporting the latest move on Capitol Hill:

The House Financial Services Committee voted Wednesday on legislation to require federal regulators to write a uniform definition of which types of gambling should and should not be allowed on the Internet, followed by new rules implementing the ban. The tie vote, 32-32, meant the legislation failed under committee rules.

Financial institutions have been upset with UIGEA from the beginning because they feel it’s a burden to monitor gambling transactions, but one Representative spelled out why such “burdens” are so necessary:

The committee’s top Republican, Rep. Spencer Bachus of Alabama, argued that gambling is the fastest-growing addiction in the United States and having it online makes it accessible to children.  “The banks have decided that this is a financial burden,” Bachus said. “We have decided, on the other hand, that our children are worth protecting.”

How Norway got it right - The principles of the loss limit at play

The Herald Times is reporting some drastic, yet effective measures that Norway has implemented to safeguard its citizens from gambling addictions:

The government has been concerned about the increasing number of Norwegians reported to be addicted to gambling machines, and in July 2007 it banned all privately owned machines while it looked for a way of regulating them effectively.

Following the ban, the number of people who called a national gambling help line plunged, from 2,276 in 2004 to 330 so far this year.

Now that the Norwegian government has regulatory control over gambling they are perusing measures to help prevent addiction and the principles behind a unique Missouri law are paving the way. Missouri’s $500 loss limit benefits us in many ways including its ability to help protect those with compulsive gambling problems by slowing down the process and breaking up the controlling rhythms experienced by compulsive and problem gamblers. The Herald Times explains just how Norway adopted these principles:

“There will be limits on how much an individual can lose, they will be closed at night and there will be a cooling-off period after one hour of continuous play,” the minister, Trond Giske, said.

The machines will not take cash or credit cards, and can only be used with a prepaid card sold by Norsk Tipping to registered players over the age of 18.

The system will limit the amount that can be bet per game to 50 kroner (US$10), and set a loss limit of 400 kroner (US$80) per day and 2,200 kroner (US$440) per month per player, even if they have more than one card.

Aggressive measures like this in place that truly safeguard those who gamble begs the question; Why are we dealing with measures that seek to remove the loss limit instead of looking to ways to better protect our families?

Today’s Missouri Gaming Commission Meeting Report

The Missouri Gaming Commission (MGC) held its monthly meeting today in Jefferson City.  There were several disciplinary actions taken including a $5,000 fine against Ameristar Casino Kansas City for failing to report a criminal theft from a patron and a $10,000 fine against Argosy Casino in Riverside for using old software in slot machines that had been revoked.

The MGC also negotiated down a prior fine, which they do each meeting by an average amount of 10 percent, this time against Harrah’s North Kansas City in which the casino used a deck of cards in a poker tournament that did not contain all the playing cards.

Before moving into a closed meeting, the commission approved a motion to transfer the control of the Horse Racing Rules from the Missouri Horse Racing Commission to the Missouri Gaming Commission; which was originally a motion made during the prior Missouri Horse Racing Commission meeting.

Senate GOP Leaders looking to “cash in” at the casino

It looks like the usual suspects are at it again.  The St Louis Post Dispatch’s “Political Fix” reports:

Senate Republicans will raise campaign funds tonight at what they’re billing as “a tropical cocktail hour underneath the cabanas on the pool deck of Ameristar Casino” in St. Charles. The description comes from an invitation signed by Senate Majority Leader Charlies Shields, R-St. Joseph, and Sen. Scott Rupp, R-Wentzville. The event, from 6 p.m. to 8 p.m., will raise money for the Majority Fund Inc., the committee that works to keep the Senate in Republican hands.

Contribution limits don’t apply since the money goes to a continuing committee instead of a candidate committee. Sponsors are urged to donate $2,500; hosts, $1,000; and guests, $500. The letter goes on to invite donors to stay the night at Ameristar Hotel and Spa, where a block of rooms is reserved just for them.

It’s of course no surprise that Senate Majority Leader Shields and Sen. Scott Rupp are hosting an event at the casino.  Those two Senators have received countless dollars and donations from the casino industry to promote their anti-family, pro-gambling agenda. As you may remember they have each been the sponsors of legislation to expand gambling and remove the $500 loss limit.  This type of behavior is to be expected from those in the pockets of the casino industry, its just sad that it comes from those who are in leadership in the State Senate.

The ugly side of the “fastest growing mental health problem in the western world.”

Another unfortunate story about a parent choosing gambling over their child has surfaced.  However, this example proves just how dangerous gambling addictions can be for children and just how tough they are to overcome.  The Sowetan out of Africa explains:

The errant Ekurhuleni woman who not so long ago hit the headlines after dumping her then seven-month-old baby with her helper and went gambling, has done it again.

This time Nomvuyo Williams, 35, a self-confessed gambling addict, has abandoned the baby with her friend Zoleka Nyengane.

Williams was last seen in April. Her disappearance happened barely three months after Sowetan exposed her for neglecting her baby.

This placed her friend in dire straits as she was left without any money or means to take care of the child.  The article continues:

“We have been good friends for a long time and I cannot believe she is doing this to me. She did not even leave a cent for the baby,” said Nyengane.

“I love this baby and I love Nomvuyo too, but I cannot look after her and my three children because I am unemployed and my husband is very sick.

“The baby is still young and needs napkins, milk and other baby food, and I cannot afford all that. She was very sick a few weeks ago when she was teething and needed her mother,” Nyengane said.

The New England Journal of Medicine states that “pathological gambling is the fastest growing mental heath problem in the western world.” It would seem that those who claim people should simply take responsibility for their actions and regulations on gambling are unnecessary, clearly don’t understand the power of addiction.

A Cautious Victory…Loss Limit Beware!

On Monday the Missouri Gaming Commission (MGC) passed what looks like a well- intentioned moratorium on new casinos in Missouri. Virginia Young of the St Louis Post-Dispatch explained the move:

The freeze halts, for now, a pending application to add a casino in the Kansas City suburb of Sugar Creek. It also douses hopes of casino supporters in Cape Girardeau, Mo., and discourages talk of a casino at the Chain of Rocks Bridge in St. Louis. Regulators said a freeze was needed because it appears likely that a measure capping the number of casinos will be on the general election ballot Nov. 4.

While it’s a positive move to see the MGC halt the unnecessary expansion of gambling, it’s important to understand the implications of such a situation. As explained in a prior report, the ballot measure in question does seek to cap the number of casinos, which would certainly be a benefit to those in Missouri, but it also seeks to remove the $500 loss limit. The casino industry and regulators alike have long tried to trade the number of casinos in the state for the removal of the loss limit. Because the November vote has a cap on casinos, the MGC will leverage the results to their advantage. For instance if the initiative passes then the loss limit has been removed and there would be a cap (a cap that could easily be lifted by the MGC with a few simple changes to the definition of licenses – which is being done now). If, however, the initiative fails, the MGC will say it proves citizens don’t want to restrict the number of casinos because they voted against the cap.

Motivation behind this strategy can be gained by looking at recent comments made by Gene McNary, the Executive Director of the MGC. Rick Alm of the Kansas City Star reported:

Gaming Commission director Gene McNary, who has pushed Wild Rose project, endorsed the moratorium. “It’s contrary to what we would like to see go forward,” he said of the ban. “But the fact is we’re regulators and we’re not operating in a vaccum.”

Casinos are coming in Kansas, and “the casino industry is going through a downturn,” he said. The moratorium language said the “Gaming Commission desires to be responsive to the wishes of the citizens…and will be guided by their vote in November.”

The Executive Director clearly indicated a moratorium is not what is wanted, but given they don’t operate in a vacuum, (i.e. outside of external political influence), they need to be guided by this vote. Past comments and actions by Mr. McNary also clearly indicate that a free market approach is what the MGC believes in regardless of expert testimony and analysis which demonstrates that the operative model in Missouri is not a free market.

Even though the MGC and the current casino industry wants you to believe that the initiative petition is the best option, there are better alternatives. We need to vote against the initiative petition to save the loss limit and then send a message to the MGC that gambling expansion through more casinos is not in the best interest of both the industry and most importantly the people and families of Missouri.

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For more information on the state of gambling in Missouri and the effect of the loss limit, please read our Casino Watch Policy Briefs:

• Missouri’s Competitive Outlook: Is the loss limit hurting casinos?

• Missouri’s $500 Loss Limit: How it helps compulsive gamblers

• Loss limits and law enforcement: How Missouri is Uniquely Protected