Monthly Archives: July 2008

Can Kansas save The Woodlands?

Casino Watch has reported that The Woodlands, one of Kansas oldest live horse and dog racing tracks, announced they were going out of business on Aug 24th due to market forces and an unworkable deal with the state to include slot machines at the track.  Now Forbes is reporting that Kansas is attempting to keep The Woodlands open:

The state of Kansas is continuing talks with the Woodlands in the hopes of reaching a deal that would put slot machines at the horse and dog tracks in Kansas City, Kan., and keep that business open, Kansas Lottery Executive Director Ed Vane Petten said Tuesday… The Woodlands said it has faced declining revenues for years and has been operating at a financial loss for some time.

“Right now, with the numbers the way they are, the market the way it is, it just won’t work for them, but we do continue to have a dialogue with them,” Van Petten told reporters.

As it stands, Kansas would take in 60% of the slots revenue, 40% to the state and 20% to the local government and various operations, and the track would take in 25% with the remaining 15% to be negotiated.  However, Forbes explains why even a deal to give the entire 15% to the track may not be enough:

Van Petten said the state will allow the Woodlands to have the entire 15 percent, but the Woodlands says it still won’t have enough revenue to cover its costs and give it a reasonable profit. Van Petten said the Lottery is looking at other options to help the Woodlands, including reworking the costs of oversight and regulation, which the Woodlands must pay.

“I don’t think we can go in and ask them to invest the millions of dollars it will take to get an electronic gaming facility up and running and continue to lose money,” Van Petten said. “So we continue to work with them to look at any possible way to get a better deal for the state of Kansas and keep these race tracks viable.”

Another possibility is asking the Legislature to rewrite the law to give the Woodlands a bigger percentage. However, some are concerned about a possible push to repeal the gambling law if the subject were reopened.

With a slumping economy, competition from surrounding casino’s, a market that doesn’t seem willing to support tracks and the fear of repealing current gambling laws should there be an attempt to legislate a solution with The Woodlands, it seems like a dim possibility of saving the track.

Ex-NBA referee sentenced in gambling scandal

Former NBA referee Tim Donaghy pled guilty to federal felony conspiracy charges alleging that he passed along inside information on NBA games.

Donaghy also alleges that referees helped alter the outcomes of games during the ’02 and ’05 postseasons.

According to the Associated Press and

Disgraced ex-NBA official Tim Donaghy admitted that he’d brought shame on his profession Tuesday as a federal judge sentenced him to 15 months behind bars for his participation in a gambling scandal that still has the league on the defensive.

U.S. District Judge Carol Amon sentenced Donaghy to prison time, plus three years of supervised release, saying he’d let the sport down by taking thousands of dollars from a professional gambler in exchange for inside tips on games — including ones he refereed.

Mr. Donaghy’s attorney argued that an addiction to gambling motivated the former referee:

Defense attorney John Lauro asked Amon to give his 41-year-old client probation, saying the ex-official was a gambling addict who destroyed “the career he loved” and needed treatment, not incarceration.

What moves the NBA will take to prevent a problem of this magnitude again remains to be seen, but the Commissioner David Stern has been clear that current referees are under a watchful eye and that this incident was simply a “lone” referee. explains:

Case closed for him. For the NBA, the damage lingers.

Commissioner David Stern has made several moves to quell doubts about the integrity of the NBA’s officiating, with more developments to come


Tim Donaghy Timeline

June ’07: FBI contacts NBA to discuss alleged betting probe
July ’07: Resigns from NBA, investigated as part of organized-crime probe in New York
Aug. ’07: Pleads guilty to two felony charges alleging he took cash payoffs from gamblers and bet on games himself
June ’08: Claims highly controversial Game 6 of the Lakers-Kings 2002 playoff series was affected by actions of 2 of 3 referees who worked the game
July 29, 2008: Sentenced to 15-month prison term (had faced up to 33 months) and three-year term of supervised release
For More Information

Casino Watch Focus – NBA Finals should be about the game and not a wager

AP Video:

House Committee Reviews Study to Legalize Online Gambling


Rep. Shelley Berkley, D-Nev., will ask the House Judiciary Committee Wednesday to conduct a study on how much revenue the U.S. could generate if online gambling were legalized nationwide.

The study is ultimately designed to challenge Congress’ 2006 enactment of the Unlawful Internet Gambling Enforcement Act, which prohibits the transfer of funds from a financial institution to Internet gambling companies.

Chad Hills, gambling analyst at Focus on the Family Action, said this is a promotion of online gambling disguised as research.

“Should any government – elected by the people, for the people to serve, protect and maintain order – be associated with an industry that exists through the exploitation of human weakness for the sole purpose of monetary gain?” he asked. “Gambling and its negative impacts more serve to decay and threaten our social fabric than to build and strengthen the very threads of society, which consist largely of marriage and the family.”

Learn more about Internet gambling legislation.

Another Kansas gambling track to close

With the induction of casino gambling, horse and dog tracks around the country have struggled to stay open.  Kansas has attempted to allow tracks to offer slots to help maintain the industry.   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 it looks like the Woodlands will follow suit:

In a statement Tuesday afternoon, Woodlands President Howard T. Grace said that live greyhound racing, Thoroughbred and quarter-horse racing at the track will come to an end Aug. 24.

“The pari-mutuel industry has faced declining revenues for years, and The Woodlands has been no exception, operating at a financial loss for quite some time,” Grace said.

It was believed that once slots at tracks were legalized, the tracks of the state would profit and stay in business.  Instead, Kansas’ greed and addiction to gambling revenue has pushed one of the states most recognized tracks out of business.

BIA ruling attempts to limit Tribal Gaming

Tribal Gaming’s complexities range from which games can be offered to what who is involved in their regulation. In the last year, there have been numerous documented cases of tribes attempting to build casinos hundreds of miles away from their people. The 1988 Indian Gaming Regulatory Act allows for these off-reservation casinos, but in January the U.S. Dept of Interior denied a claim to build a casino 293 miles away from the reservation explaining the casino was too far to be of benefit to tribal members. Since that time, the Dept. of Interior has denied similar attempts over 10 times, which begs the question: Just how far off the reservation is permitted by law and how far is too far? Now it appears the Bureau of Indian Affairs (BIA) has an answer:

The U.S. Bureau of Indian Affairs has published a rule that says casinos should be located within 25 miles of a reservation headquarters.

But the rule has exceptions. Tribes may seek reservation status and permission to operate casinos on newly acquired land away from a reservation if tribes can show that a significant number of tribal members live nearby, can demonstrate a current connection to the property or if other tribal government facilities have been located on the land for at least two years before an application is filed for new reservation land.

With out question there will still be plenty of legal challenges, as tribes will attempt to meet the rule’s qualifications for off- reservation casinos. However, this ruling is encouraging as it helps to weave together a patchwork of rules and regulations that go back over 15 years. In a time when casino companies will approach any tribe to seek to expand their gambling business, and attempt to locate it anyplace they feel provides market support, its nice to see the BIA viewing the issue in more reasonable terms.

A Loss Limit lesson – How the Missouri lottery demonstrates there are no winners, only losers

Casino Watch has explained what happens when you tie money for education to gambling: sometimes you see extra revenue go to schools but most of the time an elaborate shell game is played where the money never really reaches the intended target.  The Missouri Lottery was established with promises of money going to schools but where is the money going?  State Rep Belinda Harris of Hillsboro has been asking the same question:

With educational costs rising and the budget seemingly shrinking, people want to know if schools are really benefiting from gambling in Missouri, said state Rep. Belinda Harris, D-Hillsboro.

Harris believes that when people voted for gambling in Missouri, they were expecting to see larger amounts of cash flowing into their local schools, as is the case in Nevada and Mississippi, where gaming is much more prevalent.  “I think they feel misled,” she said. “They felt like it would solve the problem of funding education.”

Harris said in effect, education may have lost a little of its state funding when the gaming funds came into play.

Two things happen when money is allocated to education through gambling; general fund money seems to be displaced by the gambling money resulting in no net gain for education, and if less money is gambled away by the state there can be a net loss to education funding.  It is terribly tragic for a government to mandate losers and they will either make losers of the people by subjecting them to the horrors of gambling, or make losers of our children by denying them the money necessary to safeguard their educations.

We should never hold a child’s education hostage to gambling dollars and the initiative petition which seeks to remove the loss limit does just that.  A Yes vote is not a vote for schools, it’s a vote against our schools and it’s a vote against our families.

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!


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.

MO Atty. General candidate scrutinized for funneling of campaign contributions

The Associated Press along with several other news outlets and news blogs are reporting that Sen. Chris Koster has violated campaign finance laws in the state of Missouri by funneling campaign contribtions through outside groups and committees. We have previously reported on the fundraising tactics of Sen. Chris Koster, candidate for MO Attorney General (AG), and his use of money from gambling special interests to fuel his “law and order” campaign for AG:

While at first glance this may seem like an insider-only story, the Turner Report explains that Sen. Koster has turned to gambling special interests dollars to fuel his quest to be the state’s next Attorney General. According to the Turner Report:

Among the other contributors who circumvented contribution limits by giving first to the Economic Growth Committee, which then laundered their cash through the legislative committees were:

Ameristar Casinos, St. Charles and Kansas City, $17,450

The Associated Press account of Sen. Koster’s money-laudering operation is both eye-opening and shocking:

They met at an Italian restaurant in southwest Missouri. A campaign aide for Democratic attorney general candidate Chris Koster and the treasurer for a local Democratic committee. The purpose: a check exchange.

Koster’s aide handed the Democratic official a check from an innocuous-sounding group called the Economic Growth Council, along with a pair of letters she had created _ one from the Economic Growth Council accompanying its money, the other from Koster’s campaign soliciting money from the local political committee.

The letters were formalities. The Democratic official provided Koster’s aide a pair of checks similar in size to the amount she had received.

Just like that, Koster’s campaign channeled nearly $27,000 to itself _ part of the roughly $450,000 from big-time donors that got routed around campaign contribution limits to Koster in a three-month period.

E-mail communications obtained by The Associated Press show Koster’s campaign staff helped direct donors wishing to give more than the state limit to the Economic Growth Council, then coordinated the transfer of that money to local political party committees and onto Koster’s campaign _ a potential violation of an 8-year-old ruling against such orchestration.

Our last poltical contributions report shows that Sen. Koster has become accustomed to recieving donations from a variety of special interest groups, especially gambling special interests. As we compile the latest campaign contribution information from the casino industry, we will provide updates on this story.

Story Links:

– Political Fix: UPDATED: Mo GOP, Hatfield jumps into the fray over Koster’s fundraising

– The Turner Report: AP confirms Koster money-laundering operation outlined three months ago in Turner Report

– Missouri Political News: Koster’s ‘close consultation’ with Ethics Commission questioned

– Missouri Political News Service: Koster Campaign Busted Laundering Money

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.