Casino leaders laud panel meeting

Monday, Jan. 26, 1998 | 10:07 a.m.

ATLANTIC CITY -- Casino leaders were beaming Friday after the National Gambling Impact Study Commission ended a two-day hearing here.

But there are signs the euphoria here could disappear by the time the nine-member panel comes to Las Vegas in November.

With the help of organized labor and public officials, the casino industry here told a story of how legalized gambling has revitalized a once-decaying city.

"The two-day meeting was a powerful testament to the city's determination to stand up for an industry that has provided opportunities and a better quality of life for tens of thousands of individuals," said Frank Fahrenkopf, president of the Washington-based American Gaming Association.

So well had local officials conveyed their economic success story that as the hearing came to a close, one of the anti-gaming members of the commission, conservative radio talk show host James Dobson, complained that not enough negative issues arose during the panel's first road trip.

Some now are suggesting the industry may have done too good of a job here -- one that could come back to haunt it during the November Las Vegas hearing.

The depth of the industry's role in uplifting the economic well-being of this city made an impression on one panel member, Nevada Gaming Control Board Chairman Bill Bible.

"I was particularly impressed with the financial assistance that the industry has provided Atlantic City to help it with its schools, its roads, its parks and its public housing projects," Bible said.

Since gaming was legalized here 20 years ago, gaming has contributed $7 billion in federal, state and local taxes, according to Bradford Smith, chairman of the New Jersey Casino Control Commission.

The largest share of the industry's economic commitment comes through an 8 percent tax on gross gaming revenues.

The industry also contributes an additional 1.25 percent of their gross revenues to the Casino Reinvestment Development Authority, which has pumped $717 million into the local community. A $268 million new convention center and an $83 million new high school are among the projects funded by the CRDA.

By contrast in Nevada, gaming pays a 6.25 percent tax on gross revenues.

Bible said the industry in Nevada also is allowed deductions it can't get here.

Last year, at the Nevada Legislature, for example, gaming actually got a $2.5 million tax break for promotional activities, Bible said.

Bible predicts the difference in tax structures between Nevada and New Jersey will be examined by the federal commission before it completes its work in June 1999.

The scrutiny is likely to make casino executives nervous.

It also could fuel more debate in Nevada over gaming's apparent reluctance to contribute more for growth.

The industry is pushing a proposal to pass the cost of $2 billion in water and sewage improvements onto residents and tourists in the form of a quarter-cent sales tax hike.

The sales tax debate has turned growth into the most important issue in the 1998 election year.

Last year, rather than implement the hike, the Clark County Commission decided to give voters an opportunity to voice their opinion on the subject on the November ballot.

The positive story conveyed here last week, meanwhile, will leave a lasting impression on the federal gaming commission, as it heads to Boston March 16-17 for its second hearing on the road.

"We allowed the officials in Atlantic City to tell their story in their own words," said Chairwoman Kay Cole James, who is opposed to legalized gambling. "They made their case well."

Well enough, according to some, to put the industry back on the defensive in Las Vegas.