Casino lobby works to sway federal panel

Laurence Arnold

Friday, May 28, 1999 | 10:59 a.m.

WASHINGTON -- Members of the national gambling study commission were breezing through proposals for their report on American gambling when one paragraph stopped them cold.

It praised the American Gaming Association, the casino industry lobby. All eyes fell upon AGA President Frank Fahrenkopf Jr., who was in the audience.

"How did he get hold of a typewriter?" quipped Commissioner William Bible.

No, Fahrenkopf and his casino clients did not write the commission's report. But their handiwork is apparent.

The report, which the commission will finish next week in San Francisco, proposes restrictions on state lotteries. It criticizes Indian casinos for being secretive. It discourages racetracks from installing slot machines.

But it mainly steers clear of the most spectacular symbols of legalized gambling: the hulking, showy, laser-lit, buffet-fed, up-all-night casino resorts of Atlantic City, Las Vegas and the Mississippi Gulf Coast, along with smaller casinos on land and rivers in seven other states.

The casino industry feared the commission would urge the federal government to take over gambling supervision from the states and impose new federal taxes on gambling. Neither idea came to pass.

The commission also rejected proposals that would have forced casinos to stop issuing credit, to send profit and loss summaries to patrons and to impose daily loss limits on bettors. For now, the most objectionable part of the report, Fahrenkopf said, is its call for an end to legalized betting on collegiate sports.

So did casinos get kid-glove treatment?

To the contrary, insists Fahrenkopf: "We were looked at harder" than the other forms of gambling. He credits the industry with "being out front" on issues like helping addictive gamblers.

But others see politics at work.

When Congress created the National Gambling Impact Study Commission in 1996, casino heavyweights lobbied congressional leaders and the White House to appoint members friendly to their industry.

The result: Of the nine commissioners, three have worked in and around Las Vegas casinos -- Bible, former chairman of the Nevada Gaming Control Board; MGM Grand Chairman J. Terrence Lanni, a member of the AGA board of directors; and John Wilhelm, national president of the Hotel Employees and Restaurant Employees Union (the Culinary Union).

All three say they approached their work with open minds. But Bernard Horn, who has followed the commission for the National Coalition Against Legalized Gambling, said he believes they "made it their priority to protect the Vegas casino industry."

James Dobson, the commission's most unyielding critic of gambling, agreed that the casino industry got results by making sure some of its friends were appointed.

At the same time, Dobson said casinos also had a strong case on the merits. He believes casino resorts, to which people travel, are less worrisome than state lotteries, Internet betting and neighborhood slot machines that bring the temptation of gambling close to where people live.

The idea that people choose to travel to casinos was a point the casino lobby hammered home at every opportunity.

Casino operators formed the AGA in 1994 after President Clinton broached the notion of a federal gaming tax. It now has about 120 member companies, including casino hotels, riverboat casinos and casino suppliers.

Under Fahrenkopf, a former chairman of the Republican National Committee, the association's strategy for dealing with the federal gambling commission had three parts: co-opt, cooperate and choreograph.

Knowing it was vulnerable on the issue of pathological gambling, the casino industry in 1996 co-opted the issue by creating the National Center for Responsible Gaming, which funds research into addiction. By the time the commission considered compulsive gambling, the industry could boast it was helping to solve the problem.

The casino association cooperated by making sure its members all completed a survey circulated by the commission to learn more about casino finances.

And the casino industry choreographed shows of strength during the commission's on-site visits to casino towns.

At a meeting in Mississippi, casinos were praised as stellar corporate citizens by the executive director of the Boys and Girls Clubs of the Gulf Coast, Biloxi's superintendent of schools and a representative of the Catholic Diocese.

Fahrenkopf said he knew the report would include cautionary tales of gambling addiction. What he sought was equal time.

"If you have the bad stories, you have to balance it with the good," he said.