Michigan lottery head struggles with impact of Indian gaming on state program

Sunday, May 7, 2000 | 2:18 a.m.

Now, as the state's lottery commissioner, Gilmer says he has no second thoughts about that decision, even as casinos threaten the lottery's revenue.

A longtime Augusta resident who still maintains his home in the area, Gilmer served in the state House for 22 years before he was forced out in 1998 by term limits.

That year, he challenged state Sen. Dale Shugars in the Republican primary and lost. Gilmer's consolation prize was being appointment by Gov. John Engler to the head lottery post.

Gilmer says not approving the deal that led to Indian casinos could have backfired, leading to judicial or legislative appeals that may have resulted in even more casinos. And some of the casinos might also have been exempt from paying state taxes.

As it is, new casinos created under the resolution will have to pay 8 percent of their revenue to the state and 2 percent to local governments.

"In 10 years, I'll know whether I made the right decision" in supporting the legislation, Gilmer told the Kalamazoo Gazette for an article published Sunday.

But, he said, "I think it's absolutely crucial that we get our arms around this beast and control it and keep it under control, and I think that's what we have done."

Gilmer is watching money that might have found its way to the state lottery wind up in casinos, especially the two that opened last year in Detroit.

Another is planned for Emmett Township southeast of Battle Creek, part of Gilmer's old district.

Lottery revenue is down about 8.5 percent so far in 2000, Gilmer said.

"Right now, we're being challenged mightily," Gilmer said. "But it is clearly competitive, no question about it. We accept that. We're in a very competitive business."

For fiscal year 1999, the state lottery sold $1.73 billion in tickets, an eighth consecutive year increase, according to lottery statistics. And all of the lottery's net profit - $621.1 million - went to fund public education.

That much money, though, was enough to run the state's public schools for about two weeks, Gilmer said.