Gambling feud simmers in Colorado mountains

Robert Weller

Monday, April 30, 2001 | 10:53 a.m.

BLACK HAWK, Colo. -- For a century, money went through Black Hawk on its way uphill to Central City and sewage flowed the other way.

Then legalized gambling defied gravity. Today elegant Central City, with its famous opera house, is almost broke and tiny, blue-collar Black Hawk boasts a budget of some $22 million.

Instead of working side by side to promote their casinos, the two towns, whose mayors are cousins, are engaged in a bitter war over how to tap into a potentially bigger share of the region's gambling market.

The latest chapter in the divisive history between the towns in the foothills above Denver involves access. At issue is whether to build an 8.7-mile, four-lane road or a two-lane, 7,000-foot highway tunnel to reach heavily traveled Interstate 70.

The road would feed gamblers directly into Central City. The tunnel would reduce the time drivers spend on a 19-mile, serpentine mountain road that leads first to Black Hawk, one mile closer to Denver, and then to Central City. The only direct road to Central City now is a four-wheel-drive trail called "Oh My God Road."

"Some in Black Hawk want to bury us. They want to turn their town into a Las Vegas strip," said Central City Mayor Don Mattivi.

Black Hawk officials contend Central City dealt itself out of the gambling market with a construction moratorium that prohibited large casinos.

About 40 miles west of Denver, Central City was dubbed "the Richest Square Mile On Earth" when gold was discovered there in 1859. Black Hawk, with plenty of water and a little level land, became "the City of Mills" to process the ore.

Black Hawk's share of the gold rush was smoky streets and sewage flowing beneath its wooden-plank sidewalks as late as the 1960s. Homes often had cardboard between walls instead of insulation.

Central City, where mining magnates built substantial houses and the highly regarded opera house in the 1860s, developed and campaigned successfully for limited-stakes gambling to help preserve their mining town image during the late 1980s.

To gain statewide support, it included Black Hawk and Cripple Creek, another old mining town about 75 miles away, in the initiatives voters approved in 1990.

"Some of our businessmen talked brashly about turning Black Hawk into a parking lot for Central City," recalled Mattivi.

Everyone expected gambling to be a quaint attraction drawing a few more tourists to mom-and-pop casinos mostly in Central City.

Instead it was like a new gold rush.

Since gambling debuted in late 1991, nearly $4 billion has been wagered in the three towns.

"For a while it seemed like you could put a slot machine in a bathroom and make money," said Roger Baker, a spokesman for Black Hawk.

Central City fell on more difficult times partly because leaders imposed a moratorium on business permits in 1992, fearing they didn't have enough water to spare for big casinos. That effectively shut down casino development.

The town's casinos have shrunk from a high of 17 in 1990 to six, which take in about $5 million each month. Eighty percent of its gambling revenue last year came from one casino on the edge of town closest to Black Hawk. Its population hovers at about 600 residents.

Downhill, Black Hawk has 19 casinos that generate roughly $35 million each month. The population has dwindled to 118, but its annual budget has boomed from $160,000 to $22 million.

After it became clear Black Hawk was getting most of the gambling dollars, Central City began campaigning to build the $45 million road. Black Hawk countered with a plan for a $150 million tunnel.

Allegations of shenanigans flew.

Earlier this year, a grand jury concluded that Black Hawk officials had secretly used public funds to sabotage plans for the road, including buying mining claims to block development. No charges were filed, though the grand jury recommended an investigation by state gambling officials.

Baker, the Black Hawk spokesman, denied that any public money was misused.

As the battle goes on, another huge casino is being built in Black Hawk. Developers are considering adding a hotel.

Despite the acrimony, some Black Hawk casinos would support the road, but there are no signs of public money to help build it. Black Hawk's casinos have pledged to help raise money for the tunnel.

"The more access to this area the better," said Mike Shubic, manager of the Isle of Capri, Black Hawk's largest casino. "We're firmly committed to making it safer and more comfortable for people to get here."