Colo. vote on lottery terminals generates controversy

Jon Sarche

Monday, Nov. 3, 2003 | 8:49 a.m.

DENVER -- It is alternatively portrayed as a way to revive Colorado's stagnant economy by increasing tourism promotion and painted as a boondoggle to give a British company a near-monopoly on gambling along the state's Front Range.

For voters watching the record-setting ad blitz for Amendment 33, it would be easy to believe that the sides are talking about separate initiatives.

The measure on Tuesday's ballot would allow the installation of up to 2,500 video lottery terminals at five horse and greyhound racetracks along the Front Range.

It would dedicate $25 million of the proceeds to promoting Colorado as a tourism destination. Other proceeds would go to state and local parks and recreation and to emergency renovation projects at public schools.

The campaigns for and against Amendment 33 have shattered finance records, spending $9.4 million through Oct. 27.

In one of the state's most hotly contested initiative campaigns, each side has accused the other of lying to voters.

The campaign against the proposal is funded mostly by casinos in the three former mining towns where limited-stakes gambling was approved by voters in 1990. They argue that bringing slot machines to the Front Range will increase compulsive gambling and bring in unfair competition to casinos in Black Hawk, Central City and Cripple Creek.

Proponents are funded largely by British-owned Wembley USA Inc., which owns four of the five racetracks. They argue that the placement of video lottery terminals would be strictly controlled and that the state sorely needs the visitors -- and their spending -- which intensive tourism promotion could bring.

"The more people that come to Colorado, the more people that will be exposed to our sport and other things around the state. We think it will boost the economy of Colorado tremendously by the influx of tourism," said John Manning, general manager of the Cloverleaf Kennel Club in Loveland.

Cloverleaf, which is not owned by Wembley, is one of the five racetracks where the video lottery terminals would be installed under Amendment 33.

Instead of using cash, players would buy cash vouchers to use in the machines, which often simulate casino games such as Blackjack, poker or slot machines. Winning players get printed tickets that can be redeemed for cash.

The machines would be leased and regulated by the Colorado Lottery Commission.

Casino companies earned $707 million last year, of which 14 percent went to state-funded programs, Manning said. Sixty-one percent of proceeds from the video lottery terminals would be returned to the state.

Lois Rice, executive director of the Colorado Gaming Association, acknowledged that casinos would like to avoid increased competition.

"But our opposition is more importantly against an expansion of gambling that's done by one company basically writing themselves into the state Constitution to gain a virtual monopoly on gambling on the Front Range," Rice said.

In 1997 former Gov. Roy Romer vetoed a bill that would have allowed video lottery terminals in racetracks, and voters have rejected several attempts to expand gambling to other communities.

"That tells me that Coloradans like the gambling the way it is in the limited locations that it currently exists," Rice said.

Political analysts said voters are likely to reject the measure, not only because of past reluctance to expanding gambling, but also because of publicity surrounding the recent indictments of two Wembley executives in a bribery case involving video lottery terminals at Lincoln Park in Rhode Island.

"Even when the proponents are wearing white hats, it can be hard to pass initiatives, and in this case, the proponents' hats have turned charcoal gray," Denver analyst Eric Sondermann said.

Amendment 33 sponsor state Sen. Jack Taylor, R-Steamboat Springs, said after voters in 1992 turned down an extension of a sales tax for tourism promotion, funding for promotion almost disappeared.

Taylor, a member of the board of the Colorado Tourism Office, said even with a recent influx of $12 million for promotion, the state is losing $2.4 billion annually in potential tourism revenue by failing to aggressively advertise.

Proponents are trying to "wrap themselves in the cloak of tourism" to hide the potential windfall for a foreign company, said John Dill, chairman of the campaign against Amendment 33.