Gaming foes win some battles, but lose the war

By Liz Benston

Friday, Oct. 3, 2003 | 4:51 a.m.

WEEKEND EDITION: Oct. 5, 2003

BALTIMORE -- The National Coalition Against Legalized Gambling kicked off its annual conference in Baltimore last weekend by touting dozens of victories against gambling expansion proposals around the nation.

And NCALG Executive Director Tom Grey vowed to whip casino interests again in coming fights in battleground states like Maryland.

His pronouncement carried some weight because NCALG is the only national organization dedicated to stopping the spread of gambling. Further solidifying NCALG's status as the nation's premiere anti-gambling group, Maryland Attorney General J. Joseph Curran chose Grey's conference to reveal his opposition to the installation of slot machines and the construction of casinos in that state.

"Our best days are ahead of us," Grey told the gathering of about 100 anti-gambling organizers from more than 30 states. "In the early '90s it (gambling) was inevitable. Now it doesn't even look desirable."

But casino industry observers are wondering why Grey is so optimistic.

While Grey's spirited network of volunteers has won a few victories here and there, Grey and his coalition are badly losing the war against the expansion of gambling on a national level.

Despite Grey's best efforts, gambling is growing dramatically in the United States, winning over a nation that depends on lottery money to fund basic services and views slot machines and casinos as reliable tax and job generators.

Some form of gambling has now been approved in all but two states, with consumers spending more on wagers each year than they do at the movies.

Gambling revenue ballooned 570 percent from a decade ago -- and 7 percent from 2001 -- to a record $69.7 billion in 2002, according to casino analysis firm Christiansen Capital Advisors.

"Gambling is winning," said Bill Thompson, a professor of public administration at the University of Nevada, Las Vegas.

No one is blaming Grey for losing the war against gambling -- his coalition is outmanned and underfunded.

Activists note Grey can't or won't commit to fighting gambling everywhere -- instead choosing his battles on a state-by-state basis, while leaving some local anti-gambling activists without any national resources to tap.

Grey regularly makes the news fighting casinos and gambling in places where they are limited or have not been approved such as Illinois, Maryland, Pennsylvania, Rhode Island and Hawaii. But Grey doesn't bother with Nevada, where megaresorts continue to expand on the Las Vegas Strip, or with the big Atlantic City market.

He's rarely heard from in the state where gambling is poised to grow the quickest: California.

And Grey's coalition seems to have little hope of slowing down the growth of gambling in other states where it's likely to expand such as New York, Louisiana, Missouri and Iowa.

Grey said NCALG has essentially "lost the fight" in these states, which have waved in casinos without any indication of stopping their growth.

"They're behind enemy lines," said Grey, who also runs a separate group called the National Coalition Against Gambling Expansion.

California

In California, easily the nation's fastest-growing gambling market, gubernatorial candidate Arnold Schwarzenegger is tapping into a growing backlash against Indian casinos. Residents there are increasingly critical of existing and planned casinos because they contribute little to state and local government budgets while in some cases overwhelming local infrastructure like roads and police and fire services.

California activists are mixed on whether Grey and his national coalition are helpful in dealing with the flood of Indian casinos there.

NCALG has a moral message that resonates more in the Midwest and Bible Belt than with voters in California, who tend to be more liberal, explained Cheryl Schmit, director of Stand Up For California.

Schmit, who isn't affiliated with NCALG, said she runs a watchdog organization that doesn't oppose tribal casinos outright but fights tribes and other groups that use tribal sovereignty to "circumvent" the rights of residents and governments.

"We have 54 tribes seeking (federal) recognition. That is a serious issue here in California," said Schmit, who said she isn't bullish on efforts so far to reign in tribes.

The state is making some headway with recent tribal compacts that put greater limits on casino operations, she said. Also, more lawsuits are challenging tribes' immunity from state laws and Congress appears to be taking notice of efforts by tribes to build casinos off their reservations, she added.

Meanwhile, opposition is mobilizing against plans for a tribal casino in Hesperia, Calif., about 50 miles southwest of Barstow along the route to Las Vegas.

Without campaign help from NCALG, Concerned Citizens Against The Casino is collecting signatures for a referendum to overturn a city council resolution favoring the casino.

Despite his lack of involvement in the local battle, Hesperia organizer Wendy McCreery called Grey a "very encouraging man" whose influence is helping people make more informed choices.

"He has given me hope, McCreery said. "You can start to feel very alone."

"I'm not personally offended by gambling but we need to put the brakes on it," she said. "Any place where (NCALG) sets precedents like that is going to help us."

One of the state's hottest battles also is being waged without NCALG's help. Hundreds of residents in Rohnert Park, a town near wine country just north of the San Francisco Bay Area, are attempting to recall city officials who unanimously approved plans to negotiate with a tribe that expects to build a casino with help from Station Casinos Inc. of Las Vegas.

"I'd love it if (Grey) came to Rohnert Park," said Chip Worthington, a church pastor who has formed an organization called Stop the Casino 101. Though hopeful that "massive public protest" will ultimately kill the casino, Worthington said the group needs all the help it can get.

"We've got a real war going on," he said.

Thompson said he thinks Grey is making a mistake by not taking a role in California.

State residents are increasingly "fed up" with dozens of tribes -- some of them miniscule and landless -- that have lined up to obtain federal recognition for casinos, Thompson said.

"(Grey) should at least throw a line out," he said.

He said the climate may change if Schwarzenegger -- who has refused money from tribes and may fight plans to develop casinos in urban areas -- is elected governor.

NCALG also could be effective in convincing tribes that are suspicious of gambling to pursue other economic development opportunities, he said.

New York

In New York, which authorized up to six tribal casinos, NCALG is lending limited support to court cases challenging the validity of tribal casino compacts with the state and the state's right to enter into those compacts.

Joel Rose, co-chair of Citizens Against Casino Gambling in Erie County, is networking with Grey to fight a proposed casino in the Buffalo region.

The casinos, though already authorized, are facing "significant" opposition from people living nearby who fear they will "suck money out of the community," said Rose, who attended the NCALG conference.

"I've never seen such a misreading of the public mood by public officials," he said. "You're not going to attract hordes of tourists to Buffalo to gamble. It's true we're a poor area. That's the very reason why we don't need a casino."

Picking his battles

Some say Grey is wise to pick his battles.

"In terms of return for dollars spent, NCALG has an impressive track record," said Bill Eadington, an economics professor and director of the Center for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.

"Tom Grey is someone who on a strategic level I have respect for ... though I don't agree with him in all respects," he said.

"The states on his list, which are still 'in play,' are not insignificant in terms of the potential market sizes of commercial gaming industries," said Eadington, who has generated research for the gaming industry as well as for governments considering gambling.

I. Nelson Rose, professor and gambling law expert at Whittier Law School in Costa Mesa, Calif., and a former political campaign organizer, said it would be difficult for Grey or any other group to stop future casinos in states where casinos are hot, such as California and New York.

"There is virtually nothing that anyone could do to stop the proliferation of Indian gaming in California," he said. "Gov. Davis gave the tribes a 20-year monopoly that cannot be taken away."

Regardless of the outcome of the legal battle in New York and voter initiatives on gambling planned in Maine, Indiana and Colorado this year, Grey's small army will remain outgunned and underfunded.

"If Tom wins he has to fight the battle next year," said Thompson, who has conducted research for both pro-gambling government administrations as well as anti-gambling groups.

The gambling industry -- which typically spreads from lotteries and racetracks to slot machine parlors and casinos -- "only has to win once" to gain a foothold, he said.

Some victories

Grey's coalition against gambling has celebrated some high-profile victories over the years, such as a lottery defeat in Alabama and the removal of slot machines in South Carolina. Those hardly made up for the whipping Grey's forces took in 2002, when Bible Belt voters in Tennessee approved a lottery and voters approved gambling expansion plans in Arizona, Idaho, Iowa and North Dakota.

But at the conference, Grey touted a perfect record with respect to thwarting plans this year to legalize "racinos" -- slot machines at horse and dog tracks. While not a factor in California, racinos have become the most popular form of gambling proposed in other parts of the nation in recent years.

Racinos failed to advance in all of the 17 or so states in play over the past year, though the industry is betting that Pennsylvania will still bite this session.

The rest of NCALG's 2003 scorecard shows what appears to be the group's best results yet. Twelve states stalled plans for casinos, six states foiled lottery plans and five states nixed convenience gambling such as slots in supermarkets and bars.

Just a few years ago opposition to gambling expansion primarily came from existing gambling operators, Rose said. For example, lottery proponents in some states contended with opposition from racetrack owners.

Rose, of Whittier Law School, said gambling foes may now be influencing some state legislatures.

"State legislatures were (in years past) legalizing casinos wherever they could without amending the state constitutions," Rose said. "Now, in places like Pennsylvania, the legislatures will not act without approval from the voters, for fear of a political backlash."

Networking

NCALG doesn't have members but instead assists and networks with volunteers in every state -- both individuals and organized anti-gambling groups -- to defeat gambling initiatives. NCALG's annual budget is about $132,000, which helps pay Grey's monthly salary of $3,000 and two part-time staffers but isn't enough to fund advertising campaigns or other expensive lobbying efforts.

Grey is a Methodist minister whose year-in, year-out battle against gambling began in 1991 when he fought a riverboat casino in a small northern town in Illinois. He travels around the country much of the year on a shoestring, staying in the homes of organizers who usually pick up the tab in exchange for his support.

"It's our people against their money and muscle," Grey said. "Ten years ago I was organizing myself from the backs of rooms. Now (local residents) are organizing and networking on their own."

That limits how much help Grey can lend nationwide. Unlike other national action groups, he can't rely on offices in each state to apply constant pressure to counteract gambling proposals. Gambling foes typically organize on their own, calling on Grey to cast a national spotlight when the conflict heats up.

Grey, who has no corporate backers, has made a conscious choice to spend his time attacking gambling rather than campaigning for big donations that could probably better help his effort in the long run, Thompson said.

"He enjoys being the David vs. Goliath," he said. "The problem is when you like it too much."

NCALG is careful to "pass the hat" among anti-gambling advocates and avoid questionable contributions from businesses that may have some interest in the gaming industry, Grey said.

NCALG has never accepted gaming money to fund its campaign, though Grey has directed some funds from casino bosses Bob Stupak and Steve Wynn to charities.

Money alone doesn't breed success, Grey said.

A backlash against casinos is building on its own, separate from grass-roots organizing of local residents, he said. Unlike in years past, governors, lawmakers and, increasingly, businesses, are fighting gambling proposals, he said.

"It's much easier to fight gambling today than it was in 1991 when I started," he said. "Bands were playing, governors were cutting ribbons. It was being waved in as a force of history, as inevitable, without even much opposition."

While casinos are on the rise in existing gambling states, people in newer gambling frontiers are questioning the ability of slot machines to help local economies, he said.

"It's still a tough fight but we've got much more ammunition," Grey said. "And it's a more even fight than it was when I started."

But Grey's unyielding anti-gambling stance may be hurting his ability to gain influence with mainstream voters, Eadington said.

"Their approach is pretty monolithic, that one kind of gambling is just as evil and pernicious as any other kind," he said. "A lot of evidence has emerged to (dispute) that."

The final report in 1999 from the National Gambling Impact Study Commission, a federally appointed group with both pro- and anti-gambling members, cuts both ways. While generally discrediting "convenience gambling" and Internet gambling, the commission's findings were mixed on other forms. Destination resorts -- such as those on the Las Vegas Strip -- have been shown to boost economies by attracting tourist dollars, the report said.

Casinos respond

NCALG is focusing energy on upcoming fights where it believes gambling doesn't have a strong foothold.

Anti-gambling groups will have about a year to shift public opinion in Rhode Island, Ohio and Kentucky, where ballot votes on gambling are expected next fall.

"We need to start now rather than wait until it's on the ballot," Grey said.

Pitched as a relatively painless way to raise tax dollars, the racino proposals have run into a thicket of complications, from power struggles among political parties to infighting between various gambling interests.

The casino industry has acknowledged those problems but dismisses NCALG's influence. The group's supporters are a vocal minority of moral scolds driven by their religious faith rather than a grasp of the facts, critics say.

"(NCALG) had to come up with an economic argument" to justify a moral bias against gambling that doesn't reflect the views of mainstream Americans, said Frank Fahrenkopf, president of the American Gaming Association.

Still, the casino association has been forced to respond to anti-gambling claims.

About eight months ago, the AGA received approval from its membership to testify before state legislatures considering gambling expansion. The testimony is aimed at countering "erroneous" information from Grey and his supporters, Fahrenkopf said.

The AGA only testifies if invited by the state and isn't pushing for casino expansion so as not to upset members with competing properties, he said.

"I'm (setting) the record straight," he said. "At these hearings on racinos, there was no one there giving the other side."

NCALG's premise -- that the social costs of gambling exceed any economic benefits to communities -- is incorrect, said Fahrenkopf, who also lobbies on behalf of casinos at the federal level. Independent research has shown that commercial casinos in particular boost economies by attracting millions of dollars that otherwise wouldn't be invested, he said.

Most Americans -- regular churchgoers included -- don't have a problem with casinos, the AGA says. According to the group's most recent national poll, about 85 percent of Americans view casino gambling as acceptable for themselves or others. The results, released in August, are up from 79 percent last year. The highest acceptance rate of 91 percent was among the youngest adults, a sign of changing attitudes, Fahrenkopf said.

NCALG organizers dispute those findings as self-serving, often brandishing the campaign slogan, "They've got the money, we've got the truth."

Rather than moralizing on gambling, racino critics have taken to bashing the idea that slots should be used to "bail out" the racetrack industry, they say. Most of the money spent at racetracks will come from locals rather than tourists, creating no increase in local net spending, they add.

That argument in particular has swayed businesses, chambers of commerce and other, more influential voters to the anti-gambling cause in recent years, supporters say.

"(Businesses) are most impacted by that loss of revenue" as gamblers spend less of their discretionary income in local stores, Maryland state Sen. Roy Dyson said at the NCALG conference.

But some businesses may be unwilling to oppose casinos because they view gambling as a way for the state to boost tax collections without imposing corporate taxes on non-casino enterprises, Massachusetts state Sen. Sue Tucker told conference-goers.

"I'm appalled at the lack of information and interest" from businesses in fighting gambling, Tucker said. "But when I get to them individually they see my point."

Massachusetts, which has considered both casinos and racinos, faces continued pressure to legalize such gambling because of competition from Eastern racino and casino states including New York, Rhode Island and Delaware.

Businesses and others beyond the influence of the casino industry aren't convinced by arguments that gaming venues improve economies, Grey said.

"The product isn't flying off the shelves," he said. "It hasn't been able to be sold on its positives. It's just about the (tax) money."

At a major gaming trade show and conference in Las Vegas this month, executives acknowledged that the industry hasn't effectively touted the jobs and wages generated by casinos, especially in economically depressed areas.

Racinos are still attractive to legislators because the slots have become major tax generators for states like Delaware and West Virginia in recent years, however, executives said.

Irritant

Grey is the fly on the back of the elephant, operators say -- an irritant, but little more.

"He isn't even a factor" in the company's growth plans, Harrah's Entertainment Inc. spokesman Gary Thompson said.

The AGA and its members are primarily preoccupied with higher taxes these days. Rather than generating more casino taxes by allowing gambling to expand, a few states have instead increased existing casino taxes -- a trend that has analysts concerned about similar moves in other states.

In Illinois in July, Gov. Rod Blagojevich and legislators boosted the top casino tax tier -- on annual casino winnings over $250 million -- from 50 percent to 70 percent, angering casino interests who have called Blagojevich a "communist" and a "dictator."

Grey says the tax hike is probably the most influential recent development in the anti-gambling movement. "The negative perception against casinos is still there," Grey said. "Let them attack Blagojevich -- he'll be known nationwide as the governor who stood up to the casinos."

Despite the setback in Illinois, Harrah's Chief Executive Officer Gary Loveman said he is still bullish on expansion in Pennsylvania, Rhode Island and Kentucky. The process may "take years" rather than months, however, he said.

The company needs to "demystify" gambling and encourage its acceptance as mainstream entertainment, he said.

Still, some companies, including Harrah's and MGM MIRAGE, now say their best and most immediate growth prospects are abroad in places like the United Kingdom, where the government is expected to allow for additional casinos and loosened regulations in the coming years.

International Game Technology, the world's largest slot machine manufacturer, is banking on domestic expansion as well as international growth. IGT executives estimate that at least one state each year will add some form of gambling.

Parting shots

NCALG conference-goers acknowledged that they were in for an uphill struggle. But organizers say they have become savvier and more aggressive in their campaigning.

Members of the anti-casino group Stand Up For Kansas are distributing a flier on Nevada's tax debate that quotes heavily from Gov. Kenny Guinn's state of the state speech on how Nevada's tax system is "broken" and "unstable." "Depending on undependable revenues for funding essential needs is foolish state policy," the flier reads.

An anti-gambling group in Nebraska, Gambling with the Good Life, has created one-page alerts on studies alleging the negative effects of casinos on sales tax revenue and other economic indicators. The documents are "powerful" and can be easily put under legislators' noses, the group says.

Organizers also use email to quickly and cheaply contact hundreds who then blitz lawmakers with their concerns.

NCALG's cause is backed by a variety of Christian churches, from Presbyterians to Baptists. More recently, some chambers of commerce have embraced its message, supporters say.

Support from chambers of commerce was critical in the repeal of the "Vegas Nights" law in Connecticut that supported tribes' legal claim to build the Foxwoods and Mohegan Sun casinos, Jeff Benedict, president of the Connecticut Alliance Against Casino Expansion, said.

The repeal, which will effectively thwart future plans by tribes for megacasinos, was helped by donations of a quarter of a million dollars, Benedict said at the Baltimore conference. "We turned a Hollywood-size spotlight on the issue," he said. "Politicians listen to money, votes (and) adverse publicity."

"It was an amazing turnaround," he added. "Here are the two most lucrative casinos in the country ... and we're saying 'we don't want more of this.' "

Grey, a Vietnam veteran, ended the conference with a speech that was more battle cry than pep talk.

"Attack their product and hammer them on their profitability," Grey, 63, told the group. "Every state has to attack."

Grey also called on organizers to put aside information-gathering and become persistent "salespeople."

"When you're anti-gambling, all you're doing is winning the right to fight again," he said.

"We've never taken off our battle clothes in Pennsylvania," Dianne Berlin, a member of Pennsylvanians Against Gambling Expansion, said at the conference.

Gambling isn't a "quick fix" for state governments, said Berlin, a former first grade teacher.

Gwendolyn Tates, a member of NO casiNO Maryland, is a designer and artist who moved to Maryland from Las Vegas in February to be closer to her family.

Gambling is a way of life in Nevada but doesn't make sense in Maryland, which has social and economic ills that can't be solved with slot machine revenue, Tates said at the conference. The fight will probably be tougher next year, she said.

"This conference has energized me," she added. "They've given us a lot of hope."