State by state, they ante up, betting on gambling taxes as the casino industry spreads to every corner of the country and most points in between.
Contained to just Nevada and New Jersey a quarter-century ago, casinos now hold sway, in various forms, in 39 states. A 40th, Massachusetts, is in the process of selecting operators to open three full-blown casinos plus a slots parlor.
The holdouts, including Virginia, can now fit around a single, 10-handed poker table, if they were into that sort of thing (and if nobody invited the District of Columbia, which is also bereft of casinos).
In time, though, they are likely to be playing shorthanded, as more cash-strapped states yield to the promise of more jobs and new revenues without new taxes.
“The growth hasn’t crested,” said I. Nelson Rose, a Whittier Law School professor who closely follows gambling legislation across the country. “It’s going to continue.”
The states that haven’t answered the siren call — and that don’t have Indian casinos operating on tribal lands, which are beyond the reach of the states — form an odd ad hoc coalition.
The holdouts are both red (South Carolina) and blue (Vermont). They’re clustered in the South (Tennessee, Kentucky, Arkansas, Georgia) and Northeast (New Hampshire), but also include Utah and Hawaii.
Most of the abstaining states allow some form of commercial gambling, from lotteries to horse-betting.
The reasons for resistance to casinos are numerous: Evangelical Christians and Mormons object for religious reasons; advocates for the poor loathe gambling’s impact on the needy and seniors; small government advocates don’t want states generating more money for more programs; businesses that might have to do battle with casinos for customers don’t want the competition. There are almost always concerns about corruption, crime and addiction, which the casino industry dispels with gusto.
Academics, analysts and lobbyists aren’t willing to lay odds on which holdout is most likely to become the 41st casino state, although a New Hampshire panel is working on regulations for a possible future casino, and two casino bills have been filed by a top Kentucky legislator.
Everyone agrees Utah is a sucker bet, given that the Church of Jesus Christ of Latter-day Saints condemns gambling as a “spiritually destructive” evil.
Odds apparently aren’t much better in Virginia, where even the most ardent proponents say casinos don’t stand a chance.
“Forty-nine states will have it before we get it,” lamented Richard L. Saslaw, the Virginia Senate’s Democratic leader who has supported casino proposals in the past.
Forty-nine? “Maybe 48,” the senator from Fairfax County said, acknowledging that Utah might hold out longer.
Casino legislation, Saslaw said, would never get through the House, where Republicans have a supermajority — and little-to-no appetite for gambling bills.
Both House Speaker William J. Howell (R-Stafford) and Majority Leader M. Kirkland Cox (R-Colonial Heights) oppose it, along with some Democrats.
“I think overall it has negative human impact that outweighs any potential economic impact,” Howell said. “I don’t think it’s the right thing for the commonwealth.”
Over the past two decades, every effort to legalize casinos in the commonwealth has died, including two serious attempts to bring riverboat gambling to Virginia in the mid-1990s.
Those proposals had enough momentum that the industry poured lobbying money into the state, hoping to break open what would have been one of the East Coast’s first commercial casino jurisdictions outside of Atlantic City.
“Oh my God, there were more lobbyists being paid than there were living lobbyists,” said Charlie Davis, whose mid-’90s clients included Harrah’s Entertainment and slot-machine giant International Game Technology. “Those were two of my more memorable years from a business standpoint.”
Since the last proposal was squashed, the veteran Richmond lobbyist said, the industry has steered clear of Virginia in favor of more fertile terrain.
Still, that hasn’t stopped some lawmakers from floating new proposals. The latest came from Sen. L. Louise Lucas (D-Portsmouth), who submitted a series of bills this year to bring a casino to the Hampton Roads area and use the taxes to offset regional road tolls.
Though the proposal didn’t stand a chance, the Virginia Assembly of Independent Baptists declared its opposition — just in case.
“I’m always concerned that it’s a battleground issue,” said Rev. Eddy Aliff, the group’s executive director. “There’s too much potential harm and not enough benefit.”
Christian groups regularly remind lawmakers of their anti-casino stance, and their message always resonates in Richmond, said Chris Freund, a lobbyist for the Family Foundation of Virginia.
“Really there’s been bipartisan opposition to the proposals,” Freund said. “It usually doesn’t take much effort to defeat them.”
A new study by the Hampton Roads Transportation Planning Organization said a casino resort in the area could generate $113 million in annual tax revenue and create at least 1,900 jobs.
The report won’t move the needle, predicted Davis, the Richmond lobbyist. And so far, neither has the embrace of gambling by neighboring West Virginia and Maryland.
Twenty-five years ago, the U.S. casino market consisted of Nevada and Atlantic City. Period. Then came the Indian Gaming Regulatory Act of 1988, which authorized casinos on tribal lands, followed by the proliferation of riverboat casinos along the Mississippi.
When Delaware legislators approved racetrack slots in 1994, the dominoes began to fall around the mid-Atlantic, too: West Virginia followed first, then New York, Pennsylvania and, eventually, Maryland. All of those states have since expanded their casino laws — most recently New York, where voters just approved up to seven Las Vegas-style commercial casinos in a state that already has five tribal casinos and nine racetracks with slot machines.
The expansion, Gov. Andrew M. Cuomo (D) told reporters, will spur economic development and keep gambling dollars from going to Pennsylvania and other neighboring states. Pennsylvania once said the same thing about New Jersey and Delaware, which have seen their gambling revenues plummet as casinos open in surrounding states. (Apparently, there is only so much pie to be shared.)
Other major states that already have some forms of casino gambling are pondering expansion, too, including two that have industry lobbyists salivating: Florida and Texas.
In “High Stakes: The Rising Cost of America’s Gambling Addiction,” author Sam Skolnik argues that the states themselves are becoming addicted to gambling, relying heavily on tax revenues from casinos and lotteries to prop up their budgets.
There are now more than 500 commercial and 425 tribal casinos across the country. And the stakes are enormous: Commercial casinos raked in $37.3 billion in gross gambling revenue last year, according to the American Gaming Association. Tribal casinos collected $27.9 billion, according to the National Indian Gaming Commission.
For states that add heavily taxed commercial casinos, the windfalls can be significant. Pennsylvania’s 11 casinos generated more than $1.4 billion in gambling taxes in the most recent fiscal year. Maryland’s four casinos have paid about $350 million in gambling taxes in 2013.
That Maryland got into the game at all might have seemed unlikely years ago, when anti-gambling sentiment was strong and a huge push to approve slots died in 2004.
“An awful lot of initial efforts are defeated, so you keep going back,” explained Steve Norton, a casino consultant who has worked on efforts to introduce or expand casino gambling in countless states. “In Indiana, I went in every year for six years until they passed legislation. I was there for the first one in West Virginia, which didn’t pass; but they came back six or seven years later and passed it.”
In Maryland, the about-face didn’t take nearly as long. Three years after the original slots debate ended with a thud, Maryland voters approved a referendum allowing for up to 15,000 slot machines at five locations. Last year they backed a dramatic expansion of gambling in the state, including a sixth license, in Prince George’s County, along with live-action table games and 24-hour operations.
When the Prince George’s casino opens, in mid-2016, Maryland will have one of the most concentrated casino markets in the country, with three massive gambling halls along the Baltimore-Washington Parkway.
Virginia gamblers are already flocking to Maryland Live, based on random samplings of license plates in the seven-story parking garage. The Prince George’s casino is expected to lure even more people from the Old Dominion, especially if it is built at National Harbor, where MGM Resorts International wants to open a $925 million gambling resort, just across the Woodrow Wilson Bridge from Alexandria.
“You can bet that at that casino across the river, probably a third to 50 percent of their revenue is gonna come from Virginia,” said Saslaw, the state senator. “They’ll be raking in a fortune before it dawns on us that we should have done that a long time ago. It’s money that could have stayed in Virginia, but once again we’ll be left out in the cold.”