Since the gambling issue will be decided here Tuesday, The Post assembled representatives from both sides to argue their cases. Proponents estimate it would generate $35 million net in the first year. What follows is an abridged transcript of the discussion:
What is your best argument for or against legalized gambling?
The Rev. John D. Bussey: Being a minister of the Gospel of Christ, I would have to be against gambling in any form. But if I were a person who wanted to gamble, I would say to people please do not saddle yourself with this Initiative No. 2 because it is ambiguous, loaded with statements and phrases which will allow them leeway to do whatever they want. Pretty soon, you'll have casino gambling and everything else in this city.
Jerry Cooper: In our committee study (D.C. Committee on Legalized Gambling), we determined that gambling was an adult recreational activity and a great majority of the people of Washington it seemed to us were participating and engaging in various forms. We thought in continuing that freedom of choice people should express their will at the ballot box and also to express their choice in certain specified types of gambling. There are many people who like to engage in lotteries who don't participate in parimutuel activities and vice versa. There are many people who like to play horses, dog races and that kind of activity and don't play lottery . . . We don't feel that religion should play a part because we feel that should be kept separate. If you have religious views they should be held sacrosanct and you should be given the right to express them in whatever way you so choose. Nobody should tell you how you should express your religious views. Nobody should be able to tell you how to express your gambling.
Councilman John Ray: Gambling has a negative factor in it. I think you can have a Las Vegas and a Reno and you can make a profit because people are making money from some source and bringing it into those cities. But gambling is just like welfare. It's a parasite . . . It just starts deteriorating society. The work ethic breaks down and the whole process breaks down. I think government advertising the citizens to go out and gamble, spend your food money is just what's wrong with this country. Finally, in this legislation we're going to set up kennels and arenas and (jai alai) frontons, where are we going to put them all? Are we going to put them in Georgetown? Across from the White House? Spring Valley? Cleveland Park? Capitol Hill? No, they're not going to be there. You know where the dog tracks are going to be. You know where the kennel is going to be. It's going to be over there in poor old Anacostia Southeast. Northeast, in the black community. Could you even think of them putting a kennel in Georgetown? A dog track in Georgetown? Across from the White House?
Yvonne Price: Citizens of the District of Columbia should have the choice and they should be able to go to the ballot and make that choice. And further, the District of Columbia is in need of revenue. This is a new source of revenue. Having some experience with our funding from Capitol Hill, I think we've been in a real bind and I think we have to show as we go throughout the country trying to get full representation for the District of Columbia that there are some things that we can do to sustain ourselves. As far as the choice of what people want in the District, I think it is still open as far as what kind of gambling would go on. I do not foresee corruption. I've been to other places where all these games have been played, and the city goes on. I don't know why the District is any different. We have a lot of tourism in this city and I think we could benefit from that, not just from people coming in from Virginia and Maryland.
Brant Coopersmith: For me, the most important reason why we should do this is to provide us with some funds that do not come from taxes and to which District people can point they've payed in. So, they would have more flexibility disposing of it, and particularly permitting the nonprofit organiations in the city to share with the government the benefits of it.
Alvin O. West: I am opposed to gambling as a matter of principle. I think it's just another aspect of catering to the human weakness of trying to get something for nothing. To me it's morally wrong to have 999 losers just to make one winner. And under the numbers system, you even cheat that winner because what he gets at best approximately 60 percent of what he should be getting in proportion to the risk. But going beyond that, I would oppose this Initiative No. 2 in any event because it's too broad. There's no broad public demand as I have ever perceived it for jai alai and dog racing in this city, and I can't see any place for it. If, in fact they were going to offer the citizens of the District free choice as to whether they gamble, they would repeal the entire Title 15 relating to gambling because that law is in the D.C. code. That law expresses the public concensus that gambling is wrong. And if gambling is right, we should repeal the whole thing because under this initative, we wouldn't say 'gambling is right,' gambling is still wrong -- it's permitted only when you get a license from the District to do it. This, it seems to me, is a demonstration of the moral weakness of the position of those who were proposing gambling as a source of revenue for the city. Any city that has to rely upon the weakness of its citizens to support its financial structure isn't worth existing.
D.C. residents spend an estimated $300 million annually on street numbers and $30 million on the Maryland lottery. Would legalizing gambling harness that money for the District of Columbia?
Cooper: First of all, the $30 million we're talking about is a net. It is estimated that approximately $100 million is expended yearly by District of Columbia residents for just activities of lottery numbers as opposed to the $30 million which is estimated would be the net gain, in addition to the retail sales that also are a part of the overall financial expenditures in the neighboring jurisdictions.
Ray: I question these figures in terms of whether it's $30 million or $300 million. I'm not sure. But let's talk about the retail sales. The lottery people go to Maryland and Virginia and they shop and they buy a number of items while they're there. They go there because it's convenient, because the products are cheaper and that's not going to change. They're not going to stop their shopping in Maryland and Virginia simply because we get a legalized lottery They will continue to shop there.
The other side of that is that the Marylanders who work in the city and commute back to Maryland and Virginia, they're not going to stop at a liquor store here or retail store here in commuter traffic and buy a ticket. They're going to still buy across the line. And those who are working out in Maryland and who live in the city and commute back at night, they're not going to come back in the city necessarily to pick up their six-pack of liquor to buy a lottery ticket. They'll still buy it in Maryland where it's convenient to come back in.
On the other hand, I do believe that we will make some revenue from a legalized number thing, but we're not going to make near the money that the proponents are indicating that we will.
I won't argue the moral issue, I'll let Rev. Bussey and others do that. I don't think you can win it on the moral issue. But the point is that this is a city in transition. We're not a New York state, we're not a Virginia, and whatever we do, we run the possibility that these negative things can cripple our attempt to gain full control of our city. We have to realize that we do have Article 1, Section 8 of the Constitution and Congress is still over our shoulder at the decisions we make in this city. We should realize that we're in a transition period, and we ought to get our priorities together and to try to get control of the budget, try to get automatic payment, try to fight as hard as we can to get the full voter representation bill ratified before we go around trying to experiment with these other exotic things.
Coopersmith: I'm interested in the way Councilman Ray doesn't believe the figures despite the fact that the figures about the revenues in Maryland come from an official agency of that state, and despite the fact that the figures on illegal gambling come from the police department. He doesn't buy those figures. Doesn't think they're anywhere near that extent. On the other hand, he asserts that the people from the District of Columbia will not come here to buy their tickets or their merchandise because they go out there just to do that. It's funny that they just go across the street and they don't come back.So, he just makes assertions for which I don't think he has the slightest evidence.
Common sense and reason tell you that if we pay 600 to 1 as against Maryland's 500 to 1 not only will we get our people back, but we'll get a lot of Maryland people. And according to the Maryland authorities, we'll get people from Virginia. Now when they go into the small convenience stores, wherever these terminals are, hopefully we will serve the people well and not establish these long lines that our people are subjected to because of our reluctance to serve them they're forced to go to limited opportunities in Maryland.
Liquor dealers tell us, and Mr. Ray asserts it, that we lose to the general fund $4 million a year in alcohol gallonage taxes. Now, he's saying that the liquor stores who all lost their business to the liquor stores right across the border are not going to get it back if they're paying 600 to 1. That the people are going to deliberately continue to go over there to get less money from a foreign jurisdiction, when they can be helping themselves. I think reason defies that and I think the assertion, without evidence, is typical of the kind of argument that's been made on this issue.
Ray: I would agree with you that the liquor stores close to the line in Maryland are hurt because of the folks who can walk right across the street and buy a ticket. But the fact of the matter is that most liquor stores are not right on the line. If we were to follow your argument, we would think that all the liquor stores are setting right on the line in Maryland and D.C. and everyone's walking across the line to buy these lottery tickets, which is just not the case.
The other thing that I would also point out in terms of the spin-off, as you well know, probably 95 to 96 per cent of the liquor stores, as well as the local community stores in this city, are owned by people who live in Maryland and Virginia. So, the income that they take in, it's going to go back out.
We're going to get a sales tax on that. But you cannot argue with me that most of the liquor stores in this city and most of the local community grocery stores are owned by people who live in Maryland and Virginia.Just go down to the government and look. That's a statement that can be proven by looking at the records.
Coopersmith: May I ask what the relevance is because we haven't made that argument? Our argument is that the District government is losing tax revenues that could be realized if we had these businesses here. We're not talking about where the people who have what they have left over after they pay taxes do with their money, no one's ever made that argument. You raised the argument, we never made it.
The point you have to respond to is whether or not the residents of the District of Columbia are spending somewhere between $75 and $100 million on lottery tickets in Maryland, which is verified in my judgment by the state of Maryland itself and its figures of $30 million in revenue. And whether or not when they buy those they make those retail purchases at the same time, and they won't do that here.
Those are the relevant issues and whether or not the owners of the stores (live outside the District) I don't know. We had testimony from an amputee who has a store out there, who said he lost $50,000 a year business. I don't know where he's from. We didn't ask that.
West: There's a price you pay for introducing gambling into the District that it seems to me would far outweigh any theoretical benefits that might come from additional tax revenue. There are expenses of the District government that would be involved in this kind of operation proposed in Initiative 2 that would not be covered by the revenues from this gambling operation under the Gambling Control Board.
The District auditor is required to audit all of the lottery and numbers records, which is bound to be a mountainous task, and that would have to be paid out of the general revenues of the District, whereas none of the funds and, this I think is one of the key points, to be generated by the operation of the Gambling Control Board will go into the general funds of the District. I cannot understand why the proponents of legalized gambling drew their initiative in such a form. Absolutely none of it goes into the general fund of the District and the council has really virtually no control over the operation of this Gambling Control Board once it's set up. It's completely autonomous.
Such money as might be left over after they have paid the expenses of their operation would be allocated first of all by the gambling board. The city council, of course, has a function of giving its advice and consent, but that's after the allocation is made. The city council does not have any authority to make, to direct how the allocation shall go. Only the gambling board shall do that. And there are none of those beneficiaries proposed in the initiative which gives any indication that the tax burden on the District taxpayer is going to be lessened in any way.
Rev. Bussey: I think the simple answer is that Initiative No. 2 as written now would not harness the money for the District of Columbia. This money will not at any time, according to the way the bill is written, enter the point where D.C. officials and the regular budgetary procedures could be enacted. It is solely under the absolute discretion of this so-called gaming board.
Even though the District of Columbia government must allocate something like $250,000 to start up, at no time in that bill does it indicate that this money be returned to the D.C. Treasurer. They claim they did this because they wanted to keep Congress from having the oversight over this. But you see what they did here was also to keep the District government from having any oversight over it as well.
Coopersmith: The board is an independent agency of the government not unlike the school board except the members are appointed. The essential difference is that when the school board gets money no one can tell them what to so with it. But when the gaming board gets money they will not be able to spend it without the approval and the advice and consent of the (city) council. s
Now, the reason why the funds were segregated. Firstly, we want to make certain that private non -- profits share in the proportions and the amounts that will be approved by the government in any given period of time. But that was one of the major motivations for going into this in the first place was to provide a source. This town doesn't have the normal industry that a Philadelphia or a Detroit has. Its people are spending hundreds of millions of dollars a year and they could in part benefit the private organizations which serve them. It's a way to get some support for private organizations that exist here that do not exist other places. So you had to segregate those funds.
I presently serve as finance chairman of the Board of Trustees of the United Planning Organization. It has many deligate agencies and many programs. It's programs such as those that I was primarily concerned with. I came to this issue from service on the UPO board when we first approved it back in the early 70s and we're just recently ratified in again with basically a new board.
The programs receiving funding include RAP, drug abuse programs because people are concerned about drug abuse and they've insisted. There are some senior citizens programs. The report of the study commission cites pages and pages of recommendations of the kinds of organizations. That was one thing we wanted to say to the Congress and to the community. This is different from tax money. These are monies from contributions and raffles. In other words, the lottery is for the city what the raffles and bingo are for churches and other purposes.
Now some people have read that the organization which sponsors it gains as well, and we're gaining it for our private groups. We also wanted to segregate the money, if this is lawful, and it may not be, we will find out, we wanted to say to the Congress that we want to have a pile of money of our own for when the Congress, because some man from Kentucky or some man from Vermont or some man from Texas, decides we should delay a major capital fund. That sort of thing held up the location of Shaw Junior High School for years and years and years in this city, and we were searching for a device which would take these revenues which don't come from taxes and use them for purposes, whether they would be capital purposes, that can be determined. But with the approval of the mayor.
It may turn out that is not totally satisfactory. Let's say, for some reason, somebody goes to the courtroom and the judge in the court says you can't do it, the funds must be appropriated in the same way that funds are from Congress. Then all you have to do is change a word, as "proposed" by the mayor.
Ray: The problem is, however, this. Let's assume that the board decided to allocate some money to improve an organization. That comes over and the mayor disagrees with it, and the council disagrees with it. The problem is the mayor and the council still could not direct the board to say we want this money to go to this organization. The initiative is taken by the board. The board could say, 'Well fine. You won't let us give it to the organization we want to give it to, but we're not going to give it to the ones you wanted.' The point is that if we're talking about truly helping citizens and directing the money in places we feel would be most benefical to the city, I don't think we should have an appointed board -- not elected -- that is clearly open to corruption. Everyone is going to be lobbying the board to get their money for their little thing. We're going to have a situation where the board can decide where this money will go. Now we may say no, we will not approve that, but we still cannot direct the board to put the money here, to put the money there or to put it there. I think this is just open for corruption.
We have a situation here where we would have a board which is not elected and not accountable to the citizens, only to the extent that the mayor and city council appointed them and they are there for a certain period of time. And that troubles me for them to have this power to decide where this money will or will not go.
Price: I was wondering if that isn't the way all boards are selected. The mayor appoints and they exert the amount of influence that they still have. Last Thursday when the mayor made his announcements on the budget cuts, I thought about his issue. Because here we're fooling around and talking about we don't want this money when the money is going outside the city. And we need this money for the District to keep people right now going in jobs. The summer is coming. And then we're talking about we don't want the revenue for the city. I mean to me that's very hypocritical.
Rev. Bussey: The bill itself says where the money is going. How are you going to keep those people from losing their jobs?
Ray: Where will one job be saved by the board allocating to these private things? It's going to cost about $3 million just to start up the lottery. That's not talking about jai alai and the dog races. But more important in terms of jobs, there would be very few jobs created from this and when a liquor store or grocery store starts selling lottery tickets they're not going to hire two additional employes to sell those tickets. They probably won't hire anyone to do that. It's not going to create the kind of additional load that they're going to hire an additional person to do that.
In terms of the dog tracks and jai-alai, I sort of lived in Daytona Beach, Fla., for many years and my mother's there. I used to work at the dog track parking cars. Those are seasonal games and by and large what's happened is that they bring in their professional workers with them. They bring them with them. They take them away. So generally the kind of job that is created in the local community are the few jobs parking cars or running the machines. So, we're not going to create that many jobs from this. I think the most we can expect from this in terms of revenue is the amount of money we would get from charging them on the daily operations and what would come in from the lottery. But in terms of job creation. There would be very, very little job creation.
Price: That is your opinion. That has not been proven. In terms of how many people these stores would hire. What kinds of jobs would be created. That has yet to be established. You are just making assumptions.
Cooper: One of the things I think needs to be brought out right away. This initiative if it becomes law is also subject to amendments by the council immediately after it comes back from the Congress. They can amend it.
Coopersmith: With respect to jobs. We're going to have to do regulations on this. We can, I think, require all kinds of things. We can require that no felon, without completing the sentence for five years, work with anybody in this business. We can insist on any number of qualifications. We can insist on people here who bring in extras from the outside that they establish training programs and train local people for it and if they don't get it, they don't get the franchise. Somebody will come in for their competition. These people who want these franchises will have to compete. We're becoming expert in this city on how to get the best deals for the people of this town.
Ray: Another thing I would say is that if you're really concerned about jobs, that should have been in here now. No one should have to remind you after the fact that we have unemployment in this city. And when you were pushing this on the proposition that it's going to create all these jobs for D.C. residents. It seemed to me that anyone who's setting out writing a piece like this would have had a requirement in here that the dog track, the jai alai folks, would have to hire a certain number of employes.
West: I've done a comparison here with the operation of the gaming control board to the school board. This was earlier in the discussion. I think that needs to be refuted because, of course, the school board has to come to the city council for its money. It has to justify what it's spending and the city council has a substantial element of control over what money it gets and how is spends it after it gets it.
Once the gaming control board is set up it has complete control of all its money. It sets its own internal budget. It does its own hiring. It will be subject to no control whatever in the way it operates, and it's that means of operation that will determine how much is thrown off as money to be distributed to these vaguely defined beneficiaries or whether there would be any significant amount left over for them.
It's interesting that even in the start up money, the budget of the board is submitted and the mayor is required under this bill to submit the budget directly to council.And the council when it makes an appropriation must make a lump sum appropriation. They don't get to examine the budget line item by line item. They must make a lump sum appropriation and that money is required to be paid over to the board in quarterly installments.
What if the District were in a financial bind at that time as it could very well be? The budget as submitted by the board and as adopted by the Council would take priority because this bill would require that it be paid over to the board in quarterly installments. We'd be setting up a government within a government really.