IF THE D.C. SLOT machine initiative gets approved on its promoters' terms, the nation's capital could become the envy of the gambling world. At least that's the conclusion to be drawn from The Post's story on Sunday by Lori Montgomery on the murky financing and key players behind the scheme to bring video lottery terminals into the District.
According to the story, gambling experts say the oversight rules laid out in the slots initiative, which were drafted by slots proponents, would give the District the most lenient rules in the country. Moreover, according to a legal analysis prepared by the D.C. attorney general, the city would not be able to adequately determine the suitability of people operating the proposed 3,500 slot machines in Northeast Washington, let alone know who is really behind the operation. When told of the rules proposed in the D.C. initiative, the former chairman of the Nevada Gaming Control Board called them an open invitation to "Mafia Bank Inc."
As it stands, city officials know next to nothing about the people who are putting up the money to finance gambling in the District. And what is known ought to cause Mayor Anthony A. Williams (D) and other civic leaders to cease straddling the fence and come out against the venture, as a majority of the council have done. City leaders don't know the terms and conditions on which North Atlantic Investments, which is paying for the slots campaign, obtained cash from Bridge Capital USVI, a private lending firm in the Virgin Islands owned by two Las Vegas entrepreneurs who have tried and failed for years to qualify for a license to operate a big-time gambling venture. Moreover, Rob Newell, who represents North Atlantic and who is reportedly the moneyman behind the D.C. slots campaign, has a business record that includes managing a California hotel that went bankrupt, owning a Las Vegas casino that failed to obtain a gambling license and was later torn down, and serving as an officer of a Spokane, Wash., investment firm that dissolved after state regulators accused it of swindling elderly, sick people out of their life savings.
Are addictive electronic gambling machines, the "crack cocaine" of the industry, the kind of activity that should be brought to the District? Should the people who stand to benefit the most from D.C. slots -- the fuzzy, out-of-town sources of cash -- be allowed to set up shop in the city without thorough background checks by government authorities? City leaders should be involved in answering those questions. We have already seen widespread violations of local election laws by participants in the slots petition drive. If ever there were a need for an extensive Council probe, the D.C. slots initiative is it. Instead, city lawmakers are being circumvented, and the mayor, who should be alarmed by this end run around the city government, is on the sidelines.
John Ray, former D.C. Council member and legal counsel to Mr. Newell, maintains that the proposed initiative allows the city to determine the suitability of people to operate a gambling facility. He also told this page yesterday: "There is nothing in [Sunday's] article that has made me say Rob Newell should not be a client of this firm. . . . There were a couple of things in the article that I would like to check out for myself to see if they are true." The same might be said of city lawmakers and concerned D.C. residents.