Wednesday, April 28, 2004

Slot machines may or may not ever be legal in Texas. But as long as the Legislature keeps talking about it, a well-dressed, well-paid coterie of lobbyists will keep counting their winnings.

Gambling lobbyists are raking in the money

By Jay Root, Star-Telegram Austin Bureau
April 28, 2004

AUSTIN - Slot machines may or may not ever be legal in Texas. But as long as the Legislature keeps talking about it, a well-dressed, well-paid coterie of lobbyists will keep counting their winnings.

Working for casinos, Indian tribes, racetracks and other gambling interests, some of the best-known lobbyists in Texas are being paid handsomely to push for, kill or influence the details of legislation aimed at bringing Vegas-style slots to a handful of racetracks, including Lone Star Park at Grand Prairie.

A handful of poorly compensated lobbyists who object to gambling on moral grounds are also roaming the Capitol corridors, trying to talk legislators out of relying on slot machine revenues to find more money for public education.

All told, more than $3 million has been poured into the effort, with the pro-gambling forces outspending the opponents 3 to 1, according to a report compiled by Texans for Public Justice, which tracks the influence of money in politics, to be published today.

"In every session of the Legislature, the odds are that one issue jumps up to be a cash cow for the lobby," said Craig McDonald, director of the watchdog group. "It's a sure bet that this year it's gambling."

Political veterans compare the lobbying effort to the fight to bring pari-mutuel betting to Texas in the 1980s, the creation of the Texas Lottery in the 1990s and the telecommunications battles of the last few years.

"I sure see a lot of nice-looking suits sitting out there in the audience," said state Sen. Jane Nelson, R-Lewisville, who is firmly opposed to legalizing slot machines. "There's a lot of money floating around, and that's a shame."

One of the best-paid lobbyists is former Texas Secretary of State Elton Bomer, who is promoting the slot machine legislation for the racetracks. His contract with the Texas Racing Agri-Industry Council has been valued at $200,000 to $250,000, according to the report.

"There's a lot of potential revenue involved, that's why it's such a big deal," Bomer said. "This is an unbelievable-sized market."

Indeed, at Lone Star Park alone, state officials estimate the track would generate $1.2 billion a year to be divided up among the state, the track, the horsemen and other parties. All the tracks combined would pull down $2.6 billion in revenue that could be divided in a variety of ways, depending on which proposal prevails.

With that kind of money on the table, casino operators in border states that have been making a mint off itinerate Texas gamblers are trying to fend off the competition. They've hired their own team of lobbyists.

"It's in their best interest to see this not happen," Bomer said. Among those retained by out-of-state interests are Neal T. "Buddy" Jones, one of the top lobbyists in Austin. Jones represents New Mexico racetrack and casino owner R.D. Hubbard, and is being paid between $50,000 and $100,000 to lobby for his interests. (Jones' long list of clients includes the Tarrant County Hospital District and the Arlington school district, state ethics filings show).

Also pouring money into Texas lobby contracts are Boyd Gaming (up to $300,000) and Harrah's Entertainment (up to $50,000), both of which operate casinos in Louisiana, disclosure reports show.

Indian tribes are also spending heavily on lobbying, with the Tiguas of El Paso and the Alabama-Coushatta Tribe in East Texas spending up to $655,000 combined to promote the legislation, the report shows. The Kickapoo Indians of South Texas, who fear that slots installed at San Antonio's Retama Park racetrack would drain customers from their casino in Eagle Pass, are spending up to $200,000 to protect their interests.

Some companies who have hired big-gun lobbyists are just trying to get a piece of the technology business that will flow from as many as 40,000 slot machines running 24 hours a day at the racetracks.

Multimedia Games Inc. of Austin, is squaring off against GTECH, the huge Rhode Island-based company that operates many of the Texas Lottery's games, to get the lucrative contract to operate the computer system that would control the slot machines. Multimedia is spending between $250,000 and $550,000 on the lobbying effort.

"There's a lot of money being spent on both sides," said lobbyist Ron Lewis, a former state representative from East Texas who is representing Multimedia. He said his client's goal is to make lawmakers aware that there are other companies besides GTECH that can operate gaming technology.

"We want a fair process," said Lewis, who is close to Gov. Rick Perry. "We don't want any one company dominating things."

Another ubiquitous lobbyist, if not the best paid, is Weston Ware, legislative director of Texans Against Gambling. He has three lobby contracts worth up to $30,000, according to the watchdog report. Ware says the social costs associated with gambling, such as addiction and bankruptcy, are greater than the $1 billion to $1.5 billion a year the state projects it will gain by legalizing slots.

The best bet for gambling foes such as Ware is to block passage of a constitutional amendment authorizing the slots. That requires a hard-to-get two-thirds vote in House and Senate; without that hurdle, the horse industry might have a sure bet on its hands.

"We have always faced a huge horse-racing lobby," Ware said. "It may be the most powerful lobby in this town."