Saturday, July 1, 2006

Efforts to expand Texas gambling haven't made it out of the legislative starting gate, but backers hope the state's big money needs, driven by the new school tax overhaul, will change their luck. Despite the fierce opposition such proposals always draw, candidates for governor this year are open to them in varying degrees.

In midst of governor's race, talk about gambling grows

San Antonio Express-News

AUSTIN — Efforts to expand Texas gambling haven't made it out of the legislative starting gate, but backers hope the state's big money needs, driven by the new school tax overhaul, will change their luck.

Despite the fierce opposition such proposals always draw, candidates for governor this year are open to them in varying degrees.

Only Gov. Rick Perry, who has favored loosening restrictions on gambling, says he won't try it again, but all three of his major opponents said Friday that they would support expanded gambling efforts.

"It has already been stated that the economy has to grow at least about $2 billion a year just to meet the property tax reduction requirements," said Bill Stinson, president of Let The Voters Decide, a group of real estate developers that favors bringing in casinos. "And that doesn't start to address the needs for school finance and health care and transportation and prisons and all the other areas that the state provides for the citizens.

"The only thing that's left is increasing the sales tax, which is one of the highest in the nation, or an income tax, or to allow the voters to decide whether or not they would like to allow full casinos to come in that generate jobs and bring in revenue to Texas," Stinson said.

Opponents say a gaming expansion would foment gambling addictions and a host of social ills, all for an unreliable funding stream.

"I'm going to oppose it until I have no breath left to oppose it," said Cathie Adams, president of the conservative Texas Eagle Forum. "It would so change the culture of Texas, it would be devastating.

"You (will) have people no longer having a work ethic, but instead an ethic of last chance, spending the family's fortune and not ... providing for the future."

Billions, maybe
Those who want to build casinos or install video lottery terminals — VLTs, or slot machines — at racetracks say any social ills they could bring already are here, since Texans gamble in other states, at Texas tracks and through the Texas Lottery.

They say Texas is missing only the revenue spent elsewhere.

Big casino companies working through the Texas Gaming Association envision fancy destination resorts in cities, including San Antonio. They say their proposal ultimately would bring the state $3 billion a year.

Tommy Azopardi, president of the racing-industry-based Texans for Economic Development, said VLTs at tracks could provide at least $1.2 billion annually.

It's estimated Texans will spend more than $3 billion this year on gaming in other states, said lobbyist Chris Shields, director of the Texas Gaming Association, composed of publicly traded casino companies, including the Las Vegas Sands.

"Texas gaming revenues are paying for the public schools and transportation system in Louisiana," Shields said. "We don't know what the (Texas) revenue picture will be in January. We think there is a reasonably good chance the Legislature would find a non-tax revenue stream of this magnitude very valuable."

Drooping lottery revenues point to what an unreliable money source gambling is, said Eva DeLuna senior budget analyst for the Center for Public Policy Priorities, which advocates for programs for lower-income Texans. "It's not a good long-term way to pay for anything that's growing," she said.

Still, the money could tempt lawmakers returning in regular session in January.

"I think there are a lot of projects that have been put off until they got school financing resolved. Those issues are going to come to the forefront," Azopardi said. "They are going to look for revenue sources to meet those expenses."

The governor's role
A constitutional amendment would be required to bring casinos to Texas, and most likely to bring VLTs to tracks. Some have said they could write VLT legislation without one, but the state attorney general in 2003 said the Constitution doesn't allow Texans to operate the machines.

An amendment requires a difficult-to-reach, two-thirds vote of lawmakers and voter approval on a statewide ballot, but is immune to a governor's veto. An unfriendly governor, however, could scotch accompanying legislation detailing how gambling expansion would work. A friendly one could help it pass.

Enter the governor's race.

Perry in 2004 supported VLTs as a way to help pay for public education but backed away after it failed to win over the GOP-majority Legislature and as the economy brightened. He had suggested his proposal would help control gambling by leading to the elimination of illegal eight-liners.

The governor flatly opposes casino-style gambling and has no intention of offering VLTs again, spokesmen for the governor said.

"The notion of a massive expansion of gambling in Texas to answer the challenges of Texas is not realistic, because the Texas Legislature isn't going to pass it," spokesman Robert Black said.

Three gunning for Perry's job think an expansion is realistic enough to talk about.

Democratic candidate Chris Bell is open to casinos with local approval and to slot machines at racetracks to raise money for education. He strongly opposes VLTs in convenience stores or other venues outside of what he calls the "controlled environment" of a track or casino.

"I don't want to offer casino gambling as any kind of cure-all, but ... it could be a steady source of new revenue for the state, and I think we should at least keep it on the table," Bell said Friday.

Comptroller Carole Keeton Strayhorn, an independent running for governor, supports slot machines at existing tracks, with the revenue dedicated to property tax cuts and public and higher education.

She said voters should be allowed to consider casino gambling — and other issues — through referendums.

"We are conservatively sucking 1 to 2 billion dollars a year out of our Texas classrooms that's going to Louisiana, New Mexico, Arkansas, now Oklahoma," she also said Friday after speaking to a convention for Texas teachers. "I want to repatriate those dollars, those ponies and those jobs back to the schoolchildren and our Texas teachers."

Independent hopeful Kinky Friedman is for slot machines at tracks and casinos, with the revenue going to education. He calls it "Slots for Tots."

"Half the people in Vegas are from Texas. We fuel the economy of five other states, folks. I want to get that money reversed. I want it coming back to us," Friedman told the Texas Classroom Teachers Association on Friday.

Taking it to lawmakers
Sen. Rodney Ellis, D-Houston, has proposed expanded gambling since the early 1990s and still favors it.

"I think it'll be a serious proposal on the table," Ellis said.

Sen. Jeff Wentworth, who favors VLTs at tracks but probably would oppose casinos, noted there will be legislative changes in November — "five new senators and who knows how many new state representatives" — that could make a difference.

"It's just human nature. We all want everything. We don't want to pay for it," the San Antonio Republican said. "VLTs are a voluntary deal. Nobody's making you go to the track."

Sen. Jane Nelson, R-Lewisville, a leading opponent of gambling expansion, bristles at such talk.

"It is going to hurt the people who can least afford to gamble, people who should be spending that money on food and diapers for the kids and are hoping they are going to hit the big one and all their problems are going to be solved," she said.

She doesn't foresee a change in lawmakers' overall antipathy to gambling expansion, but added, "The forces are tremendous."

Texans for Public Justice, which tracks money in politics, says more than 200 donors with an interest in gambling gave $4.6 million to Texas politicians in the 2004 election cycle alone.

Gambling backers suggest providing information about its economic benefit to the state is their strongest card.

But relying on that revenue should be something of a last resort, said Rep. Robert Puente, D-San Antonio.