States Give Gambling a Closer LookBy STEPHANIE SIMON
At least a half-dozen states are weighing whether to expand gambling opportunities, as longtime proponents of slot machines, video poker and casinos seize upon the recession to promote gambling receipts as a quick-and-easy solution to budget woes.
The proposals, most still in the early stages, include a Maryland bill that would put 3,000 slot machines in airport terminals, efforts in Kentucky and Nebraska to allow slot machines at racetracks and a proposal in Illinois to allow lottery tickets to be sold online.
Perhaps the most far-reaching campaign is in Texas, where pro-gambling lawmakers are pushing for 12 new Las Vegas-style casinos, one in every major city across the state. Other bills circulating in Austin would allow casino gambling on tribal lands and slot machines at horse and greyhound race tracks.
On a Web site bright with photos of beaming students and gleaming rail lines, the Texas Gaming Association pledges that revenue from the casinos would fund $1 billion in new college scholarships and $1 billion in transportation improvements annually.
In a time of deep anxiety about state budgets, those promises may make all the difference, said Texas state Sen. Rodney Ellis, a Democrat who has long promoted gambling expansion.
Mr. Ellis acknowledged that his state's economy so far is better off than most states because of the cushion provided by the recently ended oil boom. Still, he said, "even in the Lone Star State, there's tremendous preoccupation about how we make the books balance, not just for this biennium, but for the next."
Mr. Ellis said he doesn't gamble, but that a lot of his constituents do -- and he doesn't want them spending that cash in neighboring Louisiana or New Mexico. "I want that revenue in Texas," he said.
Over the decades, states have often turned to gambling to raise money in tough times. The recession of the 1970s spawned a boom in lotteries. As factories closed and manufacturing jobs began to disappear in the late 1980s, communities in Iowa and Illinois turned to riverboat casinos, which soon spread south to Missouri and Mississippi. And in the early 1990s, as Indian tribes fell farther behind rising prosperity in the nation, more and more turned to casino gambling.
But as an economic-development tool, gambling is far from a sure bet, analysts said.
This past year has shown the $93 billion-a-year U.S. betting industry isn't recession proof. Several state lotteries reported significant drops in sales late last year as the economy began to falter. Gambling revenue in key markets has plummeted and tourism is off in top markets such as Las Vegas and Atlantic City, N.J. Nevada, which depends heavily on gambling revenue, faces a severe budget crisis.
"Just saying, 'Oh, we need money to fill a budget hole, let's legalize gambling' -- that doesn't seem very farsighted to me," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada at Las Vegas.
For their part, some gambling operators are hoarding their chips rather than investing in expansion at a time when customer outlays are down. "No one has the money to expand," Mr. Schwartz said. In Kansas, the state authorized four casinos in 2007, but developers of three of the sites have since backed out, citing the poor economy. Voters in Maryland authorized as many as 15,000 new slot machines last year -- but the state got bids to develop less than half that many.
In Texas, gambling interests have spent heavily on campaign contributions and lobbying to win over state lawmakers. At least $3 million was spent on gambling-related lobbying in the 2007 session, according to Texans for Public Justice, a watchdog group. One advocacy group supporting legalized gambling has posted a list of legislative "friends" and "enemies" online and urged constituents to make heavy use of email links to plead their cause.
But opponents also have heavyweights on their side: Gov. Rick Perry, a Republican, has said he won't support expansion of gambling and the conservative Christian lobby stands with him.
Suzii Paynter, who directs the public-policy arm of the Baptist General Convention of Texas, dismissed rosy projections of gambling revenue as "billionitis." She argues that casinos wouldn't so much bring in new dollars as cannibalize revenue from more-wholesome attractions, such as amusement parks, campgrounds and professional sports.
"We built our state on family-friendly tourism," Ms. Paynter said. "And we have a saying in Texas: 'Dance with who brung ya.'"
—Tamara Audi contributed to this article.