Colorado Towns Find Gambling Is A Roll of the Dice

TEN years ago, this tiny Colorado gold mining community was dying. Town coffers were so empty, city council debates were over ''whether to spend $50 for a new tire for the police car or $75 for a new carburetor on the public works truck,'' recalls resident Alan Granruth. It took an uphill legislative battle, but Mr. Granruth and a coalition of townspeople from Black Hawk and Cripple Creek turned to legalized gambling to save their communities. It has brought fiscal recovery - but at a social cost. Stepping from the serenity of the Rocky Mountains into the loud, frenetic casinos is a sensory jolt. The money raised by the shiny slot machines, however, has given Central City's destitute residents new roofs, paved streets, mining museums, and has dramatically boosted employment. Five years ago, before the casinos, fewer than 25 people were employed in Central City. By last year, more than 1,672 had full-time jobs. The city payroll alone was $1.4 million. Yet Central City's prosperity has come at a price that may hold lessons for other American towns banking on gambling for economic development. True, the city council no longer haggles over $50 repair bills. In 1994, the state historical society got $11.6 million of the $41.6 million in total tax revenues. But the new money didn't help all local merchants. In fact, most went out of business when leases were broken or bought out to make way for high-paying casinos, which have raised the ante for property taxes so high that most residents can't afford to play the game. ''As far as I know, only one business that was here before survived, and that was because he put in slot machines,'' says Claude Paul, who owned The Copper Broiler, the local cafe in Central City, with his wife for 13 years. They lost their lease and the restaurant when the casinos came to town. ''I don't mind losing the restaurant so much, but I just don't like that many people on the roads or in town.'' The number of cars driving the scenic two-lane Highway 119 to Black Hawk and Central City, some 30 miles west of Denver, has quadrupled since 1990. The growing number of visitors has brought a hike in nonviolent crime, such as public intoxication, disorderly conduct, traffic violations, bad checks, and petty theft, says Patrick T. Long, a professor in the College of Business and Administration at the University of Colorado at Boulder. Mr. Long specializes in tourism and conducted a study, ''Win, Lose or Draw? Gambling with America's Small Towns,'' sponsored by The Aspen Institute in Washington. Prior to limited-stakes gambling, the town of Black Hawk had no police force. Today there are 22 police officers with a $1 million budget. After only one year of gambling in Central City, total reported crimes increased from 72 to 586, Long reports. ''We gained a lot in some ways, but we lost a lot of our people and sense of community,'' says Jennifer Nowak, city clerk for Central City. ''They were traumatized by the amount of change that happened so quickly. Our identity changed instantly. They couldn't deal with the extra traffic and construction or the idea of gambling being here. Most of them just left.'' NANCY TODD, a political consultant specializing in gaming in Baton Rouge, La., says, ''Legalized gambling can work everywhere if it can be legislated and regulated correctly. It's been a tremendous boon to depressed areas of Mississippi.'' But in part because of gambling's mixed record, its pace of growth is slowing, experts say. In the November 1994 election, only six out of 15 gaming initiatives in 13 states passed. Long predicts that 1995 could be the second straight year that no new non-Indian casino gaming jurisdictions open up since the flurry began seven years ago. Some experts say the lull is temporary, caused by a strong national economy. Given the choice of gambling or other viable development options, gaming falls short. Long cites factors such as poorly written legislation, industry scandals, and the conservative, family-values backlash evident in the 1994 general election.