Support for Casinos Stalls As States Count the Cost

When America's casino explosion began in the late 1980s, state legislators viewed the prospect of high-stakes gambling halls as something of a magic bullet.

They were seen as a painless way to raise much-needed state revenue without having to raise taxes.

But now the magic is wearing off as legislators and voters in states considering opening their own casinos begin to take an increasingly critical look at the effects of casinos on economies, communities, and families.

The result is that nationwide the backers of professional gaming - an estimated $550 billion industry - are facing stiff resistance.

"What you are seeing is an enormous popular backlash lead by civic groups, religious organizations, political organizations, economic and business groups, people on both the left and right," says Robert Goodman, an expert on the economic effects of casino gambling and a professor at Hampshire College in Amherst, Mass. "They are saying that this is not something that we think will benefit us either socially or economically."

The latest evidence of the national trend came on Tuesday when the New York state Senate voted 41-to-19 to kill a proposed statewide referendum to legalize casino gambling. The proposal would have allowed casinos in the Catskill Mountains, Buffalo, Niagara Falls, and the Lake George region - all in upstate New York.

New York was only the most recent setback for casino proponents. In 1996, referendums seeking approval of casinos or other gambling measures were defeated by voters in Arkansas, Colorado, Nebraska, North Dakota, Ohio, and Washington State.

Also last year, gambling questions were successfully kept off the ballot or bills to legalize or expand casino gambling or other forms of gaming were defeated in 16 other states and Washington, D.C.

The only major victory for the gaming industry came in Michigan in November where voters approved a proposal to open three casinos in Detroit. The referendum passed 52 to 48 percent.

The battle between pro and antigambling forces in Louisiana came down to a November vote that ended in a draw.

Kelly Gannon, a spokeswoman for the American Gaming Association, says the industry's setbacks are due more to economic circumstances than the work of anticasino forces.

State legislators aren't as strapped for cash as they were in the late 1980s and early 1990s, Ms. Gannon says. As a result many aren't looking at the casino option.

The other factor, she says, is that existing casino owners are opposed to the creation of new casinos in nearby states that might draw patrons from their own operations. Such internal division can mean the difference between defeat and victory in close contests.

In the New York debate, Donald Trump, who owns several casinos in nearby Atlantic City, N.J., spent more than $800,000 to ensure that competing casinos wouldn't be opening in New York State. In contrast, the anti-casino forces attribute their success to having the ability to closely study the track record of casinos that opened in the 1990s. Armed with those studies, the National Coalition Against Legalized Gambling seeks to assemble grass-roots opposition to casinos wherever they are proposed.

"No legislature has approved casino gambling or slot machines in almost three years. We've won the overwhelming majority of referendum battles. Even the gambling industry will tell you they have been stalemated since mid-1994 when our organization was formed," says Bernie Horn, political director of the NCALG in Washington.

The group publicizes studies that focus on the problems associated with casino gambling.

One such study notes that 30 to 40 percent of casino revenues come from so-called problem gamblers, people who wager more money than they can afford to lose. Another says that many casinos draw only local patrons and serve as a sponge for discretionary income in a region. The result is that less money is available to spend in local stores and restaurants, causing a downturn in local economies.

Gaming industry officials counter that casinos pump millions of dollars into local economies by providing well-paying jobs to residents. They also say studies of problem gamblers are seriously flawed. The American Gaming Association recently opened a foundation in Kansas City to perform its own research into problem gambling.