Riverboat Gambling Gathers Steam

Las Vegas casino operators, in a controversial plan, may soon enter the gaming business along the Mississippi. GAMBLING FOR REVENUE

SOME states along the Mississippi River, pressed by high unemployment and a sluggish economy, are grasping for a floating straw: riverboat gambling.In Mississippi, Louisiana, and Illinois, several big-time Las Vegas operators are planning to enter the arena. According to Royal Walker, executive director of the Mississippi Gaming Board, Andy Tompkins of Lady Luck Casino in Nevada has applied for a license to dock a boat on the historic Natchez waterfront. Five Mississippi counties have voted for riverboat gambling and five against by referendum vote. The bulk of the tax revenues received from riverboat gambling in Mississippi will go to the state. Mr. Walker also received a license application from Riverboat Corporation of Mississippi, which will be 80 percent owned by Steamboat Development Corporation of Iowa, a company that last summer launched the Diamond Lady and the Emerald Lady, two of Iowa's 19th-century-replica paddlewheel gaming boats. "Our big distinction is that we do allow dockside gaming year round," Walker says. "You don't have to purchase those big motors and big paddlewheels," he points out. "Also, you don't have the fuel cost, the big crew, or as much maintenance as on the cruising boats." In Louisiana about 10 Las Vegas casinos have expressed an interest in entering the riverboat gambling market, says Lt. Joseph Booth, head of the Riverboat Gaming Section of the Louisiana State Police, who declined to name the companies. The majority of these are interested in the New Orleans market. "Frankly, the Las Vegas crowd is now starting to take the riverboat gaming seriously now that it has moved out of the corn fields and into a state whose largest city, New Orleans, is one of the favorite tourist and convention spots in the country," writes Larry Pearson, in the latest issue of International Gaming and Wagering Business magazine. Paddlewheel steamers that cruise out from the New Orleans ports will not be converted to gambling boats, since Louisiana's new riverboat gambling law requires that all gaming boats must be of new construction. Lt. Booth says he does not expect the boats to be on the water until late 1993.

Delta Queen abstains "No slot machine will ever cross the threshold of either of these two boats," says Patrick Fahey, president of the Delta Queen Steamboat Company, speaking of his four-deck Delta Queen and the seven-deck, 382-foot Mississippi Queen, which churn the waters with their large red paddlewheels from New Orleans to Minneapolis/St. Paul. "Steamboating is steamboating, riverboat gambling is riverboat gambling," Mr. Fahey says. In Illinois, another state where there is no limit on the betting, the Gold Coast Casino of Las Vegas is looking into a deal with an excursion boat operator. Illinois has this fall launched the state's first gaming boat, the three-deck Alton Belle, owned by the Alton Riverboat Gambling Partnership. Seventy-five percent of the 20 percent gross gaming-receipts tax on gaming boat proceeds, minus the operation expenses of the state gaming board, will go to the state for education. Twenty-five percent is to be allotted to the local jurisdiction. While states and state legislatures are turning to this new scenic gaming to bring in revenue (See Page 13 for column on the Florida lottery), onlookers are split between some who are glad that more tourists from around the world will come to enjoy the majesty of the great Mississippi, and others who are concerned that the river's untouched stretches of greenery or elegant bluffs may be encroached upon by a tawdry commercialism. "They are counting on riverboat gambling to save the state," says Jeri Hosmer, a member of a local citizens group who has worked to protect the scenic shoreline between Alton and Grafton in Illinois. "But we look at Atlantic City, and we think what gambling did to this city. It just ruined it," she says. Illinois will put another gambling boat on the river this fall, and in 1992 five more gaming boats are scheduled to be launched on state waters, according to Jim Nelson of the Illinois Gaming Board. "We've been moving at a blinding pace," he says. "The people of Illinois were sold the idea that if gambling is controlled by the state it is OK," says the Rev. Wayne Vinson, minister of the Evangel Assembly of God in Alton, Ill. "What happens is that illegal gambling explodes in a state where [it is] legalized. You create a mentality within people ... that gambling is OK ... if the states control it," says Mr. Vinson, who founded the Illinois Gambling Free Rivers organization. As riverboat companies gear up for river gaming in the states where gaming has been legalized, they are turning out replicas of early 19th-century paddlewheel boats. The boats carry the aura of romance and adventure of the first steamboats on the Hudson, Ohio, and Mississippi Rivers, as well as the lure of riverboat gambling, which spread northward from New Orleans after the Louisiana Purchase of 1803.

Tourist trade sought In Iowa, which in 1989 became the first state to legalize riverboat gambling in over a century, Bernard Goldstein's 1,000-passenger paddlewheelers take either the northern route off Muscatine, Bettendorf, and Clinton, or go the southern route to the historic riverfronts of Burlington, Keokuk, and Fort Madison. "In Iowa the idea is to make it more of a recreational trip. The visitors, we hope, are primarily tourists rather than hard-core gamblers," says George Koenigsaecker, Iowa commissioner for the National Heritage Corridor Study Commission, a group that is conducting a study of the Mississippi Corridor. John Connelly owns a fleet of river excursion boats in St. Louis. His Belle of St. Louis will be converted to a gambling boat if Missouri citizens pass the riverboat gambling bill by public referendum in November 1992. Riverboat gambling has met with opposition from people like Rev. Vinson, who says he's against it, not only on religious grounds, but because it's "bad economics. There are not reliable estimates on the revenue riverboat gambling is going to produce. "Every machine has a computer chip in it sealed by the state gaming board," he adds. "The ratio is 80 cents to a dollar. ... Most people will lose." "It is not going to help the economy of these areas except in a very local way," says William Thompson, professor of management at the University of Nevada, Las Vegas. "It might help a little down around the dock. But it is not going to help the big cities; it is not going to help the state, and it is not going to help the region," he predicts. "And the reason for that is the people gambling are from the region; they are coming from within driving distance. They are gambling local money - regional money. "Las Vegas works economically because people that come to Las Vegas come from all over the nation - all over the world," Professor Thompson adds.

Iowa revenue details In Iowa the year-to-date riverboat revenue for the week ending Oct. 20 was $52,851,708 for Iowa's boats. Each boat is taxed 5 percent of YTD adjusted gross revenues on amounts up to $1 million; 10 percent on the next $1,000,001 to $3 million; 20 percent on amounts over $3 million. The tax to the city treasurer is half of 1 percent of gross revenues; the tax to the county treasury is also half of 1 percent; the tax to the Gamblers Assistance Fund is 3 percent; the tax to the state general fund is the re mainder. Today, public interest in and a new awareness of America's heartland river is emerging, somewhat in the manner it did during the 1850s when Mark Twain rode the river as a steamboat pilot, and crowds gathered at the wharf in the port towns whenever they heard the cry "Steamboat's a comin." But the attraction is often not gambling. Sheri Conner, singer and entertainer on the Mississippi Queen puts it this way: "I think what we try to create is the ambience and nostalgia of the steamboat era and the music that grew up on the river. And our passengers and most of the people who come to see us come for this romance and nostalgia. I think that the casino atmosphere is not really what they are looking for or expect at all." "This is not an inexpensive cruise," commented one traveler debarking from the Mississippi Queen in New Orleans. "We took the whole thing from Louisville down to New Orleans, and had there been gambling on this ship we would not have taken it," she explained.