ATTORNEY AT LARGE: More, more, more … How do you like it?
by Lloyd Levenson
July 1, 2010
Every state government, it seems these days, wants to legalize or expand gaming. If they don’t already have gaming, they want it. And if they already have gaming, they want more of it.
Every
state government, it seems these days, wants to legalize or expand gaming. If
they don’t already have gaming, they want it. Kentucky horseracing interests
want slots to save their industry. Massachusetts is seeking a combination of
resort casinos and racinos. New Hampshire wants racetrack slots and a couple of
smaller casinos up north. Voters in Maryland and Ohio finally crossed the
Rubicon, though gaming in each of those states has yet to commence operations.
And if they already have gaming, they want
more of it. Not content with adding sports betting to its three racinos,
Delaware is in the process of implementing live table games and is considering
additional casino locations. Florida keeps wrestling with omnibus legislation
to satisfy both the tribal and pari-mutuel gaming interests. Iowa, not content
with 17 casinos, is assessing the feasibility of adding four more. Even
Pennsylvania legalized live table games barely three years after opening its
first “slots-only” casinos.
And some states that do not yet have gaming already want more of
it. Maryland is considering the addition of live table games to its slots-only
casinos, none of which have opened. Ohio is looking to revive the idea of video
lottery terminals at racetracks even before the first of its four full-service
casinos opens.
Obviously, the pace of expansion is not sustainable; eventually,
certain markets or jurisdictions will reach the saturation point.
The overarching theme in this budget-bridging-driven
gaming-expansion frenzy is revenue generation. Thus, the key question from
legislators seems to be some variation of “How fast can we turn on the slot
machines?” Indeed, it is a critical question as budget analysts try to forecast
the coming fiscal years.
I submit, however, that the more pressing question should be, “How
well can we regulate gaming?”
Rapid implementation of gaming operations and
quality regulation are not mutually exclusive, especially with the wealth of
templates available for guidance — if not outright duplication — from other
states with proven track records of solid regulation. Further, there are
hundreds of experienced, talented regulators across the country who are willing
to relocate for higher-paying positions.
Still, states want to do it their way — whether to comply with
their own laws (Kansas is the notable example; the state must be the owner of
the casinos) or because they truly believe they can do it better — or because,
in the words of Larry the Cable Guy, they just want to “git ’er
done”.
In many states, the legalization of gaming is a question
of when, not if. One particular state recognized this and began its regulatory
preparation efforts well in advance, and for that I applaud the Commonwealth of
Massachusetts. Attorney General Martha Coakley, recognizing the inevitable, and
without taking a position on the pending
gaming legislation, has told state
lawmakers that more stringent rules are needed to combat money laundering and
organized crime before they legalize
gaming. Coakley made it clear that stronger laws were needed in any event, but
that the specter of gaming makes legislative action all the more
necessary — and more urgent.
“Based on historical experience in other
states, it would be irresponsible to bring gaming facilities to Massachusetts
unless we have the proper regulatory framework and law enforcement structures
and tools already in place, even before some of the debate takes place,” she
testified before the Massachusetts Senate last July. “We are all familiar with
the extensive history of criminal prosecutions in other states — at the
municipal, state and federal level — of gaming facility operators, employees
and public officials alike.”
Coakley testified again this February, arguing that the state
needed stronger laws in preparation for gaming, notably to combat money
laundering and organized crime. “It is critical that we update our laws so that
we can effectively address the types of financial crimes and corruption that
are often associated with gaming,” she said.
We can disagree with her characterization of “often associated,”
but the point is that Coakley is being pro-active.
It is this type of forward-thinking that can
allow gaming to be legalized both expeditiously and with the utmost integrity.
Lloyd Levenson
ldlevenson@cooperlevenson.com
Lloyd Levenson is CEO and chairman of the Casino Law Department of the Atlantic City/Las Vegas law firm Cooper Levenson (www.cooperlevenson.com). He can be reached at (609) 344-3161.
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