ATTORNEY AT LAW: History lesson
November is election season, and casinos have been part of that tradition for more than 34 years. In 1974, when Gerald Ford was launching his “Whip Inflation Now” program and the nation was still reeling from the aftermath of Watergate, New Jersey voters were asked to approve a referendum to allow casinos in any community that wanted them. Only one did at the time, the down-on-its-luck Atlantic City.
That referendum was defeated by a 2-1 ratio. Voters did not trust casinos and felt that they could not be regulated. And they certainly did not want them in their backyard, so to speak.
Two years later, Atlantic City and its supporters came back for a second try, but this time the casinos would be limited to that one city. And, for good measure, all tax proceeds were dedicated to programs for seniors and disabled. It passed by a 2-1 margin. Why such a dramatic swing in two years?
You could claim that, this time, voters were swayed by the fact that casinos would be limited to Atlantic City. But I tend to side with Atlantic City historian Michael Pollock, managing director of Spectrum Gaming Group, who believes that other factors were also at play. It was a presidential election in 1976, and New Jersey – like other states – experienced higher turnout.
Over the years, New Jersey has not only set the model for other states, outside Nevada, to establish casinos, but has also set the model for states that try and try again. Florida had referendums for casinos in 1978 and 1986, and its Legislature only recently approved casinos. Ohio had proposals floating around in the 1980s, and so did Pennsylvania – decades before it finally legalized slots-only casinos.
A pattern has emerged over the intervening decades. Whenever there is a national recession or severe economic downturn, the number of states that legalize casinos begins to grow. Consider that riverboat casinos emerged following the recession in the early 1990s, and racinos began to be approved in large numbers a few years (and another recession) later.
This year, four casino-related referenda were on state ballots. Colorado voters approved a constitutional amendment to repeal law that limited bets to $5, and prevented 24-hour gambling, while allowing Central City, Black Hawk and Cripple Creek to add roulette and/or craps. The wager limit on any single bet was raised to $100.
Interestingly, the Colorado referendum was the only one of 10 proposed amendments on that state’s ballot to be approved by voters. Perhaps because it designated money for community colleges.
Maryland voters approved by wide margins a referendum to allow up to 15,000 video lottery terminals in potential casinos in Anne Arundel County, Cecil County, Worcester County, Allegany County and Baltimore City.
Missouri voters approved the repeal of a maximum loss limit of $500 for gambling and prohibited any future loss limits. The measure also raised the gambling tax 1 percent to 21 percent and restricted the number of casinos to those being constructed or already established.
Ohio voters rejected an amendment that would have established a casino near Wilmington and to distribute to all Ohio counties a casino tax. The amendment authorized one privately owned casino with a minimum initial $600 million investment, with a 30 percent tax.
It was no coincidence, Pollock would note, that the successful referenda came during a historic presidential election campaign in which three of the four states (Maryland being the only exception) were battlegrounds in the electoral college. It was also no coincidence that this historic election took place amid the most serious economic downturn in our lifetimes.
Ohio was clearly one exception, but if New Jersey – and Florida and Pennsylvania – offer historic lessons, expect another effort to be under way in the Buckeye State.