THE BACK PAGE: Privately public
As always, the gaming industry has a lot to tell us about the state of things political and otherwise. Take Alabama and New York and their Republican and Democratic governors, for instance. Both have been wrestling with gaming-related matters for many months, and the cigar keeps exploding in their faces.
In the case of Alabama, Gov. Robert Riley’s Task Force on Illegal Gambling has unearthed plenty of mud. Problem is, a good bit of it has landed on the task force itself. Most famously, Milton McGregor, who operates a 6.000-machine electronic bingo hall called VictoryLand, paid a detective to trail the leader of the task force, who was found in a casino in Mississippi last January, where he was taped winning a $2,300 jackpot. This earned the aforementioned task force leader a forced resignation. His replacement was alleged to have taken up to $1 million in PAC money from gambling interests in a failed run for the state Attorney General’s Office, charges which he denounced but which have been made before, most notably against the governor himself.
The rise in tensions almost certainly helped lead the state last month to raid and close down VictoryLand and two other gambling venues, Country Crossing and White Hall Entertainment Center. The fate of these establishments and of electronic bingo generally in Alabama remains very much up in the air. The current attorney general has opposed the task force as well as the raids, and the state Democratic Party is in favor of legalizing, taxing and regulating electronic bingo. Also, after the raids last month, the Alabama Christian Coalition changed its tune on Riley’s crusade, urging the state and its gambling operators to “resolve their differences,” a change of heart which the Governor’s Office attributed to pro-gambling PAC money finding its way to the Christian Coalition. Recent polling suggests that two constitutional amendments providing for an up or down vote on electronic bingo will fare well for the industry when voters go to the polls on November 2. But Alabamans turned thumbs down on a lottery back in 1999 after months of similarly favorable polling, so, of course, nothing is guaranteed.
Speaking of which, New York’s longstanding quest to add gaming terminals to Aqueduct Race Track in Queens is now the subject of a federal investigation. Gov. David Paterson’s selection of Aqueduct Entertainment Group drew immediate complaints from the losing firms, the state Republican Party and even Democratic Speaker Sheldon Silver, who was involved in the selection process. Silver claims the governor unilaterally made four “non-negotiable” conditions he outlined for AEG’s selection prior to the announcement part of a memorandum of understanding to be negotiated after the selection, including an up-front fee of $300 million to be paid by March 31 and employee licensing requirements.
Of course, it didn’t help matters that Paterson, who is in a desperate fight to retain his governorship in an election year, met with a key investor of AEG, the Rev. Floyd Flake, a political heavyweight in Queens, who had previously voiced the possibility of his support for Paterson’s prospective primary opponent, Andrew Cuomo, two days after his selection of AEG was announced.
As an editorialist at the New York Daily News put it: “The governor said he waited until the deal was done to avoid the appearance of a quid pro quo. So call it a quo pro quid.”
Gaming industry opponents could point to Alabama and New York as examples of the inescapable taint that our industry occasionally (and they would say always) brings with it. But that would be an exceedingly narrow reading of our times. Look at Greece, where the government worked with an investment bank to enter into derivative deals that both legally circumvented the European Union’s deficit rules and masked the true extent of its obligations until years after the fact. Look at the United States Supreme Court, which recently ruled that government may not regulate spending by corporations in political campaigns. The public and private sectors are increasingly integrated, not discrete, and the proximity of money to politics is growing, not fading. And politics is a mere sideshow to the main event of politics and business.