All In Favor, Say Aye!

[pineda]

-------------------------------------------------------------------------------------------

Should Texas gamble on slots?

Analysis of lottery shows those with least are likely to spend most

Tuesday, February 22, 2005

By DAVE MICHAELS / The Dallas Morning News

AUSTIN - As lawmakers consider whether to boost the state's income by approving slot machines, some fear that doing so will take money from those who can least afford to lose it.

An analysis of statewide lottery sales by The Dallas Morning News shows that the lottery's best customers live in areas where the household income is below the state average and where few people graduate from college. And a recent survey of 1,255 lottery players by Texas Tech University found that lower- and moderate-income people gamble the most on the games.

The House committee that writes tax bills will discuss various proposals today that would expand gambling in Texas. As they gain momentum, lawmakers are weighing who plays and how they're affected.

"Gambling is nothing more than a tax on the poor," said Rep. Charlie Howard, a Sugar Land Republican who opposes an expansion of gambling. "We are just taking more money out of their pockets."

Other lawmakers who reviewed The News' analysis and the Tech survey said the studies apply only to the lottery and do not predict who would play slot machines in Texas. The casino industry says its own studies, which show its customers have high incomes and college education, more accurately predict which Texans would gamble the most.

"What we see is that as income levels rise, so does casino participation," said David Strow, a spokesman for casino operator Harrah's, whose lobbyists are monitoring the legislative session.

Other lawmakers said the debate over who gambles is not crucial because no one is forced to wager. Rep. Kino Flores, a Mission Democrat who filed a bill Monday that could open the door to casinos, said taking a percentage of gambling revenues is preferable to raising obligatory tariffs, such as the sales tax.

"Do we give them an opportunity to spend $10 on a game of hope?" Mr. Flores said. "Or do we not give them a chance and just tax them?"

But The News' analysis indicated that for low- and moderate-income Texans, the effect is similar because they spend more on the lottery.

Lottery winners

People bought $3.5 billion worth of lottery tickets in fiscal 2004, of which $1 billion went to public schools. The News' analysis found that lower-income House districts registered higher sales than upper-income House districts.

In Texas' poorest state House districts, in which median household income is less than $30,000, lottery sales per eligible person came to $244 a year. In the wealthiest House districts, with median household incomes above $60,000, the average person spent $170 a year.

Statewide, the median household income is about $40,000.

People living in the poorest House districts also spent a higher percentage of income on lottery games. In one Houston district - in which 25 percent of people live in poverty - people spent 2.2 percent of their income on lottery games.

Rep. Garnet Coleman, a Houston Democrat, said he was not surprised that his inner-city district accounts for more lottery sales than any other.

"I stand in line behind them at the convenience store, and these are frequent players," said Mr. Coleman, who would support slots if that meant improvements in public education. "They play every Wednesday and every Saturday, and play scratch-off every day."

Texas Lottery Commission officials did not dispute The News' analysis, but they noted its limitations. People whose homes fall in one House district, for instance, may buy tickets in another. This would be most likely for people who commute to work or live in metro areas such as Houston, which has two dozen House districts.

Contradictory numbers

In the past, the 12-year-old lottery has relied not on sales data but on phone surveys to study the demographic profiles of its customers. In 2003, a survey by the University of Texas' Office of Survey Research found that "those with the lowest levels of education and income were the least likely to play the games of the Texas lottery."

This year, Texas Tech took over the survey and, also using phone interviews, produced findings that contradict UT's conclusions. Tech's researchers found that people with less education and less income spent more money on the lottery.

People without a high school diploma, for example, spent $173 a month on the lottery, while people with a college degree spent $49, the Tech survey found.

In a letter to Gov. Rick Perry last year, a former finance director of the lottery called the lottery a "regressive voluntary tax" and said slot machines would be worse.

"People who have the least amount of discretionary money are going to put a larger percentage of that toward video lottery," the ex-official, James Rinn, said in an interview.

In interviews, Lottery Commission officials did not explain the discrepancy between the past surveys and the latest one, though they said Tech researchers should have interviewed more people.

Some gambling proposals have called for the Lottery Commission to operate slot machines - the devices are technically called video lottery terminals - but officials declined to say whether slots would appeal to the same types of players as the lottery.

Experts say the odds of winning at slot machines are better than winning state lotteries. The odds of winning multistate lotteries such as Powerball are the worst, with odds around 1 in 54 million, said Tyler J. Jarvis, a math professor at Brigham Young University.

"Since there is no competition, people have to play [the lottery] with those kinds of odds," said Dr. Jarvis, who has written on the odds of gambling. "Casinos compete with the casino next door. If the payout is that bad, no one wants to play."

Lawmakers in some low-income districts, some of whom voted to create the lottery in 1991, say their constituents are already spending too much on games of chance. Rep. Senfronia Thompson, a Houston Democrat, said constituents in her district "cannot afford" to lose money on the lottery and suggested their losses would grow if slot machines became available.

"When we pass this video lottery ... I would not be surprised if the [gambling] numbers in my district don't triple," Ms. Thompson said.

John Hailu, whose Quick Shop grocery store on Forest Lane sold more scratch-off tickets than any other outlet in Texas last year, said players probably spend more money than they should on lottery games. He said his store sells about $70,000 worth of scratch-off tickets every week, earning the store $116,000 in commissions last year.

But he said his store attracts customers for a good reason - it sold a ticket in 1997 that won $18 million.

"$70,000 a week, it's a lot," Mr. Hailu said. "I have one customer who comes here three times a day."

Some lawmakers said that if slots are approved, they might attract players who can more easily afford to gamble than those playing the lottery.

Rep. Robby Cook, D-Eagle Lake, said that could mean a middle-class customer, the type who currently travels to Louisiana or Las Vegas to gamble.

"It is hard to say who will be the new gamblers," Mr. Cook said. "That conversation needs to be had."

But if the House takes a vote on slot machines, the Central Texas lawmaker said, his vote will come down to one thing: whether it raises money to improve schools.

"It might improve education programs out in the rural areas that we don't have because we can't afford," he said. "You simply want the benefits to outweigh any societal costs."

Staff writer Paula Lavigne contributed to this report.

E-mail dmichaels@dallasnews.com

HOW THE ANALYSIS WAS DONE

For this report, The Dallas Morning News examined lottery sales in 2004 from every retail location in Texas.

Using computer mapping software, the 16,450 retail outlets that sell tickets were divided within the state's 150 House districts. Lottery sales were totaled by House districts, then compared to demographic data for each district. That data came from the Texas Legislative Council.

One potential flaw, noted by the Texas Lottery Commission, is that some tickets are sold to people who live outside that House district. Lottery officials do not dispute the overall findings, though.

[tw2ntyse7en]

...

[pineda]

If you go to Texas Legislature and type in the words "video lottery" under "Bill Text Search", there are a ton of bills being considered during the 79th State Legislature to allow "video gaming". Never having lived in either Atlantic City or Las Vegas, (but visiting only), I can only wonder what this bodes for the future of Texans.

[tw2ntyse7en]

...

[MidtownCoog]

Not no, but hell no!

If anything, let the Indians do it, but that's where I draw the line.

[Trophy Property]

Well, look at what statewide legalized video poker did for Louisiana - not much. All it did was give diners & truck-stops a reason to add more neon to their signs and add more smoke-filled rooms & partitions to their establishments.

I think the lottery is enough here. That and full fledged gaming on indian reservations. Jeez - its the least the government can do for these people.

<{POST_SNAPBACK}>

I say we open one massive Casino. That is it. Maybe the Dome.

[Montrose1100]

Gambling only in Galveston.

[Hunter]

Pineda - I'll be honest, I didn't even read the article. I'm just posting my answer to the question:

"...No." 

<{POST_SNAPBACK}>

This is my answer as well!

"NO"

[kjb434]

When you resort to gambling as a source of revenue, it means you have run out of ideas.

Now raising taxes is a concept but no body wants it. Texas should look to just cut useless programs and do internal audits to clean out waste. The only issue is that no politician at the local, state, or national level has the balls to do this.

I think the closest thing to this is what Arnold is doing in California. It ain't easy to cut a program, but is has to be done.

Again, gambling is a last resort to bring in revenue.

Some state are lucky with this: Nevada, Mississippi, New Jersy, and even Louisiana.

The concept works best when the people in the casinos are not from the state. That way you are getting revenue from a source that is not your own people.

[Parrothead]

After seeing what casinos did to Biloxi.....well, no thanks. I mean, Fertitta has already screwed Kemah up, and I am scared to death what he is planning for Galveston (even though Galveston needs help, and I love it there)--but could you imagine if gambling were legal, what he would, what he COULD do? OH GAWD, NO!

[LTAWACS]

this is a recipe for disaster.

[pineda]

--------------------------------------------------------------------------------

HoustonChronicle.com -- http://www.HoustonChronicle.com | Section: Viewpoints, Outlook

March 23, 2005, 10:05PM

Why I'm finally placing my bet on video gambling

It's our most viable funding option, Texas lawmaker says

By STATE REP. SYLVESTER TURNER

The state of Texas and its citizens are in serious trouble. Our education system has been declared unconstitutional and is severely underfunded. Many of our children have no health care protection. Our senior citizens go begging for assistance. Our criminal justice system is operating at maximum capacity.

Thousands of state employees have been laid off over the past two years. Most of those layoffs occurred within the most-needed social programs, eliminating 2,722 positions in health and human services, 1,267 in public safety/criminal justice and 907 in education agencies.

That is why I have proposed a bill and a constitutional amendment allowing video lottery terminals in Texas.

I have never been an enthusiastic supporter of gambling in my many years in the Texas Legislature. But I can no longer stand by and watch people suffer when we have a viable way to raise money.

As my pastor told me, it is a great sin for a state leader to allow human suffering and need because no one wants to pay for the help people need.

And we are in great need. Consider some of the cuts that have been made in our state budget over the past two years.

Funding reductions occurred in:

[pineda]

---------------------------------------------------------------------------------

HOME: FEBRUARY 18, 2005: NEWS: HANDICAPPING SLOTS FOR TOTS

Handicapping Slots for Tots

The pols and the lobby shuffle the deck on gambling 'for education'

BY AMY SMITH

Critics accuse state Rep. Sylvester Turner, D- Houston, of providing cover for Republicans on the gambling bill.

No amount of anti-gambling railing from state GOP chairwoman Tina Benkiser can convince Rep. Garnet Coleman that Republicans aren't driving the gambling issue this session.

In fact, the Houston Democrat is just cynical enough to believe that Benkiser is making such a big fuss over the slot machine bill filed last week to dispel suspicions that the bill's author, Rep. Sylvester Turner, D-Houston, is actually working in cahoots with the GOP leadership. Benkiser histrionically lambasted Turner's bill, calling it "a corrupt idea from a Democrat lawmaker promising free money but delivering only suffering and despair to Texas families."

Coleman is unimpressed by Benkiser's outrage. "I think [benkiser's statement] was orchestrated to give Sylvester Turner and the Republicans cover," he said.

Coleman isn't alone. With Republicans in charge, gambling forces are inclined to place their lobbying bets on GOP lawmakers. Gov. Rick Perry, for prominent example, received more than half a million dollars from gambling-related interests between 2000 and 2004, according to Texans for Public Justice, a watchdog group that tracks campaign finance filings. In turn, Perry floated a slot machine proposal as a component to his plan to fix the school-funding crisis during last spring's special session. But the gambling idea foundered on the rocks of moral and financial opposition, even before his overall education plan failed. Perry has since tried to distance himself from the "G" word as he prepares for a re-election campaign targeting the same conservative Christian base that helped kill his slot machine proposal.

In a similar vein, a prevailing sentiment holds that Republicans have put their money on Turner, a Democrat, to move the gambling bill forward. "They had to find a Democrat," said Coleman, "and they found one of their favorite Democrats in Sylvester Turner." Since filing HB 897, Turner has spent more time denying that he acted on behalf of Republican House Speaker Tom Craddick than he has defending the bill itself. Since being appointed speaker pro tem last session (reappointed this year), Turner has become a Craddick ally on many issues, not exactly endearing himself to fellow Democrats. Turner did not join the Ardmore exile in 2003, and he has tried to walk a tightrope between the GOP leadership and his otherwise mainstream Democratic agenda. (And it's fair to say that many other Dems see gambling revenues as one potential source of education funding.)

Turner's proposal would allow the installation of so-called Video Lottery Terminals, or VLTs, at horse and greyhound racetracks and Indian reservations, and would allow for one VLT center in each of nine regions across the state, including Central Texas. The VLTs would be expected to generate an estimated $1.2 billion for state education funding (an estimate subject to much dispute), and would thereby free additional state money for the social service needs of children and seniors, Turner said. Turner told reporters that he's not pro-gambling, but that he sought counsel from his pastor, who advised him to do what's best for those in need.

Other supporters have fewer scruples. A well-funded lobby headed by former Perry Chief of Staff Mike Toomey is hard at work pushing the slots. According to an online report in a trade publication, Thoroughbred Times, Toomey provided a legislative briefing in late January to horse owners, breeders, and trainers who support the slot machine measure. "This [legislation] gives them a billion dollars for schools and to lower property taxes," Toomey told the industry group of the bill that was then three weeks away from filing. "Just give the people of Texas the right to vote on this. The only way we win is if there's grassroots pressure from you."

But not all gambling interests respond favorably to Turner's bill. Since the legislation would still exclude the Las Vegas-style casino forces angling to break into the Texas market, big casino operators like Harrah's, Boyd, and R.D. Hubbard (represented by an equally formidable army of Capitol lobbyists) are just as opposed to the VLT bill as is the Baptist General Convention. If they get their way, Turner's bill would undergo a massive rewrite or be replaced entirely, possibly by one filed by South Texas Rep. Kino Flores, who has been trying to bring casinos to the Valley for years. Turner's bill is also drawing quiet but stiff opposition from the state of Louisiana (with its own lobbying casino cabal), which stands to lose millions from the droves of Texans who go east to play the slots.

Perhaps the best argument against Turner's bill can be found in a recent study by the Texas Lottery Commission, which confirms that the people who can least afford to play are the ones who spend the greatest share of their income on lottery tickets. State Rep. Eddie Rodriguez, D-Austin, is all too familiar with this pattern, since his district of east and southeast Austin and Travis Co. has the highest lottery activity in the Austin area. That's why Rodriguez opposed Perry's gambling bill in the special session and stands against any similar measure to come forward this session

[Parrothead]

Did ol' Sylvester budget for the gambling addiction programs the state will need? Ugh!!