Gaming Insiders Concede Lack of Support on Some Ballot Initiatives

By Richard N. Velotta, Las Vegas Sun
5 October 2004

If voters approve every ballot initiative on gaming nationwide, supply company experts say they could be asked to provide as many as 175,000 new slot machines in years ahead.

Of those, about 30,000 slots could be headed to tribal casinos in California.

But experts discussing emerging domestic gaming markets in the United States on Monday conceded that some ballot initiatives don't appear to have the support to pass in next month's election, including two on the ballot in California.

"I don't think it's going anyplace at this point," Bill Bartolomay, director of new market development for WMS Gaming, said of California's Proposition 68, one of two Golden State initiatives that are being watched closely by Nevada casino operators.

Bartolomay was a panelist in a development and training institute presentation on slot machines for the opening day of the four-day Global Gaming Expo at the Las Vegas Convention Center.

The G2E convention and trade show kicks into high gear today as 25,000 people are expected to attend what has become the largest gaming industry convention in the world.

California's Proposition 68 would permit up to 30,000 slot machines at 16 existing race tracks and card rooms unless all Indian tribes with existing state compacts agree to new terms in their agreements -- including a 25 percent tax on slot machine revenue.

One of two things could happen if voters approve Proposition 68: Tribes with compacts could renegotiate the terms of their deals within 90 days of passage to incorporate the new tax; or, if tribes don't accept the revisions within 90 days, non-tribal race tracks and card rooms could install up to 30,000 slot machines.

Another California ballot measure, Proposition 70, sponsored by the Agua Caliente Band of Cahuilla Indians and opposed by California Gov. Arnold Schwarzenegger, requires the state to offer tribes renewable 99-year gaming compacts providing exclusive rights to Las Vegas-style gaming and an unlimited number of slot machines and types of games.

Tribes would continue to pay the existing tax rate of 8.8 percent in addition to payments negotiated under 1999 compacts.

Since 1999, 64 tribes have signed compacts with the state of California, paying a total of more than $100 million a year to support smaller tribes. Currently, there are 53 casinos in operation with more than 54,000 slot machines.

If both Propositions 68 and 70 are approved by voters, the one with more yes votes would take effect.

Panelists ran through a list of other state ballot initiatives, handicapping their chances of passage.

Bartolomay said a Florida ballot initiative may have gotten new life by the "hurricane factor," a viewpoint of some citizens that the state needs additional revenue to pay for relief to rebuild from the damage resulting from four hurricanes that devastated the state over a six-week period in August and September.

Florida's Amendment 4, sponsored by Floridians for a Level Playing Field, authorizes Miami-Dade and Broward counties to conduct their own votes on whether to authorize slot machines in existing, licensed pari-mutuel facilities, including thoroughbred and harness racing, greyhound racing and jai alai.

The measure enables the Florida Legislature to tax slot machine revenue to supplement public education funding statewide. Backers say passage of the measure could result in the installation of 17,000 slot machines.

Bartolomay gave the measure a 50-50 chance of passage, despite strong opposition from Florida Gov. Jeb Bush.

"I think it will be close at the end of the day," he said.

Panelist Rob Miller, vice president of business development at Bally Gaming, said he expects measures in Pennsylvania, New York and California to have the best chances of passage. Panelist Tim O'Leary, business development manager of Atronic Americas LLC, said a measure for casino gaming in Nebraska -- backed by two Las Vegas companies, Las Vegas Sands Inc. and Boyd Gaming Corp. -- is facing opposition from billionaire Warren Buffet, who has contributed money to defeat the measure.

Related Links
American Gambling
Global Gaming Expo (G2E) 2004

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