News

Recap of Gambling Commission’s First Meeting in Atlantic City

The National Gambling Impact Study Commission met in Atlantic City on January 21 and 22, in the first of several site visits the commission will make this year to learn more about the impact of gambling in America.
In the New Jersey casino mecca, the commission heard a largely positive story about how gambling has brought jobs and economic development to Atlantic City. U.S. Senator Robert Torricelli summed up the views of many New Jersey politicians and officials who testified before the commission when he said the casino industry has been “extraordinarily successful” in revitalizing Atlantic City.
But some other perspectives were also heard. A panel disucussion on problem gambling and its treatment raised the issue of how much it costs society for each problem gambler. Researchers reported that pathalogical gambling is growing in the U.S., though not quite as fast as the growth of new legalized gambling. And reports also indicated that problem gambling is a particular big issue for high school and college students.
The commission also heard about recent studies linking casino gambling in Atlantic City to increased rates of suicide and personal bankruptcy. Some of this testimony came from Stephen J. Simurda, associate director of the United States Gambling Research Institute, who spoke during a panel on social impacts of gambling.
In addition, Simurda reported to the commission on the findings of the Institute’s study of Presbyterian Churches in the Atlantic City area and their members’ attitudes toward the casino industry. These findings included significant ambivalence over the idea of expanding casino gambling in Atlantic City, as is currently planned. For more on the results of this study, see the research section of this site.
The commission will next meet on March 16 and 17 in New England, probably in Boston.

Reno Asks Independent Counsel to Investigate Babbitt

Attorney General Janet Reno has asked for an independent counsel to investigate whether Interior Secretary Bruce Babbitt acted improperly in denying a casino license to three Chippewa Indian tribes in Wisconsin in 1995. At issue is whether Babbitt’s decision was unduly influenced by the fact that other tribes that opposed the proposal had donated hundreds of thousands of dollars to Democrats.
In asking for the independent counsel on Feb. 11, Reno specifically instructed that the investigation should look into whether Babbitt lied to Congress, and whether the decision to reject the casino license was “criminally corrupted.” For his part, Babbitt said on Feb. 12 that he felt “put upon” by the attorney general’s decision and noted that it comes after three other investigations (one by the Justice Dept. and two by Congressional committees) had failed to yield evidence of illegal actions.
New York Times 2-12-98, 2-13-98

Gtech Head Steps Down After Losing Libel Ruling; Bribe Alleged in London

It’s been a bad month for Gtech Holdings Corp. of Rhode Island, the world’s largest supplier of computerized lottery tickets. First, the company’s chairman, Guy Snowden, lost a high-profile libel case against British entrepreneur Richard Branson, who had made public statements that Snowden had tried to bribe him to keep Branson from competing for a lucrative contract to run the British lottery. Snowden called Branson a liar for making the comments, and Branson sued for libel. On Feb. 2, after less than three hours of deliberations, the British jurors found for Branson.
The next day, Snowden resigned from Gtech, and the company’s stock hit a 52-week low. Britain’s top lottery officials also resigned. Gtech supplies and operates lottery systems in 29 states in the U.S.
Boston Globe 2-3-98
New York Times 2-4-98

Tribe Has Big Plans for New Internet Lottery

The Coeur d’Alene tribe in Idaho is planning major marketing efforts this spring for its online lottery games, including a new weekly number game with a guaranteed $1 million prize. The tribe, which began operating what it calls US Lottery last spring, says it runs “the first ever parimutuel lottery to be accessible both by telephone and Internet.”
It started with bingo and scratch lottery tickets on the Internet and in January added the weekly, six-number game with the help of its corporate partner, UniStar Entertainment Inc. Some states, including Missouri and Wisconsin, have sued to block US Lottery, claiming the operation violates state laws or Indian gambling laws that require that the games be located on tribal lands. Action on pending legislation to ban Internet gambling, sponsored by Sen. Jon Kyl of Arizona, could also effect the legality of US Lottery.
Washington Post 2-14-98

Industry Consolidation Expected

The $1.2 billion planned acquisition of Showboat Inc. by Harrah’s Entertainment could set off a wave of industry mergers and buyouts, analysts say. “This is bottom-feeding time in this industry,” says Danny Davila of Rodman & Renshaw Inc.

Intl. Gaming & Wagering Business 2-98

Jackpot in Big Apple ?

Legalizing casinos throughout New York City could generate $2.63 billion in revenue, making the city the third largest gambling market in the country, according to a gambling industry analyst.
The analyst, Jason Ader of Bear, Stearns & Co. Inc., says another plan to put a casino on Governor’s Island, former home to a U.S. Coast Guard base, could produce $340 million in annual revenue.
Meanwhile, Michael “Mickey” Brown, former chief executive at Foxwoods casino in Ledyard, Ct., went on record as saying he’d like to be part of any pan for a casino on Governor’s Island. Brown now runs a company called Manhattan Cruises that is scheduled to begin overnight gambling cruises from New York on February 1.
Las Vegas Review Journal 1-26-98
Intl. Gaming & Wagering Business 2-98