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Gambling Developments in the States, 2008

Thirty years after commercial casinos expanded beyond Nevada and began to operate in New Jersey, states continue to look to gambling for new sources of revenue and economic development.  A variety of proposals to extend, regulate, and curtail gambling have been introduced this year in states from every region of the country.

The following table provides brief descriptions of selected proposals and their status.  Information on revenue performance in lotteries and state and Indian gambling is also included when available. 

This table was last updated December 18, 2008.

State/Jurisdiction

Gambling Developments

Revenue Trends

Alabama

The attorney general and the Humane Society have cracked down on dog fighting and related gambling.

 

Alaska

Failed: Ballot number 1, that would have created a gambling commission with power to introduce casino gambling, was defeated in the August 27, 2008 election.

 

Arizona

Failed: The mayor of Phoenix decided against installing slots in the Sky Harbor International airport.

The Navajo Nation voted against a smoking ban for future casinos.

Second quarter Indian gambling revenues were down from same period last year.

FY 2008 gambling revenues from Indian casinos up 1.9 percent from last fiscal year.  (The increase from the previous fiscal year had been 8.6 percent)

FY 2008 lottery games sales were up 2.3 percent from prior fiscal year.

Horse and dog track wagers in FY 2008 down 5 percent from prior fiscal year.

Arkansas

Enacted: Voters approved a November ballot question that allows for the creation of a state lottery.

Proposed: Lawmakers are considering a repeal of the 1 cent tax on bingo cards for charitable gambling authorized by voters in 2006.

August 2008 revenue from electronic games of skill at pari-mutuel tracks (introduced in November 2006) was up from August 2007.

California

The state racing commission

Proposed: There are discussions in the state on privatizing the lottery.

Failed: A legislative proposal introduced to reduce the maximum punishment for office pool sports betting was vetoed by the governor.  The bill would have changed mandated a maximum punishment of a $250 fine. The current maximum punishment is up to a year in prison and a $5,000 fine.

There is a legal dispute between state and Indian tribes regarding imposing security standards on Indian Casinos.

Lottery ticket sales fell by 10 percent during the first four months of FY 2009.

Lottery revenue in FY 2008 fell $260 million (or 8 percent) from the previous fiscal year.  That was the second consecutive year of falling lottery revenue.

Casino City's Indian Gaming Industry Report finds that California is first in Indian gambling revenue in 2007.

Colorado

Enacted: Voters approved amendment 50, included on the November ballot.  The amendment allows for 24 hour operation of casinos, an increase in the maximum bet limit from $5 to $100, and freezes the state casino tax rate barring a statewide vote.

Proposed: A report by the Office of the State Auditor recommended that prize payouts and retail commissions be reduced to increase state revenue shares.

 

Connecticut

 

November revenue from Foxwoods and Mohegan Sun casinos was down from the same time last year.

Casino City's Indian Gaming Industry Report finds Connecticut second in Indian gambling revenue for 2007.

Slot revenue in July at both Mohegan Sun and Foxwoods was down from same period last year.

The Mohegan Sun announced a postponement of planned major expansions to the casino.

Delaware

Enacted: Tracks have been allowed to operate 24 hours a day.

Enacted: The Delaware lottery will add multiplayer automated  roulette tables at their casinos.

 

Florida

Racetrack casino owners are petitioning the Florida legislature for tax breaks on equipment purchases.

Enacted: Lottery officials have announced that state will join power ball beginning January, 2009.  (Florida is the last lottery state without multi-state games.)

Failed: The Florida Supreme Courts voided a gambling pact negotiated between Governor Crist and Seminole Indian Tribe allowing slots and table games at Indian casinos.

Lottery sales in July 2008 were below sales in July 2007.  The lottery's revenue performance caused lawmakers to tap other revenue sources to make up for shortfall in education funding caused by reduced lottery sales.

Georgia

 

Lottery sales are up from last fiscal year.

Hawaii

No legalized gambling in the state

Illinois

Proposed: The state is considering leasing their lottery.  The proposal, Senate Bill 2595, was passed in the house on September 10, 2008. 

The gambling commission accepted applications for the state's 10th casino license in July.  Their decision on proposed bids is expected at the end of 2008.

October 2008 casino gambling revenue was down 25 percent from same time last year.

FY 2008 revenue from gambling related taxes was down 6.5 percent from the prior fiscal year.  While lottery revenue was up, riverboat casino tax revenue dropped nearly 18 percent from FY 2007.

Indiana

Proposed: There has been a continued push for privatizing the state's lottery.

Enacted: Bars and other establishments are now allowed to operate pull tabs and other low stakes games.

State casino tax revenue was down in July from the previous month.

Iowa

Proposed: There have been discussions about leasing the state's lottery.

Enacted: The state lottery introduced a game to fund the veterans trust fund program.

The gambling commission has stopped accepting applications for new casino licenses and will study further expansion of gambling. 

There has been a legal controversy with Nebraska over Ponca Indian tribe's attempt to build a casino in Iowa.

The lottery games for veterans' programs introduced this year contributed nearly $1 million from its July to September sales.

Total state lottery sales are up while profits are down from the last fiscal year.

Kansas

Gaming officials intend to open the bidding process for development of the authorized state casino again early next year.

Harrah's announced that their inability to secure financing has forced them to cancel plans for development of the state's casino.

The state courts upheld the legality of a state owned casino plan.

Harrah's wins bid to develop and manage state owned casino.

 

Kentucky

Enacted: A court ruling in response to a suit pushed by the states seized 141 domain names of popular illegal gambling websites operating in Kentucky.

Failed: A casino gambling proposal was not passed by the legislature.

There are plans to introduce a bill allowing video gambling at tracks in 2009.

Lottery revenue grew by 3.6 percent in the first quarter of FY 2009.

A report by the University of Kentucky finds bingo revenue  unaffected by the smoking ban that began in 2004.

Louisiana

Enacted: Legislation banning cockfighting signed in 2007 has become effective.  (Louisiana was the last state to ban cockfighting.)

 

Maine

Failed: Voters rejected a ballot question that would have allowed for a commercial casino in the state.

Lottery sales were below estimates in July and August.

Maryland

Enacted: Voters approved a November ballot question to allow up to 15,000 slots at five locations in the state.

A county court had ruled that language in the proposal must be changed to clarify slot revenue will be primarily, not solely, used to fund education.

Enacted: Baltimore officials authorized the purchase of land in the city for development of the recently authorized casino.

 

Massachusetts

Failed: The Legislature rejected a casino proposal in March.  There are plans to reintroduce the issue next year.

Enacted: Voters approved a November ballot question to outlaw dog racing.

Proposed: Slot machines at racetracks.

The state treasurer has projected a $75 million (or 1.5 percent) decline in lottery sales this year.

Michigan

Proposed: House Bill 6465, introduced in September, would allow for racinos in the state.

The state government and Indian tribes reached two revenue sharing agreements on March 21, and October 20.

The Greektown casino declared bankruptcy on May 30, 2008.

November revenue from all three Detroit casinos was down from last year.

Mississippi

 

The Mississippi gambling sector is reportedly faring better in 2008 than industry trends.

Missouri

Enacted: Voters approved a November ballot question that will freeze future casino construction, increase casino tax, repeal loss limit, and direct revenue towards education.

September casino revenues in St. Louis down 4 percent from same period last year.

Casino revenues are up from the last fiscal year.

Montana

Enacted: Fantasy football-based lottery game are to be offered in the state with plans to direct revenue towards reopening shuttered race tracks.

Gambling revenue is up from the last fiscal year in counties benefiting from oil boom and down in others.

Nebraska

There has been a legal controversy with Iowa over the Ponca Indian tribe in Nebraska attempting to build a casino in Iowa.

 

Nevada

Proposed: Lowering legal gambling age from 21 to 18 to increase revenue during economic downturn.  Legislative leaders have expressed their opposition to the idea.

October gambling revenues were down 22.3 percent from the same time last year—the largest monthly drop in state history.  Gambling revenues have declined for 10 consecutive months.

Gambling revenue was down 2 percent from last fiscal year.

New Hampshire

Enacted: The legislature added games of chance and raised the limit of single wager.

Enacted: Legislation was passed to increase regulation of charitable gambling.

Enacted: Legislation was passed to increase wager limits and to tax charitable gambling

Lottery sales are down from last fiscal year.

New Jersey

Enacted: Legislation was passed enabling casinos to continue operations during government shutdowns.

Enacted: The city council in Atlantic City agreed to suspend the ban on smoking in casinos.

Casinos' second quarter profits are down—this was the third consecutive quarterly loss.

Lottery sales are up from last fiscal year despite much of the state's economy slowing down.

New Mexico

The last gambling license was approved for construction of a racino in Raton, New Mexico.

Lottery revenues are up from the last fiscal year.

New York

Proposed: Plans to privatize lottery are being considered.

Enacted: The state extended the sunset date for specific race tracks' video lottery terminal (VLT) gambling program and added capital spending for VLT-related upgrades at certain tracks.

 

North Carolina

Enacted: The state banned internet based video gambling machines that had filled a void created after the ban on video poker in 2006.

The state's lottery director projects ticket sales in FY 10 will be down $16 million (or 1.3 percent) from sales in the current fiscal year.

The committee reviewing state lottery raises concerns that lottery revenue may be supplanting  rather than increasing funds for education.

Ohio

Failed: Voters rejected a November ballot question that would have allowed a single privately owned  casino in the state.

Enacted: The lottery began Keno games in August, 2008.

Revenue from the new Keno games is behind estimates.

Oklahoma

 

Casino City's Indian Gaming Industry Report finds that Oklahoma was third in Indian gambling revenue in 2007.

Pennsylvania

Proposed: A legislative proposal is being considered that would ban gaming control board lawyers from working at casinos for one year after having left employment with the board.

The state's smoke free workplace law that went into effect September 11, 2008 exempts portions of casino floors from the smoking ban.

 

Rhode Island

Enacted: The legislature overrides the governor's veto of legislation that allows slot parlors to extend operating hours despite host community's opposition.  The excess revenue is to fund education.  The legislation will sunset in June 2009

Keno and powerball sales reported to be down from same period last year in September while instant win sales up 6.8 percent in first quarter of FY 2009.

South Carolina

Individuals arrested for playing poker have challenged South Carolina gambling laws as unconstitutional and unenforceable.

Lottery sales are up from last fiscal year.

South Dakota

The attorney general rules against a city ordinance in Sioux Falls banning new businesses with video lottery from locating near schools, parks, and existing video lottery distributors.

Casino City's Indian Gaming Industry Report says South Dakota Indian casino revenues down 3 percent from last year.  Nationally, Indian gambling revenues were reported to be up 5 percent according to Casino City.

Texas

Proposed: There have been discussions of privatizing state lottery. New proposals along these lines may be introduced in the 2009 session.

Total lottery sales are down 3 percent from last fiscal year.

Utah

No legalized gambling in the state

Vermont

Proposed: The governor has backed a proposal that would privatize the state's lottery.

 

West Virginia

Proposed: A proposed state lottery commission rule would require video lottery locations to be handicapped accessible as they provide a "state service."

The Kanawha-Charleston county has banned smoking in gambling establishments which opponents say may affect profits.  There are plans to challenge the ban as local government overstepping their authority to affect "taxation."

A fiscal 2007 annual report from Problem Gamblers Help Network of West Virginia recorded more problem gambling calls related to video lottery in bars and clubs than to gambling at racinos.

Lottery revenue in September was down 10.5 percent from August.  Revenue was also down from the same time last year.

Wisconsin

 

Projections for FY 2009 lottery sales have been reduced by 5 percent.

FY 2008 lottery sales were up from the last fiscal year.

Tribal casino revenue is up 7.3 percent from last year

Federal Government

A recent opinion from the Department of Justice holds that states can not privatize lotteries.  U.S. law allowing state lotteries "requires that the State exercise actual control over all significant business decisions made by the lottery enterprise."  The memorandum is available online at http://www.usdoj.gov/olc/2008/state-conducted-lotteries101608.pdf

The Treasury Department and the Federal Reserve have begun to implement rules to curb financial transactions from unauthorized online gambling.  State gambling laws will be the base for determining the legality of specific gambling instances online (lottery, horse racing, etc. are authorized in some states and operate through online transactions).

 

Source: Various media and state government reports, 2008

Posted December 2008.
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