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Gambling and Lottery Measures on the 2004 Ballot

November 17, 2004

Background

Gambling and lotteries are a perennial issue on state ballots, and this year is particularly active for gaming.  As states struggle with budget deficits, they often look to lotteries and sometimes gambling revenues to pay for programs like health care and education.  Casino interests are also active in the issue, always looking for new states to expand their operations into.

What’s on the ballot this year?

This year, there are 13 gambling measures on the ballot in six states.  As these numbers indicate, there is more than one gambling measure on the ballot in some states, and the battle is becoming heated.  California voters face competing measures—one would favor tribal casinos while the other would favor non-tribal casinos—and so do Nebraska voters, where a group of proposals come from casino interests and a competing measure comes from the legislature.  Here’s a brief run-down of the gaming measures on the 2004 ballot:

Source:  National Conference of State Legislatures, October 2004

How does this compare to previous years?

• In 2002, there were seven gambling measures on the ballot in four states.  Arizona voters agreed to extend tribal gaming compacts and the state lottery, and Tennessee voters authorized a new lottery and directed its proceeds to funding higher education.  View a list of the 2002 gambling measures on the ballot.
• In 2000, there were also seven gambling measures on the ballot in four states.  Arkansas voters turned down a state lottery, while Colorado voters opted into the multi-state PowerBall lottery.

State-by-State Summaries of 2004 Gaming Measures

California

California voters will face dueling gaming measures on the ballot this November 2.  Proposition 68 seeks to implement non-tribal gaming.  It would allow non-tribal gaming if tribes refuse to pay 25% of their revenues to the state, to comply with state laws on environmental regulation, political campaign contributions, and gambling regulation, and accept state court jurisdiction.  Proponents of the measure halted their campaign in mid-October, and the measure is not expected to pass. 

Proposition 70 favors the tribal casinos.  It would allow unlimited gaming on tribal lands, and in exchange, the tribes would agree to pay the state’s corporate income tax (currently 8.84%).  State fiscal analysis shows that the revenues the state would receive under this measure would likely be lower than the payments they receive under the current agreement.  It also specifies that tribes wouldn’t have to pay the income tax if non-tribal gaming were permitted in the future.

Florida

Florida’s Amendment 4 would allow Miami-Dade and Broward county voters to have their say on allowing slot machines at race tracks and jai alai facilities.  Slot machine revenues would help fund education.  The measure is backed by casino interests and education groups in the state.

Michigan

Proposal 1 in Michigan would require voter approval of any new gambling enterprises proposed after January 1, 2004.  It excepts tribal gaming and three non-tribal casinos in Detroit.  If the measure passes, both statewide and local voter approval would be required before new casinos could be built.

Nebraska

Gambling has turned into a huge issue in Nebraska this year.  Gambling supporters have qualified a package of four initiatives to the ballot that would allow casinos and other gambling facilities in the state, while the Legislature placed a more conservative measure on the ballot, allowing just two casinos statewide.  The initiatives are as follows:  Initiative 417 amends the state constitution to allow citizens to enact laws via the initiative to authorize gambling.  It has to pass for any of the other gambling initiatives to take effect.  Initiative 419 specifies and allocates a tax on gaming.  The tax would be 36% of the first $15 million, and 20% of any revenues thereafter.  25% of the proceeds would go to the local community where the casino is located, and the remaining amount would go into the state general fund.  Initiative 420 permits local communities to authorize gambling.  A fourth initiative, while not directly related to gaming, was proposed by the same groups—Initiative 418 would require a two-thirds vote of the Legislature to amend or repeal any law passed by initiative.  Its intent is to prevent the Legislature from amending or repealing any new gaming initiatives passed this year.

The Legislature’s proposal, Amendment 3, would allow just two casinos in the state, and require the Legislature to decide how the casinos should be regulated and taxed.  Another legislature referendum, Amendment 4, specifies how the state’s lottery proceeds must be used.  It would dedicate the first $500,000 of revenue after prizes and operating expenses have been paid to the Compulsive Gamblers Assistance Fund.  Of the remaining amount, 44.5% would go to the Nebraska Environmental Trust Fund, 44.5% would be used for education, 10% would be spent on the Nebraska State Fair, and 1% would go to the Compulsive Gamblers Assistance Fund.

Oklahoma

Oklahoma voters will face three gaming measures on the ballot this fall, all referred by the Legislature.  Question 705 would create a state lottery, and direct the net proceeds to education.  Question 706 is a companion to 705, and creates an Oklahoma Education Lottery Trust Fund to receive those proceeds.  Question 712 would expand tribal gaming, allowing tribes to use new types of gaming machines and offer some card games.  It would also allow three racetracks to offer electronic gaming if at least four tribes enter into the new compact.

Washington

Washington’s gaming measure has an unusual twist.  Initiative 892 was sponsored by a well-known anti-tax activist.  It would allow non-tribal gaming establishments to install slot machines, and would allocate 35% of the net winnings to the state.  1% of that amount would be used to address problem gambling, and the remainder would be used to reduce the state property tax.

For More Information

For more information on initiative and referendum, contact Jennie Drage Bowser in NCSL’s Denver office, or visit our I&R 2004 web site.

For more information on gambling and lotteries, visit NCSL’s Economic Development web site.