Gambling Questions Settled By Midterm Elections

We take a look at the results of the midterm elections and some of the ballot questions about gambling that various states posed.

Having gerrymandered, misrepresented and fear-mongered their way to an electoral victory in the low-turnout mid-terms the Republican party is now busy working out how to present the President with a plethora of bills he can’t possibly sign to make him look like the obstruction they’ve been for the last six years. Thankfully the American public, when they bother to vote, can see through this, but for the time being we have to put up with the right-wing flapping on as if they haven’t just corrupted US democracy that little bit more.

States Vote For And Against Gambling

• California and Colorado reject proposals

• S. Dakota, Tennessee & Kansas accept lotteries

• Massachusetts Allows Wynn to go ahead

Of course the big red/blue battle wasn’t the only question on the ballot this November with everything from legalization of marijuana to the imposition of a sales tax on public transportation making an appearance across the 52 states. However whilst most of the headlines will be about the kicking the Democrats received, possibly because of the voting suppression laws brought in by Republican states to limit the number of women, young people and ethnic minorities who can actually vote, we should probably take a look at the gambling news made on the night.

In total eight states voted on various gambling issues across America, with some just marking an expansion in pre-existing businesses to others attempting to introduce gambling at all. Some of these votes were a bit of a foregone conclusion, however some results surprised pundits across the industry. Their surprise is not so much at who won or lost in their attempts to further gambling, but that anyone should be trying at all when the market, per se, is already pretty close to a saturation point.

This is especially true of the northeastern US where adjoining states have one by one fallen for the bright lights and excited noises of casinos and the tax revenues thereof. However, with so many states having now introduced casino gambling in one form or another catchment areas have shrunk, competition is way up and revenues? Well they just didn’t quite reach the dizzying heights projected by enthusiastic state governments, the dream just didn’t quite come true.

The Madness Of Market Saturation

This almost ridiculous level of competition for a relatively stagnant market volume has led to some casino closures, most notably those in Atlantic City, and others already reporting a drop in revenues as gamblers opt for more local establishments. As ever more casinos are added to the region the revenues per location is only ever likely to fall, and this presents states with a problem, as Govenor Chris Christie has already discovered, the razzmatazz of introduction can very quickly turn into the embarrassment of failure.

Whilst Kansas, South Carolina and Tennessee did no more than receive widespread support for their wish to introduce raffles or lotteries by non-profit organizations, other states attempted to go further with very mixed results. Perhaps the most mixed result coming in Rhode Island where statewide there was support for the addition of table games to the Racino in Newport, an entirely laudable sentiment… but where voters who actually live in Newport rejected the plan out of hand making the statewide vote redundant.

South Dakota decided to allow existing casinos in the “Old West Town Of Deadwood City” in the Blackhills close to the Wyoming border, to provide both Roulette and craps, amongst others, to the numerous visitors who enjoy that sort of ambiance, in hopes it will boost tourism from surrounding states, a common theme in the expansion of US gambling laws in any state. The degree to which this is a pipe dream remains to be seen, but certainly it is unlikely to anything to harm the numbers of visitors in the coming years.

Voters in Massachusetts decided to ratify the plan already agreed by the state legislature to set up three full-service casinos within the state, including Steve Wynn’s development just outside Boston. With so many from the state already gambling at Indian casinos in Connecticut it was argued ridiculous not to take advantage of this market and keep some of the revenue from this activity inside Massachusetts. This was, of course, precisely the same argument made in Rhode Island’s pointless vote on the Racino table games, retaining revenue bleeding out into Connecticut and indeed Massachusetts.

Go West, But Not To Gamble

Whilst the northeastern gambling market slowly eats itself alive adding more and more capacity to a market that simply doesn’t need it (possibly leading to every American on the eastern seaboard owning
their own personal casino by the middle of this century) as states scramble to wrest their citizens gambling revenues back from neighboring states’ casinos, further west the battles were far less about interstate rivalry, and internal squabbles amongst gambling entities and the business and money behind them.

In California voters rejected plans for a new casino in the Central Valley planned by a tribe that had purchased the land especially, despite it being somewhat geographically diverse from their more traditional homelands, and who was it the spearheaded the fight against this gambling compact that would have allowed the new casino? The owners of a casino nearby, another tribe of Indians, who saw nothing to be gained from the additional competition and had repeatedly said so in their expensive campaign to have voters reject the proposal.

In Colorado the concept of casino-style gambling at racetracks was rejected by voters after a spirited debate on the subject was entirely settled by the owners of pre-existing local casinos outspending the supporters of the proposal both in terms of advertising and lobbying. Echoing some of the arguments from California it was claimed that whatever revenues that would be gained from the new businesses would more than likely only just cover the losses in revenues the current casinos would suffer as a result.

Not that these defeats are likely to halt gambling sites in the US from dotting the landscape like measles, nor slow expansion into areas as yet untouched by the industry. The liberalization of the gambling laws across so many states over the last few decades signals that the public, at least, are willing to accept it as just another recreation, however with the rise of the internet and possible future legalization of internet betting in the US, it remains to be seen if states aren’t just saving up a millstone of closing employers in the run up to 2016’s appointment at the ballot box.