Measure threatens pari-mutuel betting, CEO says
JARED MILLER Star-Tribune capital bureau | Posted: Thursday, February 1, 2007 12:00 am
CHEYENNE - The president of Wyoming's only legal horse racing operation Wednesday warned of a crippling blow to his business if multistate lottery and instant-ticket scratch games become legal.
"It would be very difficult for us to overcome the impacts of a lottery - devastatingly so," said Eric Spector, president and CEO of Wyoming Entertainment, owner of Wyoming Downs horse racing in Evanston and Wyoming Off-Track Betting in Casper, Cheyenne and Rock Springs.
Spector delivered the dire predictions to the House Travel, Recreation, Wildlife and Cultural Resources Committee as it considered a bill authorizing a multistate lottery, such as Powerball, and instant ticket scratch-off games.
Spector opposed the bill, but said his company could survive if the state allowed him to install 500 to 600 slot machines at the Wyoming Downs racetrack in Evanston to make up for the losses.
He said similar provisions have offset the impact to horse racing in other states. Slot machines are illegal in Wyoming outside the Wind River Indian Reservation.
The committee endorsed the bill on a 6-3 vote but did not consider Spector's request for the slot machines. The bill now moves to the Appropriations Committee to consider a $2 million general fund appropriation to establish the lottery and instant ticket games.
House Bill 128 authorizes the state to join a multistate lottery such as Powerball so Wyoming residents can compete for cash pots that can reach hundreds of millions of dollars. The bill also authorizes vendors across the state to sell instant ticket games, or scratch tickets, which give players a chance to instantly win prizes.
In addition, the bill establishes a state gaming board and authorizes it to hire the staff and develop the extensive systems needed to support statewide gaming. The bill requires the gaming board to repay the initial $2 million appropriation in one year.
Lottery has become a nearly perennial issue in the Legislature. This year's bill gained momentum behind a number of new lawmakers and newspaper polls that show a majority of state voters support the lottery. Many supporters believe Wyoming is funneling business revenue to neighboring states that offer the games.
A Casper Star-Tribune poll in February 2006 showed some 62 percent of the state's voters support joining the multistate lottery, with 32 percent opposed and 6 percent undecided. The poll by Mason-Dixon Polling & Research Inc. of Washington, D.C., included responses from 625 registered Wyoming voters and had a margin of error of plus or minus 4 percentage points.
"It's your duty to vote yes regardless of your personal opinion if you're here to represent the will of the people," Rep. Dave Edwards, R-Douglas, told the committee Wednesday.
Opposition to the lottery has mostly centered on the social ills predicted to arise if the legislation passes. A representative from the Mormon church in Wyoming spoke out against the bill last summer.
The complaint by the horse racing executive adds a new twist. It also comes late in the legislative process, and follows months of public testimony and work by a legislative interim committee on the bill.
The problem, Spector said, is that horse racing competes for the same customers as lottery and instant ticket games. He predicted that a lottery could take up to 70 percent of his customers and ultimately close the tracks. Pari-mutuel betting is the only presently legal form of gambling in Wyoming outside the reservation.
"Without some type of offset, we would probably have to close up shop," Spector said.
Spector said he and his business partners were unaware of the momentum the lottery bill had gained when they bought the track for $20 million in September. Lawmakers have a record of rejecting similar legislation, and the odds of a bill becoming law this year seemed slim, he said.
"This changes the playing field drastically," Spector said, noting that the horse track generates millions in revenue each year for Wyoming businesses and state sales tax coffers.
Helping horse racing
Legislatures in some other states are considering adjustments to gambling laws to buoy struggling horse racing operations.
The North Dakota Legislature is eying a bill that could lift restrictions on a form of off-track betting called "Instant Racing," according to the Grand Forks Herald. Similar legislation is under review in Illinois.
Wyoming Downs took a hit last May when the state Supreme Court ruled "Instant Racing" was illegal. Under previous ownership, Wyoming Downs invested $1 million and installed the machines at its off-track betting facilities. The machines were subsequently removed.
Rep. Pat Childers, R-Cody, chairman of the Travel, Recreation, Wildlife and Cultural Resources Committee, noted that the state attorney general has deemed electronic gambling illegal in Wyoming. He also expressed concern about injecting the horse race issue into the lottery debate.
"At this late date, I'm not sure it would be appropriate to bring a whole new idea into the lottery," Childers said.
Other testimony
Cheyenne resident Elaina Summers testified against the bill. She warned of a potential increase in teen gambling addiction. She also argued that the lottery is a form of voluntary taxation and complained about the lack of rules to regulate lottery advertising.
"Lottery advertising rarely explains the poor odds of winning," Summers said.
"The people who can least afford it spend the most on lottery," added Douglas Fowler, a Cheyenne lawyer who also testified against the bill.
Representatives of the Wyoming Game and Fish Department and the state Department of Parks and Recreation Wednesday supported provisions in the bill that could boost their agencies' budgets.
The bill includes provisions to give the first $5 million in profit each year to the Game and Fish Department, and any additional profit to Parks and Recreation. Both agencies rely heavily on user fees, which are dwindling.
"That would allow the Game and Fish Department to wean itself off of the general fund appropriations we have received in the last few years," Deputy Director John Emmerich told the committee.
The bill also directs 1 percent of the profits toward prevention and treatment of gambling addiction.
Reach capital bureau reporter Jared Miller at (307) 632-1244 or at jared.miller@casperstartribune.net.