I also want to thank you for being with us today. Your presence here today and your continuing support of the American Gaming Association send the very important message that the gaming-entertainment industry is serious about taking its rightful place as one of the nation’s leading economic forces. It is a message that makes my job in Washington easier and that makes your job easier as you work in a growing number of states.
PUBLIC AWARENESS, KEY PART OF AGA MISSION
Your continued support also plays an important role in helping us fulfill a key part of the AGA’s mission—raising public awareness. It is important for the public to see the type of industry we have become. The AGA is actively pursuing a strategy of putting a face on our industry, convinced that when the public sees who we are support for our industry will grow.
POLITICAL ENVIRONMENT CHANGED RAPIDLY
As many of you have heard me mention before, when we first opened the doors of the AGA in June of 1995 we knew there were a number of federal issues—the threat of a national tax, IRS issues, etc.—we would need to face, but national attention had barely focused on our growing industry and Frank Wolf’s one-man anti-gaming crusade was getting scant attention. The political environment in Washington, while not necessarily friendly was not hostile. Well, the political environment changed rapidly.
A NUMBER OF REASONS FOR THE CHANGE
The phenomenal growth of the gaming is certainly a factor. The federal government is always quick to spot a new source of tax revenue.
Anti-gaming politicians, lead by Rep. Wolf, were emboldened by the elections of 1994, when many new members of Congress were elected with considerable support from the Christian right.
Another faction, led by Sen. Paul Simon of Illinois, views the gaming industry as a rich source for increased federal taxation and — although it is not specifically mentioned in the legislation — Sen. Simon made a proposal on the floor of the Senate for a five percent gross receipts tax on new gaming ventures.
Indian gaming has continued to generate concern on the part of many governors and state attorney generals. Their concern has been carried to the federal level. The Seminole Case argued recently in the U.S. Supreme Court is illustrative of the existing conflict between tribal officials and the states. Some governors are concerned with obligations the states have concerning regulation and whether native lands include non—contiguous land purchased by tribes. Ambiguity about the “scope” of existing gaming have exacerbated concerns.
Another issue of concern for governors was the Couerd’elene Idaho tribe’s proposal of a nation—wide phone lottery. This proposal has created anxiety for governors in states where lotteries provide considerable state revenues. The National Association of Attorneys General has adopted a resolution opposing the use of an 800 number and credit cards. The National Restaurant Association is very disturbed about the affect the proliferation Indian gaming has had on many of its smaller members.
Yet another group of Federal legislators, led by Sen. Slade Gorton of Washington, was concerned about a planned experiment by foreign air carriers with gaming on international flights. While this activity is presently against US law, the Department of Transportation is presently studying this issue and will issue a report in the near future.
Gaming on the Internet has become one of the most controversial areas of concern. The activities of several entrepreneurs — some with alleged criminal convictions — in Antigua and Belize who are attempting to establish off-shore Internet gaming sites has been the focus of much attention. Regulation, licensing, accountability, and youth gaming are at the top of the list of Congressional concerns regarding this issue.
The use of television, radio and outdoor advertising by the gaming industry also raised questions among legislators. Congressmen Charles Shumer of New York and Martin Hoke of Ohio, as well as Sen. Joseph Lieberman of Connecticut, all expressed strong unhappiness and concern, particularly with regard to “state-sponsored” advertising by state lotteries. Additionally, Congressman John Conyers of Michigan noted with disapproval that state lotteries have used billboards and other forms of advertising in low income, minority areas promoting gaming as a means to “strike it rich.”
Corruption charges in Louisiana became public about the same time these other issues were raised, reactivating the old stereotypes of the industry concerning the involvement of organized crime. Missouri, Pennsylvania and Illinois public-official corruption cases also provided ammunition to those opposing the industry on “good-government grounds”
Certainly, the drumbeat of opposition put forth by The Washington Post after gaming became an issue in Maryland and Virginia also helped to change the political environment.
RESULT WAS A HECTIC YEAR, COMMISSION BATTLE
With all of those factors in play the move to authorize a national commission to study gaming gained substantial momentum—to put it mildly. The study our opponents wanted would have been nothing more than a witch hunt, funded by the federal government. There was no way we could support the original the legislation creating a commission. That put us in the difficult position of appearing to be opposed to a study. It didn’t matter that in every piece of testimony the AGA submitted and in all of my media interviews we made the point that we supported a fair and balanced study. I’ve been dealing with the media long enough to know from the beginning that we were going to lose the perception battle, but we had no choice. And we took our lumps in the early stages, but in the end we the Congress passed and the President signed legislation, that, if they all follow through on their commitments (which is no sure thing) will result in a fair and balanced study.
CONTRARY TO APPEARANCES, WE WERE WORKING ON MANY OTHER ISSUES. A FULL AGENDA LIES AHEAD
We will be working with the Commission to make certain the industry is fairly represented.
Developing a large network of allies. We will be asking all of you to help us reach out to your vendors and suppliers, to activate your customers and to become even more politically active than you have been.
We must increase participation in our Political Action Committees and you must increase participation in yours.
We will be announcing a number of white papers and studies that will help us counter the biased data that now exists.
And, of course, we will continue to represent the industry with Congress and with the Administration with regard to a number of issues.