Frank J. Fahrenkopf, Jr.
As tax increases and the potential for gambling expansion began to dominate the public debate about the industry this year, one thing became clear: There is a disconnect between policy-makers and the gaming industry.
Many policy-makers don’t understand the gaming industry and therefore treat it in a way they wouldn’t treat any other business. This has, directly or indirectly, led to serious legislative challenges in the states where we do business. When the governor of Illinois first proposed an increase in the gross gaming tax to 70 percent, the almost universal reaction was disbelief. One industry analyst called it “outrageous” and “stunning.” Another called the volatile business climate in Illinois “inhospitable.” Others thought it was “suffocating” and even “punitive.” I think it’s safe to say that most people—myself included—never thought it would become reality.
The lack of understanding of our industry also has fueled opposition to economic development and capital investment that normally is coveted by states, particularly those with fiscal difficulties. In Maryland, for example, the governor vowed that casinos would not become part of the mix in the state as long as he remained in office, despite the fact that the National Gambling Impact Study Commission found that “destination resorts”—typically casinos with hotels, restaurants, theaters and/or shopping—could offer greater benefits to a community than other forms of gaming that did not offer similar amenities. According to his spokesman, destination resorts would not become a reality in the state because “[y]ou can go in and not come out for days.”
In Massachusetts, the governor suggested that licenses should last for only five years to actually discourage any investment. He indicated that he would not back a “full-fledged casino-type operation nor a long-term investment which a casino operation would entail,” adding that any gaming should be “temporary in nature.”
In most of our newer markets, as well as prospective markets, casino gaming is seen solely as a source of tax revenue, not as a legitimate business that can bring jobs and capital investment to the state. As representatives of this industry, it is our job to make sure the correct message gets out—to the media, to policy-makers, and to the general public.
How can we accomplish this?
We can be an ongoing presence in every gambling debate. The need for an industry voice has been particularly acute in those states that have considered gambling expansion, where the sole voice being heard was that of opponents. As a result, our board decided a year ago that the AGA would, when invited by a state legislator or other public official, testify about the industry, debunking the myths and undocumented allegations repeated by our opponents. In late 2002 and 2003, I brought that message to Maryland, Massachusetts, Pennsylvania and Rhode Island. It’s not the AGA’s job to advocate for gambling expansion, but it is our job to make sure legislators and others have all the facts, not just one side, in order to make an informed decision that is in the best interest of their constituents.
We can share effective strategies with one another. Typically, when one state takes the lead on some type of legislative or regulatory action, other states follow. Legislation to raise taxes, for example, was considered in several states in 2003. Regulations to establish self-exclusion programs began in Missouri and now exist in seven of the 11 commercial casino states. From each of these debates, the companies doing business in that state have learned what works and what doesn’t. We are working with our state associations to review strategies used to educate state leaders about our industry. Ultimately, we hope to assemble a best practices book to help guide our industry education efforts.
We can be pro-active in talking about our business. Becoming familiar with state legislators where we do business is of paramount importance, but it’s also important to reach out to a broader audience of legislators from those states without casino gaming. To help them better understand our industry, we need to go directly to legislators. For the past few years, individual AGA members have participated in events such as the annual meeting of the National Conference of State Legislators (NCSL). This year, with this new business imperative in mind, we hope to work with our state associations to increase our industry presence at gatherings of policy-makers and build on the progress we’ve already made in educating this audience.
We can facilitate access to facts about our industry. As part of our ongoing effort to serve as a central resource for the facts about gaming entertainment, we have launched a redesigned Web site with many innovative features. A wealth of information can be found easily on the site thanks to an improved search engine and other new navigational tools. Reporters, policy-makers and the general public now can access studies and a list of expert contacts on specific topics. They can create their own customized press kit based on their areas of interest. They can read articles, testimony and speeches grouped by that latest “hot topics.” And they can view some of the most frequently asked questions about the industry, along with responses, in an update to the AGA’s “Myths & Facts” document.
When editorials from major daily newspapers continue to say that casinos “create no economic value,” “drain family resources” and “harm society,” we know we have a big job ahead of us. But if we make our presence known, share our best practices, and make it easy to learn the facts about our industry, we will be making significant progress. There couldn’t be a job more important to the future of our industry than this one.