U.S. House Committee on Resources
Frank J. Fahrenkopf, Jr.
President and CEO, American Gaming Association
Mr. Chairman and members of the Committee, thank you for the opportunity to present testimony on H.R. 497, the National Gambling Impact and Policy Commission Act. As president and CEO of the American Gaming Association, I am submitting this testimony to officially make clear our membership position on this legislation. The American Gaming Association’s membership includes most of the industry’s largest publicly—traded gaming—entertainment companies and companies licensed to manufacture and distribute gaming equipment.
As I have testified before other Congressional committees and have made clear in many public statements, the gaming—entertainment industry does not oppose a fair and balanced study for the purpose of providing information and recommendations to state and local governments.
A fair study, while costly to the American people and duplicative of multiple state studies, will show that today’s gaming—entertainment industry is an economic engine, providing jobs to more than a million people—with a positive track record and a great story to tell.
The members of the AGA are, however, inalterably opposed to the legislation in its current form. We oppose the current legislation because we are concerned, considering the anti—gaming sentiment of the commission’s supporters, that the commission would be biased against our industry. That intent is clearly reflected in the language of the legislation, which requires studying only the negatives of the industry.
We are also concerned about the manipulation of the process of the study and the final results. Among the problems with the legislation as it is currently written is the requirement (page 6, line 2) that the commission make “recommendations for such legislation and administrative actions as it considers appropriate.” In other words, federal regulation and, ultimately federal taxation.
The proponents of the legislation, including its authors, have reportedly said they are not seeking Federal intervention. They have also said they are seeking only a fair and balanced study. If the legislation were changed to reflect those assertions the industry would support its passage. The legislation must place state and local officials on the commission, require the commission to restrict recommendations on purely state gaming policy to state and local governments and include all forms of gaming in the study. The following changes in H.R. 497 would make it acceptable to our industry.
It should acknowledge the traditional jurisdictional mandate of the states with regard to gaming policy under the Tenth Amendment. To protect the jurisdiction of the states, the legislation should ensure that the nation’s governors, state legislators, mayors and other local elected officials play a major role in any such study. It is, in fact, these state and local officials and their constituents who have the greatest stake in the decision involving gaming policy.
The legislation should require that study commission recommendations regarding purely state gaming policy issues be directed to state and local governments, rather than as the bill presently provides, i.e., for the study commission to make specific recommendations to Congress for federal legislation. Only recommendations on matters of federal jurisdiction, such as Native American gaming and Internet gaming, should be addressed to Congress.
The study should be inclusive of all forms of gaming presently legalized in 48 of the 50 states, including casino gaming, state lotteries, charitable gaming, Native American gaming, sports betting, horse and dog racing and other pari—mutuel activities.
Mr. Chairman and members of the Committee: We are proud of our industry and the value we bring to the communities where we do business. We, of course, have always recognized that we have opponents—people whose moral and religious beliefs cause them to oppose us; people who are understandably concerned about the impact of a large new industry in their community or neighborhood; and, of course, people who have a bias toward gaming—entertainment based upon a whole host of out—dated stereotypes, misperceptions and misleading and inaccurate data.
The decisions you make regarding this study will have a significant impact on an industry that is a critical part of hundreds of communities across this land. A fair and balanced study may make a contribution. A study that is constructed to meet only the objectives of those who are inalterably opposed to the industry would be a disservice to the men and women who have jobs because of the industry.
Today, the gaming—entertainment industry provides jobs for more than 1 million men and women. These are good—paying jobs in a growing industry. Our industry is bringing economic opportunity to hundreds of communities across the country. The tax revenues we generate ($1.4 billion from casino gaming alone in 1994) are helping to build schools, roads and provide for other civic needs. We are growing, not only through expansion, but in the places where we are well established. In my home state of Nevada, Las Vegas is still the fasting growing city in the United States.
The growth of our industry is due to many factors, but the primary, overriding reason is as basic as the country’s free market system. Gaming provides an entertainment alternative that the American public wants at a price it considers reasonable. While final numbers are not yet in, we anticipate casinos will have recorded more than 130 visitors last year.
On behalf of those millions of Americans consider gaming—entertainment a viable option, we ask that you think of them as you consider our recommendations. Thank you very much for the opportunity to provide this testimony.