Will Washington Revive its Bleak Budget with Statewide Gambling?
Washington State’s $4.6 billion deficit, which caused Gov. Christine Gregoire to cut the proposed 2011-2013 budget by $3 billion, discourages her to the point that “in some places, I don’t even thinks it’s moral,” she told crosscut.com.
The prospect of further deep cuts in jobs, education and health care heats up the discussion over whether Washington should approve gambling in bars and other public venues to bring in more tax revenue, reported seattlepi.com.
Washington receives no revenue from tribal gaming’s $1.6 billion industry within the state. This means it could legalize gambling statewide without losing millions from revenue sharing agreements with tribal casinos that most states collect.
In 2005, Gov. Gregoire negotiated a compact with the Spokane tribe that would have brought $140 million per year into state capital – a move criticized by fellow democrats, reported publicola.net.
"Why would you give someone a monopoly without taking a cut?" asked Sen. Ken Jacobsen, D-Seattle, according to a 2008 article in seattlepi.com.
According to The News Tribune, Gregoire recanted on the deal jointly opposed by tribes and commercial gambling interests, because the revenue sharing would infringe on tribes' ability to allocate money to more disadvantaged tribes, and the deal leveraged control for the government against the massive expansion of tribal gambling, reported The News Tribune.
If Washington approved and taxed gambling, the state could play the upper hand to tribes with the ability to locate gambling anywhere. Tribes are restricted to building gaming facilities on their land.
Washington's hospitality industry wants a chunk of that money. Anthony Anton, president and CEO of the Washington Restaurant Association, told crosscut.com that allowing gambling in restaurants and bars is on the list of several issues that would help small businesses in the state, although he's not "begrudging" that "tribes are a major political entity in the state."
"The tribe's reluctance to give up their monopoly is a barrier [to expand state-run gambling]. I'm not sure the right proposal has been put together yet in Washington, a way to balance everyone's interests," Anton told crosscut.com. "It takes the right year, the right coalition and the right leaders."
That said, he sees statewide gambling helping Oregon and its hospital industry. "Gambling has been a boon to Oregon; I don't see anyone trying to repeal the Oregon model."
Oregon, which allows and taxes video gambling of poker and slots in bars, generates approximately $1 billion in state tax revenue every two years, said Steve McCoid, president of the Oregon Restaurant and Lodging Association. "We were one of the first states to jump on it [about 20 years ago]," McCoid told crosscut.com. "There are a significant number of people who don't like it that the state's in gambling, and think it's not the best way to fund public services. Practically speaking, from a dollar and cents perspective, you have to wonder why you don't do it."
Of Oregon's about 2,500 establishments that offer some form of gambling, the state collects 75 percent of net proceeds from gambling, and business owners keep 25 percent (down from 35 percent previously).
Minnesota is considering a similar move to fix the state’s deficit without raising income taxes: legalizing slot machines in bars statewide with an estimated new revenue boost of $630 million a year, reported Centre Daily Times. While spokesmen for the House and Senate Republicans told startribune.com it's not in the cards under a GOP government, DFL Gov.-Elect Mark Dayton said he would consider a state-run casino, strongly opposed by Indian tribes. Former Sen. Dick Day, a racinos lobbyist, told startribune.com he's optimistic about passing a bill, especially if the revenue goes toward a new Vikings stadium.
In Pennsylvania, slots provided $616.5 million in revenue last year, reported Centre Daily Times. “With over 1.4 million more people in Washington State than Minnesota, and with a more aggressive licensing plan than Pennsylvania (where only 10 of 14 potential licenses are operating), Washington could see even more revenue,” reported the newspaper.
Back in Washington, the continual push to legalize gambling is a constant “drumbeat,” said state Rep. John McCoy of the 38th District, which includes Everett, Marysville and the Tulalip reservation, to crosscut.com.
The Tulalip Resort Casino north of Everett, which is the state’s closest resemblance to a full-fledged Las Vegas-style experience, has thrived despite the recession. Another 22 tribes operate 28 casinos in Washington State. They generated an estimated $1.75 billion in net revenue in fiscal year 2010, reported crosscut.com.
McCoy urged politicians to respect the primary economic resource for Washington tribes. Its casinos have improved conditions for the once poverty-stricken Tulalip tribe that claimed a 65 percent unemployment rate in 1994, reported crosscut.com. Now, the tribe employs 3,000 people.
“Today, any Indian within 50 miles of the reservation who wants a job can have a job,” McCoy said. “We don’t pay minimum wage. All the jobs are family-wage jobs…. We have changed the complexion of the economic base of Snohomish County to the positive.”