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Originally published January 16, 2013 at 4:09 PM | Page modified January 16, 2013 at 4:09 PM

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Op-ed: Allow nontribal cardrooms to offer electronic scratch-ticket machines

New revenues from nontribal gaming could go a long way toward closing the state’s budget shortfall, writes Dolores A. Chiechi, executive director of the Recreational Gaming Association of Washington.

Special to The Times

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WASHINGTON’S tribal casinos poured jackpot-sized contributions into state political campaigns in 2012 — more than $1 million, according to public-disclosure records.

That comes as no surprise, given the tribal casinos’ overwhelming dominance over the state’s gaming market, which netted a record $2.7 billion in the 2012 fiscal year. The tribes’ share of this market climbed to 79 percent, with more than $2.1 billion in net receipts. Gaming receipts have grown steadily every year since 2000, when the total stood at $863 million, with tribal casinos then garnering a 31.6 percent share worth $273 million.

Tribal receipts are not taxed by state or local governments, and Washington’s compact with the tribes does not provide for revenue sharing. All other states with tribal gaming have revenue sharing or provide at least some competitive equity for nontribal operations.

The phenomenal growth of tribal gaming is driven largely by the tribal casinos’ exclusive operation of some 23,000 electronic scratch-ticket machines. The tribes have made it clear that maintaining their de facto monopoly on these machines is a top legislative priority for them.

These slot-like machines are immensely popular with gaming patrons, drawing customers away from other gaming venues, such as house-banked cardrooms. House-banked cardrooms, also known as “minicasinos,” were authorized by the Legislature in 1997 to allow patrons to play against the house, rather than just against each other.

Last year’s proposal by the trade association for nontribal cardrooms, which would raise nearly $400 million a biennium for the state, gained some traction among legislators, but did not garner enough support to move forward.

With our state’s projected revenue shortfall of about $2 billion, including the impact of the state Supreme Court mandate regarding education funding, new revenues from gaming could make a significant difference. For example, it could replace the $367 million in fuel-excise taxes, extended in former Gov. Chris Gregoire’s budget proposal. Or, it could fund K-12 class-size reductions, full-day kindergarten and professional development for teachers, which together would amount to about $320 million. It could also fund a 4 percent cost-of-living adjustment for school employees, or roll back 7 to 10 percent in tuition hikes at our higher education institutions.

The money would be generated by allowing nontribal cardrooms to operate a limited number of the same slot-like machines that tribal casinos already have. The proposal would limit machines to the 56 (down from 60 in 2010) existing cardrooms, and would cap the total number of nontribal machines at 7,875 statewide. New entrants into the market would have to operate card games for 5 years before they would qualify for electronic gaming.

This is a responsible proposal that addresses the concerns about proliferation of gambling venues and stands in sharp contrast to the 2004 ballot measure, defeated by voters. That measure, would have made an estimated 18,000 nontribal machines available in a large variety of locations.

Another reason given by opponents is that the state should not rely on gambling revenues because of potential social costs. This contradicts the reality of the state relying on revenues from the lottery, alcohol, tobacco and soon marijuana — all of which entail potential social costs. (For that matter, fast food could also be included in that category.)

The fact is, there is a huge, sustainable, untapped source of revenue in our state’s growing gaming market. Granting nontribal cardrooms a limited number of machines is a way to tap into this revenue source without challenging the tribes’ success, or renegotiating the state-tribal compact for a revenue-sharing agreement. It will also help to sustain the cardroom industry, which provides more than 6,000 well-paying jobs and millions of dollars in local tax revenues.

Our state needs to take another look at the gaming industry, and the role gaming revenues should play in state finances, especially when it comes to adequately funding education. It is time for a new deal in Olympia that puts the needs of our state and its citizens ahead of the tribal casinos’ political clout, fueled by huge campaign contributions.

Dolores A. Chiechi is the executive director of the Recreational Gaming Association of Washington, the trade group for house-banked cardrooms.


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