Leader Blues

Wednesday, March 16, 2005

EDITORIAL>> Gambling bill calls for a veto

Arkansas voters have been turning down initiatives to authorize casino gambling since 1964, but now it’s coming anyway to a city not too far from you, thanks to the General Assembly.

The legislature is doing it with extraordinary alacrity. In the span of a week from its filing, SB 999 has climbed the ladder through 3,000 bills and will be ready for the governor’s signature following Tuesday’s approval in the House. The legislature, meantime, has been studying school finance for 60 days without a feint toward action.

But this isn’t so mysterious. Legislation helpful to big money gets a ready and favorable hearing every time. Corporate heels do not have to cool in the legislative anterooms.

Here’s an interesting coincidence. The powerful Arkansas State Chamber of Commerce last week announced its wholehearted support of the electronic gambling bill, which it said would be good for the state’s economy. The same day, a separate newsletter from the chamber applauded Oaklawn Jockey Club at Hot Springs and Southland Greyhound Corp. at West Memphis, which would operate the only two gambling operations allowed under SB 999, for becoming “Pinnacle” members, a distinction earned by companies that drop at least $5,000 each on the state chamber to support its lobbying.

Hmmm.

SB 999 is sponsored by Sen. Bob Johnson, who also carried Deltic Timber Corp.’s bill to usurp a municipal utility’s power to exercise eminent domain to protect its water supply from development pollution. The racetracks’ bill purports to legalize electronic wagering games at the two racetracks as long as the games involve “skills.”

We thought the machines were already legal at the tracks. But it turns out that what the bill really does is legalize video poker and blackjack at parlors operated by the tracks. Church groups wanted to amend the bill to specifically exclude those games, but the tracks said no.

If playing poker or blackjack on machines is legal, what is the legal and moral distinction between that and the live thing with human dealers?

Obviously, there is none.

We happen to believe that casino gambling does not improve a state’s social and economic climate — six of the counties with the highest bankruptcy rates in the nation are around Tunica, Miss. — but a substantial number of people disagree.

Nevertheless, SB 999 raises issues that ought to trouble everyone. Here are a couple:

If the state is going to permit electronic gaming parlors, shouldn’t it put them out for bids rather than assigning these exclusive money-making franchises to two companies free of charge?

Companies pay hundreds of millions of dollars for such rights.

What is a fair tax for the state on an enterprise that will be a nuisance for the state? SB 999 would take 18 percent for the state, 1.5 percent for the two cities and 0.5 percent for the counties.

In other states, the tax ranges up to 75 percent of gross receipts for high volumes of wagering. The Arkansas tax would be a little higher than the tax in Mississippi, which Southland and Oaklawn say is hurting their clientele base.

Mississippi also imposes a 3 percent tax on gamblers’ winnings, collected at the casinos.

When major legislation sails through the legislature with lightning speed, there is always a reason.

It can’t stand much analysis and discussion.

Since the Legislature didn’t want to take the time, Gov. Huckabee can give it a respite with his veto pen.