What will happen if, on Nov. 4, voters allow Colorado's five racetracks to receive a total of 2,500 Video Lottery Terminals with the prospect of more to come?
Amendment 33 backers, Support Colorado's Economy and Environment, argue that Video Lottery Terminal revenues will be a boon for the state. Without raising taxes, the proceeds will fund tourism promotion, which they say will create more jobs. The amendment also provides funding for parks and open space.
Opponents, who formed the group Don't Turn Racetracks Into Casinos, claim the proposal provides a constitutionally sanctioned monopoly for the British Wembley Corporation, which owns four of Colorado's five racetracks, including the one in Colorado Springs.
Under the amendment, these five tracks would be the only venues for the lottery terminals.
Players behind the players
With a record $7.8 million being pumped into the campaign, Amendment 33 has proven to be the most expensive in Colorado history.
The group Don't Turn Racetracks Into Casinos has been bankrolled by casinos in Cripple Creek, Black Hawk and Central City, who fear the measure would gut the gambling towns' economies.
Meanwhile, Support Colorado's Economy and Environment is being underwritten by Wembley, which owns racetracks in the United Kingdom and the United States. According to a recent company memo, Wembley has allocated $10 million in support of Amendment 33. Wembley LLC President and CEO Ty Howard disputes this figure, claiming it also includes funding for new business initiatives.
The company's Colorado campaign has also been marred by a scandal involving two Wembley executives, who were indicted on bribery charges in Rhode Island (home of Wembley's only U.S. racetrack casino) for offering $4.5 million in payments to the law firm of a state representative to support additional Video Lottery Terminals to Wembley's track and opposing a proposed Indian casino.
Lottery or gaming?
If approved by voters, Video Lottery Terminals would be installed at racetracks. In Colorado Springs, the racetrack could install 500 of the machines, which resemble slot machines except they don't spew money out when you win. Instead, winners receive a piece of paper to cash in, and players can pump money into them much faster than they can one-armed bandits.
In Colorado, unlike existing casino gambling, the racetrack-casinos -- also known as "racinos" -- would not be regulated by the state's division of gaming, but by the state lottery commission.
Katy Atkinson of Don't Turn Racetracks Into Casinos claims this is a calculated move by Wembley to escape the rigorous regulations of the gaming division.
Wembley's efforts to expand into the Video Lottery Terminal business come at a time when racetracks are a dying industry. While tracks turn a modest profit (figures show Colorado's tracks grew by 8.5 percent over the last 10 years) compared with new forms of gambling, the growth is miniscule, says gaming industry advisor Eugene Christiansen.
"Small tracks like those in Colorado have very little in growth prospects," Christiansen says. "Machines at racetracks would totally change those economics."
Not completely equal
The amendment's proponents say it would generate jobs in economically strapped Colorado. However, opponents have raised the question, at what cost?
Last year, Bob Breen of Rhode Island Hospital's gambling treatment program published a study on problem gambling. In it, he found that Video Lottery Terminals users went from social gamblers to pathological gamblers in one-quarter of the time it took for those gambling in more established venues.
Video game expert Roger Horbay of Toronto's Game Planit takes Breen's claim a step further. According to Horbay, the technology used in Video Lottery Terminals creates the illusion of being on the cusp of victory by generating "near misses' -- roughly the equivalent of a slot machine constantly coming up a lemon shy of the jackpot.
"Once you start playing, your rationality is suspended, Horbay said. "You're in this perceptual paradox where the machine is telling you, 'Hey, you can win and you're not that far off.'"
-- John Dicker