Video-poker industry demonstrates clout

BATON ROUGE -- After years of high-profile battles in the state Capitol, gambling interests kept a low profile in the 2003 legislative session, partly masking a string of victories for video poker and racetrack operators.

It was an especially good session for the video-poker industry, which established itself as the dominant political player among the gambling-industry sectors that vie for lawmakers' favor.

Legislation approved and sent to Gov. Foster would double to $20 the largest denomination that poker machines can accept and lower the minimum wager to 5 cents, potentially making the games more convenient and attractive to customers. Other bills would reduce paperwork requirements for poker operators and halve the number of hours that truck-stop casinos have to keep their restaurants open.

"For video poker, they probably got more out of this session than I have seen in the other three years that I've been chairman" of House Committee on the Administration of Criminal Justice, said Rep. Danny Martiny, R-Kenner. Most of the video-poker bills are awaiting action from Foster, who historically has allowed gambling-related legislation to become law without his signature.

Riverboat casinos emerged from the session unscathed but without any major legislative victories, and racetrack casinos had mixed results.

"We were playing defense," said Wade Duty, executive director of the Casino Association of Louisiana, which represents the riverboat industry. "Our understanding at the start of this was that this was an election-year session, and most people were not looking to handle any adventurous issues."


Multigame compromise

As such, the session reveals an evolution for an industry that has been controversial in Louisiana since it was first authorized by the Legislature a dozen years ago. As gambling has become entrenched, what once was a philosophical battle between the industry's supporters and opponents has become a competition for market share among racetracks, riverboats, the land casino and video poker operators.

"The interesting thing about gambling is it's no longer a fight between pro and anti, it's purely an internecine war," said C.B. Forgotston, a New Orleans lawyer and longtime industry critic. "And depending on who has the clout, the gambling people get what they want."

One of the big battles of the session, for example, involved legislation authored by Martiny seeking to undo a 2001 law that allowed racetrack casinos to have multigame machines that offer slots and video poker. Supporters of the bill pointed to a 1997 statute that authorized racetrack casinos and specifically prohibited the tracks from offering video poker.

Opponents complained that Harrah's Entertainment and Boyd Gaming had relied on the 2001 law when investing millions of dollars in the multigame machines. Eventually a compromise was struck calling for a three-year phaseout of the multigame machines at Louisiana Downs near Bossier City and Delta Downs near Lake Charles.

Alton Ashy, the video-poker industry's chief lobbyist, said the changing climate has allowed him to push for favorable legislation rather than fighting against bills that would hurt his clients. "When you're used to playing defense and just concentrating on staying in business, your strategy is a lot different than when you're on the offense," Ashy said.

Though gambling's critics have become rarer at the Capitol, there also appears to be little appetite among lawmakers or lobbyists to let the industry grow in ways that would create more competition for those already in business.

The lone exception this session came when lawmakers approved legislation allowing the New Orleans Fair Grounds to become the fourth Louisiana race track with slot machines, provided parish voters agree. The bill sprang from a 2001 agreement in which Harrah's New Orleans Casino agreed to waive its exclusivity on land-based gambling in Orleans Parish as part of a deal in which the Legislature gave the company a $50 million tax break.

Jim Harris, a lobbyist who represents the Fair Grounds, said any further expansion of gambling likely would face stiff opposition. "There seems to be an acceptance now that it's here, though I think a lot of folks would have great trouble if it expanded -- both the existing businesses and the anti-gambling folks," Harris said.


Boarding fees sink

As video poker was racking up victories, riverboats were fighting a bill by Sen. Cleo Fields, D-Baton Rouge, that would have allowed local authorities to triple the per-passenger boarding fees at the two boats based in Baton Rouge.

Although the money raised would have paid for police and firefighter pay raises, riverboat executives said the fees amount to a tax on the boats because they don't actually charge customers who walk through their turnstiles.

The bill died after hundreds of casino workers clogged the committee's hearing room in protest. But the riverboats weren't as lucky with a bill that would have allowed them to expand their aisle space without having it count against their allowable gaming space. The legislation died on the House floor as House Speaker Charlie DeWitt, D-Lecompte, and others attacked it as an expansion of gambling.

"I don't think we suffered any serious setbacks," Duty said. "Clearly there are some things we would've liked to see go through but didn't."

Some analysts attribute the industry's varying fortunes to a golden rule of politics: He who has the gold gets to make the rules. Though Louisiana's video-poker operators are allowed to contribute to political candidates, riverboat casinos, racetracks and Harrah's New Orleans Casino are banned from doing so by state law.

Lobbyists on both sides say that disparity, along with the fact that poker is more widespread than riverboat gambling or racetracks, contributes to the industry's success with lawmakers.

"I think it's a factor. I won't say it's the exclusive factor," Duty said.

Ashy said industry contributions help, but so does the fact that video poker exists in more than half the state's parishes and that many operators have long-standing ties to their local representatives.

"We put on fund-raisers for people, and we participate in fund-raisers for people, and we're going to continue to do that hopefully even at a higher level," Ashy said.


Little hope for repeal

But Ashy does not support giving riverboat operators the same right, and he helped kill an amendment offered late in the session by Sen. Joel Chaisson II, D-Destrehan, that would have given other gambling interests the right to make political contributions.

"We certainly were not in favor of the riverboats being able to give campaign contributions," Ashy said. "The first thing they would do is give campaign contributions, and the second thing, is get rid of their competition."

With gambling tax dollars allocated to dozens of different uses, from boll weevil eradication to community college programs, some longtime industry opponents appear to have given up hope of repeal.

Walter Abbott, a Ruston businessman who is on the board of the National Coalition Against Legalized Gambling, said he doesn't see the industry's fortunes reversing anytime soon.

"That needle of tax money is in the vein too deep to be pulled out now," Abbott said.

By Jan Moller