Contempo Magazine Blog

Today I interviewed Texas Gambling bill author, Representative Jose Menendez from San Antonio about the purposes and intent of his bill to bring casino gambling to Texas and how it would affect Texans and especially the Hispanic community.

 

The gambling industry is putting forth an all out effort to bring casinos and expand casino like gambling to horse and dog racing venues in the state of Texas. What makes Texas so attractive to the gambling industry? Considerable research has shown the high concentration of Hispanics in Texas provides a vulnerable population who is at risk for developing compulsions to gamble which can account for 30% or more of the gambling industries profits. This may explain why the gambling industry has donated millions of dollars to Hispanic legislators. The bills main author,Rep. Jose Menendez of San Antonio, says he wants to put in safeguards against abuse and create world class resorts.

 

House Bill HB 1724 authored by Menendez would create the Texas Gaming Commission and allow the establishment of 17 casinos in the state and casino gambling machines at horse and dog racing tracks. The Dallas Morning News reports the new proposal would allow up to 17 resort casinos: three on Indian reservations; two on the South Texas barrier islands; one in the Port Arthur area; three at Class 1 racetracks; two at Class 2 racetracks; and six others spread out across the rest of the state. The state would collect a 15% tax on gross gaming revenues and a 35% tax on the net slot income of owner of a slot establishment license. The funds would go to the Higher Education Trust except 1/30 to the municipality and 1/30 to the county where the gambling facility is located or 1/50 to the county if no city involved, 1/1000 to the Problem Gambling and Addiction Grant, and $200,000 to the Department of Public Safety for law enforcement costs related to the possession of gambling devices. Even if the bill passes the state House and Senate it would require voter approval.

 

Rep. Menendez in an interview today with Contempo said the bill is in it’s early stages. His goal is to create resorts with amenities such as entertainment, health spas, and convention facilities which can retain the millions of dollars Texas residents already spend who travel to Las Vegas. Even if the bill passes the Legislature and is signed by the governor each county will have the option to opt out of having gambling venues. He is against the creation of just “slot machine parlors”.

 

“I don’t want to see dirty, dingy, hole in the wall seedy slot machine parlors”he said.

 

The San Antonio Representative said he is motivated to do gambling in Texas the right way or not do it at all. Unlike many other Texas legislators he himself has not received any donations from the gambling industry. His decision to sponsor gambling legislation has been been the result of discussing it with fellow Texans.

 

Police officers who were against legalized gambling before the invasion of “8-liners” in the state have told Menendez that illegal gambling is on the rise. All across the state of Texas says Menendez there has been a growing number of these facilities which often mislead customers about payouts or have been the scenes of crimes. Menendez also recalled incidents where a neighborhood poker game became the scene of armed robbery because crooks knew of the game. His goal is to establish a safe and fair environment for gambling which is already going on.

 

Texans are already gambling in unregulated “8 liner” facilities throughout the state that often cheat customers and have evaded law enforcement. The creation of resorts would allow the state to make sure that gambling is done fairly and safely in a environment that will attract not only local customers but visitors form other states and Mexico.

 

Menendez agrees there must be a program established to prevent and treat problem gamblers which should be paid for out of gambling receipts not the Texas taxpayer. He would be in favor of an early intervention program that recognizes problem gamblers such that they would be barred from casinos and referred for treatment.

 

All racing and gambling regulation would come under the Texas Gaming Commission with some funds from gambling being used to increase the purses for racing to attract better competitors. Owners of pari-mutual racing licenses would have to apply for a slot establishment license and prove they have sufficient capital to fund their business.

 

 

Although backers of the bill estimate the Higher Education Trust will generate revenues of $807,934,000 by 2014 they have only alloted $836,000 in spending for Problem Gambling and Addiction grants by 2014. Rep. Menendez added today in his interview that there will be additional funds allocated from gambling receipts for prevention, treatment, and research. He is committed that these funds must come from gambling revenue.

 

Most Texas legislator’s who support gambling and have received campaign contributions from the gambling industry mirror Senator Rodney Ellis who says

 

“Everyone knows the battles I pick and the decisions I make are based on my convictions, not campaign contributions. Period.

 

“I support regulated casino gaming as an economic development tool for this state because it will bring $3 to $4 billion in revenue to our state coffers each year, and generate nearly $50 billion in initial construction start ups. That revenue will help make college more affordable, build stronger Texas schools, expand access to quality, affordable health care and help create a justice system we can all be proud of.

 

“Since 2000, only 2 percent of my overall contribution total have come from gaming interests, but I’m proud to have that support.”

 

Since the 1990’s a significant amount of research has been done on the problem of gambling addiction and identifying at risk populations. Many sources have found a relationship between income level, education, and ethnicity to the risk of developing a chronic addiction or gambling problem.

 

Some researchers say the gambling industry wants to promote the use of slot machines because they are designed to take the most advantage of the compulsion to gamble from the those are most likely to develop gambling problems. A noted expert, Dr. Henry Lesieur from the Rhode Island Hospital gambling treatment program , has said, in fact, that 30% of the gambling industry’s income comes from problem gamblers.

 

Studies in the United States and Canada looking at the Hispanic population have identified that up to 12% of Hispanics who take up gambling will become problem gamblers. What compounds this issue is that often times Hispanic are resistant to seeking treatment. Some authorities have indicated that prevention programs and treatment for the Hispanic community may need to be specifically tailored for this group to achieve success.

 

The gambling industry has donated almost $8 million to state legislators in Texas over the past year. The donations went to both Republicans and Democrats. Many prominent Hispanic legislators received high donations including South Texas Rep. Kino Flores $66,650, South Texas Sen. Juan Hinojosa $42,750, Carlos Uresti $42,611, Juan Escobar $42,000, Pete Gallego $40,000, Trey Martinez Fischer $37,900, Aaron Pena $37,200, Abel Herrero $31,615, Juan Garcia $30,185, Leticia Van De Putte $27,850, Diana Maldonado $27,600, and Rene Oliveira $26,500. Some politicians received more than 50% of their total donations from the gambling industry and for most of those named above gambling was their highest donor as reported by Texans For Public Justice.

 

The gambling industry is a big business with growing influence. The American Gaming Association reported gross intakes of $34 billion dollars at American casinos in 2007. At the 2008 Democratic Convention lobbyists for the industry wined and dined every new Democratic member of Congress at private clubs. However, they do have an “Achilles Heel” as it was called by Frank Fahrenhopf who is the President of the American Gaming Association which is gambling addiction.

 

 

Research into the causes of gambling addiction have come out of two sources, those essentially entirely funded by the gambling industry which critics say taints their results and those that are independently funded. Researchers from gambling industry funded sources say that gambling addiction is a rare problem that is caused by inherent factors or conditions not the casino or gambling device. Contrarily, independent researchers paint another picture, that of an industry that is using science to maximize their ability to draw as much as they can from the customers and keep them gambling until they are broke.

 

Natasha Dow Schull, a professor at the Massachusetts Institute of Technology, says that the gambling industry is concentrating its efforts on slot machines and video poker machines which she calls “highly addictive”. She has researched and written extensively that the gambling industry has been scientifically developing gambling machines that will encourage gamblers to become addicted. “Player extinction” is an industry goal she writes that means they want the customer to play until they have no money left. Many critics point out that this is the reason casinos dedicate 70% or more of their space to high tech slot and video poker machines.

 

 

Gambling addiction or problem gambling means a persons social life, family life, job and/ or financial security is threatened by his compulsion to gamble. How prevalent this condition is in the society is the subject of debate. Some research points to 1% of the population but other research looking at specific at risk populations such as Native-Americans and Hispanics when combined with other risk factors like low education have found rates up to ten times higher. A response to treatment may depend upon early intervention but often times problem gamblers are not stopped from going to casinos until they have no money left to spend.

 

The type of slot machines that will be introduced into Texas if the gambling measure passes will conservatively create ( if you believe the cause theorists) or facilitate ( if you believe the underlying factor theorists) thousands of Texans becoming problem gamblers. It is more than predictable that the Hispanic community will feel the brunt of this new plague. A study of the effect on gambling on the population of New Mexico found that over 70% of those with gambling problems were Hispanic.

 

What will be the costs to Texas taxpayers for the treatment of addicted players? What will the social service costs for the support of families whose major bread winner spends his or her paycheck at the casino or racetrack slot machine instead of clothes or medicine for their children. It is not to hard to imagine that these costs will not be less than millions of dollars. The discussion items posted by the Texas legislature do not mention any of the “social costs” of gambling but argues Menendez ” it’s  still in the early stages of debate”. He agrees that this is a significant issue that must be addressed.

 

Ten years ago a comprehensive study was done called the The National Gambling Impact Study Commission which looked at the benefits and problems of gambling nationwide. Even though the study was done before more contemporary research confirmed that problem with gambling devices such as slot machines the study concluded “that states should refuse to allow the introduction off casino-style gambling into pari-mutual facilities”. Since that time both the casino industry and science has learned much more about what drives gambling behavior in people. There is an inherent conflict for the good of society when gambling interests are developing technology which will maximize the exploitation of their customers to spend beyond reasonableness and keep returning for more and a government that is facilitating this behavior.

 

I asked Menendez if building casinos could result in the economic disasters of Las Vegas or Atlantic City. He pointed out that what really hurt the Las Vegas economy was the mortgage crisis and overpriced real estate more than the gambling itself.

 

Representative Menendez envisions world class resorts and venues for gambling in Texas but agrees it will have difficulty fully competing with Las Vegas. He says he wants to create places where a viejito can have a little fun. Studies of gambling in Canada and the U.S. support his view and  have shown that for many retired people high quality gambling communities improved the overall quality of life for the area.

 

If gambling is going to work in Texas it will need to be closely regulated. Much more detail and safeguards need to be added to the bill than are present in the current text of the bill in my opinion but at least the bill’s author, Representative Jose Menendez, seems to be on the right track.

 

Thanks for reading Contempo Magazine blog which discusses issues for McAllen, the Rio Grande Valley, and America from a conservative Hispanic point of view. Tony Magaña grew up in McAllen Texas, attended Texas A&M University, served as an officer in Army Reserve, and holds a doctorate from Harvard University. The co-founder of Contempo Magazine has participated in Valley business for over 20 years. He is a member of the National Association of Hispanic Journalists and also writes for the American Daily Review

 

 

This entry was posted on Monday, April 20th, 2009 at 13:28 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.