Casinos bet big on local voters; bingo halls hope for an update

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By Jason Blevins, The Colorado Sun

Colorado’s biggest casinos are rolling the dice in November, hoping that the state’s roughly 4.1 million voters will approve an initiative that would give a little more than 2,000 residents control of casino bet limits and games. 

Amendment 77 would give voters in Colorado’s gaming hamlets — Cripple Creek, population 1,300, Central City, population 750, and Black Hawk, population 125 — the ability to increase maximum bets above the state’s $100 limit and add new games beyond slots, blackjack, poker, roulette and craps. Support for Amendment 77 is almost wholly funded by casinos hoping the elimination of betting limits and new attractions would grow the appeal of Colorado gambling as casino operators grapple with impacts from the pandemic shutdown. 

While Amendment 77 arrived on the ballot via a voter petition, another gambling measure, Amendment C, landed on the ballot with overwhelming support from Colorado lawmakers. Amendment C — sponsored by a bipartisan union of urban and rural legislators — would buoy a flagging bingo industry in the state by allowing bingo license holders to pay game operators and eliminate a law that requires charities to be at least five years old before securing a bingo license.

But first, the casinos.  

The last big vote on gambling in Colorado came in 2008, when voters approved Amendment 50 — 59% to 41%. Amendment 50 gave residents of the three gambling towns a chance to vote on a measure that allowed casinos to stay open for 24 hours, add craps and roulette and upped the maximum bet limit to $100 from $5. (Residents voted and approved the casino-backed proposals.) 

Amendment 50 generated about $10 million in additional gaming revenue a year, 80% of which went to casinos, and the rest was split between Colorado’s junior colleges, Gilpin and Teller counties and the gambling towns. 

Amendment 77 would divide additional revenues similarly, with 78% going to community colleges, 12% going to Gilpin and Teller counties and 10% to Black Hawk, Central City and Cripple Creek. The estimated impact of Amendment 77 has not been determined because it will depend on local voters deciding on casino bet limits and new games. 

The economic recession settled on Colorado following that 2008 vote and the amount lost by casino gamblers fell by more than 10%. Before this year, that was the largest decline in casino revenues since gaming arrived in Colorado in 1992.

It took nine years for gaming in Colorado to fully recover from the 2008-09 recession, finally topping the highpoint of 2007 in 2016. 

And the pandemic has impacted casinos and gambling revenue more than the recession. 

The shutdown of casinos in March and closures in April through June decimated gambling revenues. For fiscal year 2020, which ended July 31, gamblers in Colorado casinos lost $617.7 million, generating $80.3 million in taxes. The pandemic-addled 2020 decline in gaming revenues — casino revenues dropped by nearly 27% and gaming taxes by 36% — marks the steepest year-over-year drop in the history of legal gambling in Colorado. (In fiscal 2019, casinos saw gamblers lose a record $840.3 million, generating a high of $125 million in taxes.)

Who’s in and who’s out?

Arguments for Amendment 77 include boosting travel and tourism jobs in communities hard-hit by the pandemic as well as giving local residents more control of gambling in their cities.

Community colleges support the measure, saying that additional revenue will bolster financial aid and workforce development programs while providing educational and job opportunities during the economic downturn.

Amendment 77’s sponsoring committee, Local Choice Colorado, argues that without the increase in betting limits and games, high-rolling gamblers in Colorado might venture to Nevada to gamble. A handful of Black Hawk casinos have evolved into resorts, with hundreds of hotel rooms, restaurants and attractions other than betting, as a way to lure gamblers who might otherwise be wooed by Las Vegas.

And those are the casinos that are funding the Amendment 77 campaign. The state’s largest casinos are all in on Amendment 77. The owners of Black Hawk’s largest casinos have ponied up the lion’s share of the $3.9 million raised to support the amendment.

Penn National, which owns Black Hawk’s 33-story, 1,250-slot Ameristar Casino Hotel has directed $950,000 into the campaign. The multi-state casino owner is flush right now, having weathered the shutdown of casinos well thanks to an investment in sports betting, which has swelled Colorado’s gambling tax coffers during the pandemic. Penn National has seen its stock price almost triple since January, when it bought a 36% stake in Barstool Sports. The Barstool Sportsbook gambling app launched last month, just in time for baseball and basketball playoffs and the beginning of the NFL season.

Caesars Entertainment, the owner of Isle Casino Hotel and Lady Luck Casino in Black Hawk, contributed $1.1 million to the Amendment 77 campaign in September.

Monarch Casino Black Hawk, which is in the final phase of a $300 million expansion at its 23-story casino hotel, contributed $950,000 to the Amendment 77 campaign.

Gilpin County last year had projected 2020 gaming tax revenue to top $11.6 million, marking the sixth year the county had harvested more than $10 million in gambling tax revenue and topping the previous high set in 2019. Gaming accounts for most of the county’s budget and early estimates show the county losing roughly $1 million a month during the three-month shutdown, leaving it pacing well behind its projected revenue for the year.  

The story is the same in all three gambling towns, with Cripple Creek, Central City and Black Hawk slashing millions from budgets after the sudden evaporation of gambling tax revenue. The shutdown came at the end of the fiscal year when casinos revenues reached higher tax assessments close to 20%, meaning the communities that rely on casino taxes lost their biggest months of revenue harvesting in April, May and June.

Cripple Creek’s city council has come out in support of Amendment 77 as the city endures record declines in revenues and casino traffic. The city’s casinos got bad news this week as state health officials denied a request for a variance that would allow the return of casino table games. Black Hawk and Central City were able to open table games in mid-September after state health officials moved Gilpin County to the “Protect Our Neighbors” status, which imposes the fewest restrictions under state pandemic protocols.

Opposition to Amendment 77 revolves around the impacts of gambling addiction and how increased gambling might affect communities neighboring casino towns that aren’t getting additional revenue to offset increases in traffic, drunk driving and gambling addiction. Gilpin County commissioners have chosen not to take a position on the ballot question, citing in part a community that is split on the promise of more gambling, Gilpin County Commissioner Ron Engels said. 

Saving bingo from “a death spiral”

Another gambling ballot measure, Amendment C, would ease some old laws regulating charitable gambling involving bingo and raffles. 

Amendment C would allow nonprofits to pay workers who operate charitable games and it would drop a requirement that charities need to have been around for at least five years before applying for a license to run bingo contests and raffles. 

Bingo landed in the state constitution in 1958. Other than an adjustment to allow electronic bingo in the mid 1990s, little has changed for Colorado bingo in more than 60 years.

And in those six decades, the game “is in a death spiral,” according to a release by the Colorado Charitable Bingo Association, which registered with the state this month to support Amendment C but has not reported raising or spending any money. In the 1980s there were 49 bingo halls in Colorado producing about $129 million for charities, today there are 11 halls producing $23 million, a statement from the association’s representative, Corky Kyle, said. 

Eliminating the five-year waiting period for nonprofits wanting a bingo license and allowing nonprofits to compensate volunteers who run the games and raffles would help the bingo industry “reinvigorate and reinvent itself and stop the downward spiral of bingo,” the association statement reads. 

The state estimates approval of Amendment C would increase state spending by about $83,000 in 2020-21 and $37,500 per year after that as the state regulates new licensees, adjusts reporting tools for bingo-playing nonprofits and processes new bingo licenses. The state estimates approval of Amendment C would yield about 50 new bingo license applications a year, generating about $5,000 a year in fees. 

Opposition to Amendment C, according to the state blue book voter guide, holds that the professionalization of bingo games and raffles would undermine charitable mission by diverting contributions to game operators. Supporters argue the paid operators would reduce the burden on nonprofits to recruit volunteers and that expanding access to bingo games would generate additional funding for nonprofits.