Casino fever -- You're either for it or against it

Last November, Pownal residents voted two to one in a non-binding referendum for a golden vision of employment opportunity and tax relief that developers say could bring new life and energy to the rural community of about 3,500 souls on Vermont's southwestern borders.

But Governor Howard Dean says the gambling casino proposed for the defunct Green Mountain Race Track in Pownal is a "crummy industry" and a "threat" to Vermont. Dean has promised to veto any enabling legislation, and Attorney General Jeffrey Amestoy, also adamantly opposed to an expansion of gambling in the state, says any chance the governor will change his mind is "non-existent."

For the legislature to pass a bill to legalize gaming is a "long shot" according to Senator Dick Sears, D-Bennington, who will introduce a Senate bill. A two-thirds majority, 20 votes in the Senate and 100 in the House, is necessary to approve a bill over Deans' veto.

Sears says he will introduce the bill so the issue will be debated on the floor, but he is still concerned with the overall quality of life in Pownal, the character of the Pownal valley and gaming in Vermont if the bill actually were to become law.

"But I lean toward the casino because of the jobs," he said January 6.

Now, the heavyweights are fighting to make casino gambling a legislative priority. Lobbyists Steve Kimbell, Robert Sherman and William Shouldice III, and former Speaker of the House cum consultant Ralph Wright, have been hired by Las Vegas developer Eric Nelson, half-owner of the race track, to steer a gaming bill through the legislative process. And in the administration's corner, lobbyists David Wilson and William Gilbert will marshall the anti-gaming forces pro bono -- low-income advocates and business representatives have recently allied to fight the casino.

At stake is a proposed year-around, 24-hour a day, destination resort at Green Mountain, complete with a horse racing track, casino, hotel, restaurant, on-site daycare, recreational vehicle park and entertainment facilities for concerts and boxing matches.

Nelson said the resort could provide up to 1,500 new jobs, 90 percent of them full time and up to 95 percent going to local people, with a salary range of $20,000 to $30,000 per year, up to $100,000 per year for top executives -- an annual payroll of $25 million to $30 million. The state would get 9 percent of the projected $80 million or more gross revenue or about $8 million annually plus a licensing fee of $1 million, and the town would get 3 percent or about $2.5 million annually plus a licensing fee of $250,000.

In a "good faith" gesture that may have backfired, Nelson offered the state $10 million up front-- the first year's tax paid in advance.

Bob Sherman of Kimbell & Sherman said that there was a need to show the people of Vermont that the developer was both serious and committed to the project. He said the idea for the pre-tax payment came from Nelson, and that Kimbell & Sherman, which was retained by Nelson around Christmas, discussed with him the pluses and minuses of such an offer. Sherman said Nelson knew the risks and went with it anyway.

"As far as it being a public relations gaff, I don't think that it is," Sherman said. "It says to people that we're serious and it makes a commitment to that and demonstrates that."

Dean wasn't tempted -- he refused to "sell Vermont down the river."

Why are Dean and Attorney General Jeffrey Amestoy so opposed to a project that would bring much-needed money into a state hard hit by the recession?

Dean has made his position clear from the moment the casino was proposed last fall. He restated it January 13:

"Casino gambling would do irreparable damage to Vermont. We only need to look at other states and cities to see the negative impact of legalized gambling: increases in crime and demand in social services, property devaluation and loss of whole communities. Tourism dollars that now go to ski areas, restaurants and specialty shops would instead go to Las Vegas developers. Casino gambling is a bad deal for our family-oriented, tourism economy. It's a bad deal for Vermont communities. It's a bad deal for Vermont."

And Amestoy said January 12 that allowing gaming in Pownal would be a mistake that would encourage additional legislation:

"The video gaming interests would push, the Abenakis would push, the Northeast Kingdom would seek gaming for economic benefit. Vermont would be swallowed up by gaming interests....It would undermine the fabric of Vermont and does not make economic sense -- the benefits are grossly overstated -- and it would be a bad decision in respect to law enforcement."

Asked if he feared the intrusion of organized crime in the state, Amestoy said, "That's a red flag, but other states that have expanded gaming have experienced an increase in crime."

COULD NELSON REVERSE A 30-YEAR DOWNSLIDE?

But perhaps Nelson, of Nelson Associates in Las Vegas, is the man with the vision, the dollars and the experience in operating other casino resorts to finally realize the potential of the 167-acre race track property.

He is ready to pump $30 million into the project, even if convincing the governor and legislature takes up to three years, he said at a November meeting in Pownal. In answer to residents' questions, he said he would fund any traffic and demographic studies required by the town and state, and the money Pownal would receive in taxes and licensing fees would more than cover any increased police protection and services.

Nelson became half owner of the state's only pari-mutuel race track November 28, forming the corporate partnership ST Megaplex Inc, with John C Tietgens of Clarksburg, MA. Tietgens had purchased the closed greyhound racing facility for $250,000 -- the only bid at an auction sale -- in November 1993 from the Rooney family of Pittsburgh, PA. The Rooneys -- who also own the Pittsburgh Steelers football team, Yonkers Raceway in New York and the West Palm Beach Kennel Club in Florida -- had owned Green Mountain since 1973.

The track opened for thoroughbred and harness racing in 1963 and peaked when it was the only track in the country with Sunday racing. Then, in the 1970s, it began to fail from the gasoline crisis and increased competition from other race tracks and off-track betting sites in the Northeast.

The Rooneys turned to greyhound racing in 1977, which also dwindled, culminating in an abuse and neglect charge against a kennel owner brought after an investigation by the Bennington County Humane Society in 1992. The track failed to open for a 1993 racing season, leaving eight full-time and about 200 part-time workers unemployed -- historically, the track had provided jobs for local young people working their way through school and second jobs for moonlighting adults. At the time the track closed, it had been paying the town about $20,000 in annual racing fees, less than half the amount paid in the track's heyday.

Tietgens intended to bring horse racing back to Green Mountain, where he had once raced his own horses. But he soon realized the thoroughbreds would never fly down the stretch in Pownal again without the financial support of gaming.

He said at the November meeting, "The only race tracks surviving in the country today are those with other forms of gaming. Nelson and Associates has been the only one to make a commitment to Pownal, to do it right."

The only other proposals Tietgens had for use of the property were expansion of an adjacent mobile home park and a low-rent housing project, he said.

JOBS CONVINCED WRIGHT

Former Speaker Wright said he is now convinced the casino development is an opportunity for Bennington County. Before being defeated by Gerald Morrissey for the Bennington House seat he had held for 16 years, Wright said if re-elected he would vote against any legislation to enable gaming.

On January 12, Wright explained:

"The more I thought about it, the more I realized Bennington has been the long-forgotten county in the state. What jumps out of the issue is jobs -- decent paying, with fringe benefits. The loss of Johnson Controls wreaked havoc in Bennington -- we (the administration and Legislature) put together a $10 million package to keep Johnson Controls' 200 jobs here (which failed) -- now we have an opportunity for more than 1,000 jobs. If this were any other anchor industry -- non-polluting, with no toxic waste -- we'd be falling all over ourselves. But it's gambling. We have to be consistent -- we have the lottery, bingo, break-open tickets...This is more than just a casino, but they can't do the RV park, the horses, without money raised by the casino. But what surrounding communities think will be important."

ADVERSE IMPACTS FORESEEN

One neighboring town, Williamstown, MA, already opposes the casino. Williamstown Selectors voted January 9 to write letters to Dean and Representative Charles Palmer, R-Pownal, saying heavy traffic would impact Williamstown. They quoted studies done about 12 years ago in connection with a proposed casino on Mount Greylock in Adams, MA, that said a casino would have adverse economic effects on the region and was incompatible with the existing scenery and cultural attractions.

And what of the 341 Pownal people who voted against the referendum? Although by mid-January there was no organized local opposition to gaming, several residents had made negative comments.

Harry Johnson, a former member of the school board and industrial committee and one-time candidate for selectman, would prefer to see new industry in town, either on the vacant race track land or at the site of the former Pownal tannery. The Planning Commission is considering a new industrial zone that would include the race track.

Johnson said, "Will the track sewer system handle the 10,000 people a day Nelson expects, or will we have sewage leaching into the Hoosac River? People moving into the area will impact the school system -- at the high per pupil cost of education, the town can't afford that. Gambling has a bad effect on working class families. I think when the facts are known, people will vote against it in the final referendum."

Others who have seen the rise and fall of the race track predict the casino resort could go the way of the track and become a "white elephant," leaving Pownal worse off than it is now.

Retired business executive Cleveland Dodge and his wife Phyllis, long-time Pownal residents, said in a letter to Palmer, "We are saddened and disillusioned that you, with a fine record of looking out for the best interests of this town, should have let yourself be hoodwinked by this group of smooth operators from Nevada."

The Dodges questioned how the 97 percent of track and casino customers Nelson said would come from out of state could get to the casino over "poorly built, congested roads, many with 20-30 mph speed limits."

Routes to Pownal are US Route 7 through Pittsfield and Williamstown, MA, from the Massachusetts Turnpike; New York Routes 7 and 346 from Albany and Troy, NY; and Massachusetts Route 2 over the Mohawk Trail and through North Adams, MA from Interstate 91.

DIFFERING BILLS GIVE POWER TO NEW COMMISSION

The gaming bill Palmer will introduce in the House differs slightly from Sears.' It would require a binding referendum vote in Pownal, while Sears' would call for referendums in adjoining towns as well with the vote weighted in Pownal's favor, giving veto power to the host community. Sears' bill would also prevent any return of greyhound racing at Green Mountain. Both bills would prohibit the casino from cashing checks or offering credit -- transactions would be cash only. Working out the weighted referendum could delay Sears' bill until the end of January or early February. He said Senator Susan Bartlett, D-Lamoille, chair of the Senate General Affairs Committee, had agreed to prompt consideration of the bill.

Palmer expected his bill to be ready by mid-January but cautioned against haste: "The $10 million to $12 million coming to the state may look a lot better by the end of the session when we are cutting costs," he said.

Nelson provided a model bill, which Palmer, Sears and the Legislative Council are studying, along with legislation from the states of North Dakota and Colorado. Nelson's draft of the Vermont Gaming Control Act would create the Vermont Gaming Commission, consisting of three members appointed by the governor and confirmed by the Senate.

Commissioners would be US citizens and residents of Vermont and could not hold any elective office in state, county or local government nor be an official in any political party. No more than two commissioners could be members of the same political party. After the initial terms of two, three and four years, the term of office would be five years. Commissioners would receive a per diem of $100 for each day spent in meeting to carry out duties and would be reimbursed for expenses. Meetings would be held at least quarterly.

The commission would hire staff, set up offices, issue licenses, hear appeals from the decisions of the director, make disciplinary rulings, bring civil action against a person who violates the act and make any regulations necessary to carry out the act. Reportedly, Sears sees the new commission as absorbing the existing racing commission, while Palmer would expand the racing commission to include new duties.

Nelson's model would also create the Division of Gaming Control to provide investigative and technical services to the commission. A director would be appointed by the governor and confirmed by the Senate -- the same criteria and terms of office would apply as for commissioners. The director would determine what information is needed for licensing applications, conduct background investigations of applicants, investigate gaming crimes, obtain immediate access to the gaming facility with authority to seize any equipment, hire staff and cooperate with state police and the office of the attorney general.

The act would limit gaming to the Pownal race track, the only site in Vermont that meets criteria: where horse racing has been conducted in the past 20 years; racetrack facilities of at least 100 acres; enclosed grandstand seating for at least 5,000 people, a track of at least three-quarter miles and a compound for at least 500 horses. The criteria would eliminates fair grounds in the state where racing may have been conducted. Sears' bill would limit gaming to a race track that operates a minimum of 60 days.

In the model, authorized gaming would include: any game played with cards, dice, or mechanical or electronic devices; pari-mutuel and off-track pari-mutuel wagering; a race book; any other gambling activity the commission approves. The operator would pay 9 percent of the net win to the state of Vermont and 3 percent to the town of Pownal, to be shared with the county.

So in a year of changes and challenges in Montpelier -- a new Speaker of the House, renewed Republican control in the Senate, the pressing issues of property tax reform, education funding and health care reform -- gaming took an early lead as a high-profile priority.

And the question debated in the state-house and in Chambers of Commerce, Rotary breakfasts, public meetings and private living rooms across the state is whether legalized casino gambling could provide jobs and tax dollars without forever changing the benign, family-centered character of Vermont.

Summing up

Legalized gambling is fast becoming the next "either you're for it or against it" issue in Vermont.

* Legislators this year will consider at least two bills to legalize casino gambling at the site of the old Green Mountain Race Track in Pownal. The lure is over 1,000 jobs to a desperate area in the state's southwest corner, and over $10,000 million a year in tax revenues, which would go to both the state and local government. The people of Pownal want it.

* If that weren't enticement enough, the Las Vegas developer also has promised $10 million up front to the state and has hired some of the top lobbyists in Montpelier to make his case. He even has former Speaker of the House Ralph Wright in his corner.

* On the other side is Governor Dean and Attorney General Amestoy, who see this only as a lose-lose situation. They maintain that the economic benefits will be negligible, if at all, and that it will bring a tidal wave of gaming to the state that would forever change what makes Vermont Vermont.

* The chances of passing such a bill are low at this moment, but what will lawmakers think in May if the state's fiscal situation is a shambles?

Mary Day Bell of Pownal is a writer and editor for The Advocate of Williamstown, MA, and a freelance writer.

Copyright Lake Iroquois Publishing, Inc. d/b/a Vermont Business Magazine Feb 1995
Provided by ProQuest Information and Learning Company. All rights Reserved