BETTING ON THE FUTURE JULY 15, 1996 TRANSCRIPT

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Spencer Michaels reports of the explosive growth of the gambling in local communities.

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Margaret Warner discusses the effects of gambling on local economies and communities.

ANNOUNCER: (Horse Race) --on the outside--Damarilla Della-- on the inside gate Jackpot Justice--

SPENCER MICHELS: In most states, gambling on a large scale began with parimutual betting on horse races.

ANNOUNCER: (Horse Race) --rolling in the dough to win, rolling in the dough.

SPENCER MICHELS: But today the industry extends far beyond the track and includes lotteries, card rooms, Las Vegas-style casinos, and Indian gambling, complete with slot machines.

Nationwide, the growth of gambling has been enormous. Last year, nearly half a trillion dollars in legal bets were placed, a 2800 percent jump in two decades. Prior to 1978, legal gambling, except for horse racing, was confined to Nevada. The Las Vegas strip, today an up-scale fantasy land designed to lure families to the desert, became a Mecca for anyone in the country who wanted to gamble. Then gambling moved closer to home.

First, it was in the form of lotteries. Thirty-six states now have them, using some of the money to help meet their budgets. Lottery revenues have risen more than 800 percent since 1982. (music in background) Today every state, except for Hawaii and Utah, allow some form of gambling. Ten states permit casinos, where Las Vegas-style games are played, and that figure does not include Indian-owned gambling parlors. Some towns like the mountain communities of Black Hawk and Cripple Creek, Colorado, have been totally transformed into gambling establishments.

In the Midwest and South, six states have initiated river boat gambling casinos, playing on the romantic image of the boats which used to ply the Mississippi. But these boats are as likely to stay at the dock as not. Gamblers don't seem to care. Towns and states justified the floating casinos as a way to increase government revenues and promote riverfront development.

In California's beautiful agricultural Kapay Valley, 40 miles west of Sacramento, the Rumsey Band of the Windtun Indians, a tribe of just 32 people, does a gold rush business in its casino. Gambling on Indian reservations like this makes up the fastest growing sector of gambling across the nation. A total of 220 tribal gambling operations, allowed because sovereign Indian nations do not fall under state jurisdiction, bring in an estimated four to six billion dollars a year. That's 10 percent of all gambling revenue.

SPENCER MICHELS: Why do you come?

WOMAN: We do it. So it's a pastime--

SPENCER MICHELS: But the growth of gambling is not without its detractors. Anti-gambling activists, members of the National Coalition Against Legalized Gambling, met last fall in Orlando to strategize. Their ranks include members of the Christian Right, who often object to gambling on moral ground, and liberals, who believe gambling has high social costs, including poverty, addiction, and crime.

SPOKESMAN: Federal investigators are looking at whether state legislators sold their votes to gambling interests--

SPENCER MICHELS: These activists are especially concerned about the expansion of gambling, according to Marilyn Whitney, a professor of economics at the University of California at Daymouth.

MARILYN WHITNEY, Economist: Some fear that as more and more locations permit gambling there will be the domino effect. Other nearby localities feel that they have to also permit it in order to stem the flow of money out of their communities.

SPENCER MICHELS: Gambling interests want to keep competition away, while at the same time they oppose regulation of their industry, so they have lobbied heavily to affect the political process in dozens of state houses. California State Senator Philip Isenberg says his fellow legislators love dealing with gambling.

PHILIP ISENBERG, California Assemblyman: Well, it means campaign contributions from a group of really rich business people who have nothing but cash in their pockets. I mean, understand, this is a business that doesn't generate anything except cash as its value, so politicians love it. They like the fights. They want to see ‘em come back each and every year. They want to solicit the campaign contributions, and they love to finesse, stroke, manipulate, and deal with the issue of gambling.

SPENCER MICHELS: Lobbying on gambling extends to Congress as well. A bill to create a commission to study gambling for two years has passed the House and is before the Senate. If the bill becomes law, commissioners will look at all aspects of gambling across the country; economic, moral, and social, with a possible eye toward future regulation.

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