Interview: Frank Fahrenkopf

Q: Describe the membership of your organization.

Frank Fahrenkopf, President, American Gaming Association and former chairman of the Republican National Committee. He was interviewed in the early spring of 1997. Fahrenkopf: The main membership are those individuals who are involved in the hotel/casino industry. 99% of those individuals are publicly held companies. They're listed on one of three major public exchanges, regulated by SCC and, of course our, primarily, owned by institutional investors.

I'm talking about the Hiltons, ITT -- which owns Sheraton and Caesar, Circus-Circus, Mirage, MGM and so forth.

We also have a growing sector of membership for suppliers to our industry. I mean, this is -- when you start thinking about a hotel and a casino, there's carpeting, there's drapes, there's furniture, there's glassware, there's linens and so forth. So, we also, have those individuals who the industry assists -- either directly or indirectly -- have a classification of membership.

We also have most of the major investment banking firms in the United States, from Goldman Sachs, Merrill Lynch, Bear Sterns, Deutsche Bergen on down the line ... because, of course, they're very involved in some of the major financings that are going forth.

The goal, if I could say that, of my organization as I try to grow it, would be to have as members anyone who directly -- any businesses that directly or indirectly are involved with the casino entertainment business in the country.

Q: Why is gambling so attractive to so many people?

Fahrenkopf: Well, from looking at surveys that have been done of why people like to come to Las Vegas or go to Reno or go to Atlantic City.....there's a certain excitement of being in one of these major hotel/casinos ... the lights, the bells...one of the great things is hotel rooms. They're relatively inexpensive compared to other places in the country. Food...you can eat lavishly at these places at half the price or a quarter of the price of what you would pay, for example, in one of the major other cities in the country. And, it's a place to get away.

And it has changed. I think that what we're seeing is that people come to Las Vegas now -- not only just to gamble. There are many people who come just to play golf, come to play tennis. They like the weather. So it's not just, anymore, the gambling that attracts them.

When you look around this town and you see some of the things that are being built -- I mean, New York, New York --it's something to do. Somewhere to go. It's so interesting. Here, at this hotel, they've just built this new expansion of masquerade village with all kinds of nice shops and so forth. So, it's a combination of things.

But, I guess, basically, from most of the surveys that I've looked at, it's excitement. It's a way to use your leisure time and disposable income to enjoy yourself.

Q: You mentioned New York, -- we were here for the opening of New York, New York. And one of the things that I found rather amazing, it was supposed to open at 5:00 in the morning, but I guess shortly after midnight there were so many people already waiting, in line, that they had to open it to not create a hazard.

And I tried to understand -- why people appeared to be willing to wait in line six hours when they could go right next door, all night long, and play the very same machines. What was going on there? What was it that created that?

Fahrenkopf: I think, first of all, what sort of happened in Las Vegas is, when one hotel has been built and it has a unique decor, for example -- when you ride up and down the Las Vegas strip, I mean, you can see on one hand the Egyptian Pyramids. Next to that, what would be a Snow White's castle in all it's brilliant colors. Next to that, the MGM, the largest hotel in the world with a roaring lion out front as a doorway. Then you see New York, New York with it's tremendously creative skyline. It's almost sort of trying to top one another.

You can go on down the strip and see pirates actually battling, much as in the old ride in Walt Disney World. Or you can see a volcano erupt. It's just...it's sort of unusual. You don't see that every day in your hometown. And I think it's that -- that's that excitement factor, I think.

Q: So, it's the showmanship or something that creates that...

Fahrenkopf: I think there is a showmanship, I think you're right. I think that's really what it is. And, remember, this is also a business. And, the individual companies are competing against each other to try to attract customers to come in. Customers to come in and gamble. Customers to stay in their hotel, eat their meals there and so forth. So, it's no different than any other business in trying to attract customers away from, maybe, a competitor by being ingenious and by being innovative.

Q: How do you explain the phenomenal growth of the gambling industry in the last five years?

Fahrenkopf: First of all I think the real change -- if you had to look at what made the change, it really -- it happened longer ago than that. It happened in 1963. Because in 1963, New Hampshire became the first state in modern times to implement gaming as a means of raising revenue with the New Hampshire lottery.

And, as the lottery grew -- from the standpoint of we're now in a situation where we have lotteries in 36 states, plus the district of Columbia. It was, in effect, government being involved in the gaming business.

And, I think it was part of the -- don't get me wrong -- the legitimization...at least in the minds of some people who might have thought there was something bad about gambling because of the old images. There are still people who are morally opposed. And, I mean, we live in a great country. People have a right to stand up for what they morally believe to be right or wrong.

So, you have that. That was clearly one of the developments. Then, I think you had another factor was Native American gaming. In the mid '80s when the Supreme Court, and then Congress created certain standards whereby tribes could get involved in the gaming business. And, as you know, there are probably over 200 tribes that are now involved in gaming operations across the country.

The growth, the rapid growth that we would call the new river boat age, when in the late '80s and early '90s you had six states turn to river boat gaming. That was really an impact of economics.

You had a situation where, at that time, the economy in those days was not particularly good. You had state treasuries with revenue difficulties. And, you know, state legislators and governors don't like to raise taxes on their voters and their citizens.

Gaming is a very labor intensive-type industry. When a casino opens, there are a lot of people who are hired. And they tend to be people who are at the lower end of the economic spectrum -- who have most trouble getting jobs. And so, it was a way that those states turned to that to, number one, impact their treasury because this is an industry that tremendously taxed.

Not only do they pay their normal, corporate taxes, but on top of that, there are many times very heavy added taxes. In some states up to 20, 25%. So, it's a way to put money in the state treasury, solve unemployment, bring new capital investment in -- and that's where the main reasons, I think, that those jurisdictions turned to gaming as a means of resolving economic problems.

I think that's really -- when you really look at the latest vote in the state of Michigan to allow casinos in Detroit. Well, I mean, for the last 20, 30 years, people have been trying to figure a way to take downtown Detroit and rejuvenate it. Have people make capital investment and provide jobs. And nothing has worked.

And I think the real reason that the people of Michigan decided, they said, "Look, it's economics here." -- 'course also, watching those tailpipes go under the river, over to Windsor where the Canadian government, the Ontario Province has a casino -- seeing, you know, dollars that wouldn't stay at home and could help rebuild Detroit. So, it tends to be economics driven.

Q: Can you talk more about the government , which has played a strong role in terms of promoting gambling's growth.

Fahrenkopf: I think what happened was, when more and more states started to have lotteries, you, in effect, have government being involved in the gambling business. And, with that, came, I think, a change in the public perceptions. I think a lot of it also was the coming of publicly held companies. When, you know, it's Dial/Hilton or it's ITT or it's MGM or it's Circus-Circus -- and every one -- these are publicly held companies. They're regulated, not only by states, but by the Securities and Exchange Commission.

There's always been the desire of man to play games of chance. I don't know of any archeological dig that hasn't found some game of chance -- that was thousands and thousands and thousands of years ago. We know that more and more people are going to particular casinos. 55 million visits were paid to casinos in 1995. So, it's sort of been a confluence of a lot of different factors.

But I really think that New Hampshire starting the lottery was the start of changing attitudes and perceptions.

Q: I happened to live in Boston in the early '60s and I remember, distinctly, the people in Massachusetts, "Oh, my God. We're losing all this money to New Hampshire. What are we going to do?" And, of course, eventually what they were going to do was create the Massachusetts Lottery. There has been a lot [of] that me-too-ism, in this, as well, that created that momentum.

Fahrenkopf: Yeah I think that's the case. We're seeing some of that now, particularly with the para-mutual industry. The para-mutual industry has been [having] difficulties -- [the] horse racing industry has been having difficulties for a number of years, solely unrelated to anything else.

And what you're now seeing is sort of a real battle within that portion of the gaming industry. You have many people in the para-mutual industry who are saying that they won't be able to survive unless they can have slot machines at the tracks for people -- to occupy them between those two minutes of action when the horses are running around that track.

But, yet, you have others in the horse racing industry who want to keep it pure, as the sport of games. And, so, you have a conflict. We're seeing it right now, very close to Washington, the state of Maryland, where those individuals that run the tracks there are saying to the government and to the legislature, "We have to have slots because Delaware now has slots. And since Delaware slots, more and more people are going to the tracks in Delaware -- which means that the purses are bigger, therefore the best horses and jockeys want to ride there, because the purses are bigger." So therefore, it's -- in many ways, with many jurisdictions, it's sort of been a reverse, keeping up with the Jones' -- we're going to lose money. So, there's a conflict that's out there.

Q: And an escalation, then, results. Because one does it, the other responds and on and on.

Fahrenkopf: Yeah, although, you got to understand that most of the decisions that are made -- The question has always been -- it's not gambling yes or gambling no -- it is, do we want to add to the gambling that we already have in our state -- a different mix? We already have a lottery. Do we now want to have horse racing? Or, we already have casino gaming, do we want to add a lottery? And so it's always a balance of that because every state but two has some form of legalized gaming.

And what you see, really, in some of the efforts where these things are defeated -- while the anti-gaming moralist would like to say they're David versus Goliath and they're taking on this industry and they're winning these battles. Fundamentally, what the majority of them are, are won or lost based on the economics in that jurisdiction, whether new income is needed.

Secondly, it's usually one aspect of the industry opposing a new form of gaming in that industry because it may hurt them. For example, when a proposal was put forth in Maryland for a river boat-type gaming, the main opponents of it was the horse racing industry and horse breeding industry in Maryland who felt, of course, that if casinos came on-line [then] people would go to the casinos rather than going to the track. It would have a negative effect.

New York is a perfect example. The New York State Senate was just considering whether or not to consider a bill in that state to amend the constitution to allow casino-type gaming. Really, there was only one -- which you would call major -- gambling company involved there. It was Donald Trump. And it was against allowing New York to have that because he was afraid it would hurt the business in Atlantic City.

So, usually, it's the first two factors -- just the economic need, as dictated to the state legislators and governor and, secondly, not so much anti-gaming opponents, but one part of the industry opposing and expansion by another part.

Q: What is the most misunderstood thing about this industry, do you think?

Fahrenkopf: I think there are...stereotypes that are out there that look back 30, 40 years ago, which are perpetuated by some movies, that come out of Hollywood, you know? "Casino." And you go back to the "Godfather" movies. I mean, for years, the FBI and major law enforcement have said there is not, today, in -- what we call the entertainment, casino/entertainment business -- an organized crime penetration. It's not there.

A lot of the opponents love to drag up the old stereotype and throw it out. So, that's number one. Secondly is the question whether or not having a casino or gambling in a particular community attracts what we call street crime. That there's something inherent, something endemic about gambling that creates street crime -- people are going to get mugged. There's going to be larceny and so forth. And I think that's been proven over the years, by law enforcement, to be not true.

It's nothing inherent in gaming. Any endeavor, any enterprise that attracts large numbers of people... the crime rate at Orlando went up. It wasn't anything that Mickey and Minnie were doing that caused it, it was just that it was a draw of people to a community. Branson, Missouri is one that I use quite often. A wonderful, wonderful town in the Ozarks with country music. They pride themselves as being the buckle of the bible belt. And very limited alcohol, certainly not in any of the theaters that are there. It's now a country-western Mecca. And their crime rate went up.

It wasn't because of anything that's happening there. It's a very safe place. But, what you do is when you draw large numbers of people to a community, you are going to have street crimes. It's not -- doesn't have anything to do with gambling, inherently.

I think the one that I worked the hardest on, however, has to do with the so-called problem of the compulsive or problem gamblers. The experts tell us -- the counseling groups and physicians who spend time on it -- that it's somewhere between 1 - 5% of the population. People who can't help themselves and will go in and gamble away their money.

The opponents of gaming say, "Well, these people then, they go out and they commit crimes and they go on welfare and therefore they are a drain on society. And therefore we shouldn't allow this to go on. And that's the reason to stop gambling.

Well, forgetting for a moment whether the fact that 95% or more, of the American public doesn't have a problem. Our approach to this was we should take this on head on. And the industry has. When we started the American Gaming Association, one of the first things our board did is said, "Look, if there's a problem out there -- regardless of how small it is -- we have an obligation as corporate citizens to do something about it." And they are doing something about it. They're putting a million dollars a year into what we call the Center for Responsible Gaming, which is located on the campus of the University of Missouri in Kansas City.

The Board of Directors in the center is half industry and half -- the leading people, today, in this country, dealing with problem or compulsive gaming -- physicians, doctors -- former secretary of HSS. The people who really work with this.

Now, we don't do research ourselves, because we know, any study that we do that says American Gaming Association on it, people are going to throw it up on the shelf. What we do is we take that money and we make grants to institutions, that are, hopefully, beyond approach in anyone's mind, to do work and study.

The first grant was just recently given to Harvard University's Medical School Addiction Center to look at all the evidence that's out there to try to find solutions to this problem. This is different. There is no analogies that can be made with tobacco or alcohol or drugs.

In those addictions, people are ingesting a foreign substance into their body. With problem or compulsive gaming, it's more akin to the problems -- I read more and more about and see on television more -- of people who have those little plastic cards, called credit cards and can't control their spending. It's compulsive behavior. And not enough study has been done of that.

We, as an industry, are stepping up to the plate. We're putting our money where our mouth is, and, hopefully -- and that's why I'm so supportive of the federal commission when it gets up and operating because the National Academy of Science is charged to do that research and come up with some solutions and answers.

Q: The arrival of the publicly held companies, the Fortune 500 companies, the ITTs, the MGMs, the Hiltons....before 1989, you couldn't get a mainstream, Wall Street money in this industry. Now, not only can you get, they're throwing it at you. What happened to make that possible, for them? Because ten years ago, there would have been a stigma for ITT to come into this business. This is true?

Fahrenkopf: I think you're right.

Q: What happened now, to make that not only not a stigma, but a real asset for ITT to be in this business?

Fahrenkopf: I think the American people did it. They voted with their feet. They -- as I said -- we start back in 1963 with the legitimization -- and I don't mean that in a negative way -- but, certainly, in public acceptance. And then, as you know, these companies look more and more, see that they're publicly held companies; see, in fact, that they're well run; they're managed by professionals -- people who have gone to business school. I mean, the people who run these companies today, I mean, they have to answer to the Securities Exchange Commission. They have to answer to shareholders. They have to answer to the street.

And I think the influx of some of the brightest business men and women who are now involved in running these companies and have the ability to go sit down on the street with whether or not it's Goldman Sachs, or Bear Sterns or whoever it might be and convince them that number one, it's a legitimate business. It's run an operated in a very, very careful manner, professionally run...

I mean, the people who run these things --- these are very talented business men and women who understand the bottom line, understand the responsibility they have to shareholders and regulators.

Q: Are we now saying that that's far and away the minority and it doesn't matter anymore? And that's why a publicly held company which used to be extremely sensitive to any kind of negative is willing to embrace gambling as a business?

Fahrenkopf: I don't think that's right because I think those people who are the moralists and who, you know, are exercising their constitutional rights, living in this great country, to oppose something that you're morally opposed to. They're not -- they haven't changed. And if they've been with us since the Revolutionary War. I mean, that hasn't changed. There are certain religions that have, as part of their doctrine, that gambling is bad -- all forms of gambling. And God love them, that's their right to do what they can to affect what they believe in.

What I think is most Americans have -- in the middle -- who really -- they're not morally opposed to it but, you know, thought that there was something bad about it, something unseemly about it. That's where the change came.

And it's the penetration into those people, who have voted not only with their feet by going to casinos, but also have voted with their wallet by investing in the stock, because they are publicly traded stock and well run and well managed companies. And they're a good investment.

Q: Tell me about the Arthur Andersen Job Study. Can you boil it down to a simple statement, or two, about what it came to tell you?

Fahrenkopf: Well, one of the arguments that anti-gaming activists have made for years, is that gambling tends to be -- they use the word, cannibalistic -- that... when it comes into a community, what it does is it doesn't create any new wealth or doesn't bring any new money, it just takes money away from other business. That argument has been out there for a long time and kept being pushed by anti-gaming opponents.

We wanted to take a hard look at that because we didn't believe it was true. Arthur Andersen did a macroeconomic study of the United States, going into those new jurisdictions and found that that is not the case. That overwhelmingly what's happened, is the disposable of the income of the American people has gone up dramatically, and gaming is only taking a very, very small part of that. And so it is not driving. It is not cannibalistic.

And, in fact, what it has done -- in most of the markets where it's been looked at--it's actually helped other businesses. Now, that's not to say, that if a casino comes into a community and opens up and it has wonderful restaurants that, you know, some guy whose had a family restaurant down the road for a hundred years, hasn't been able to compete.

But that's no different than if a new mall comes into a community. And in that new mall there's modern motion picture center where there's six or seven screen. There's a new shoe store. There's a new restaurant. When that new mall comes into a community, that old theater that was once there; the old shoe store; the old restaurant are likewise going to suffer. I mean, it happens to be a free market, capitalist system.

And so why the Arthur Andersen study was important -- not only was to show that there's a tremendous, positive financial impact to businesses and to the state and local jurisdictions by way of taxation -- but that it is not cannibalizing other businesses as the opponents have said for so many years.

Q: Now, critics who have looked at that study....say, Arthur Andersen -- that's the same firm these guys have been using for years. They did all the numbers when they tried to go into Chicago and those are made up numbers because, you know, they were paid to make the study.

Fahrenkopf: Of course, they're going to say that. But what we say is, fine, take a look at the Arthur Andersen numbers. If you think they're wrong, come on .... Look at them. Verify them. If they're wrong, show where they're wrong.

Likewise, what I want to do is when a community -- and this is normally how this comes to a head -- if a state or local community are considering a gaming expansion, you have the opponents of gaming who have been out there for five or six years, putting out this false economic information. What I'm saying to people who make that decision [is], look, make a decision. Whatever you decide is fine. If you don't want new gambling in your state, that's great. But make an informed decision. Have before you all the facts. And don't just take what I say as being true or the other side. Verify it. So I said, go out, talk to people in Tunica, Mississippi. Talk to the Mayor in Joliet. Talk to the people who are involved. What has it meant to their city?

Because, now, we really have the proof in the pudding, in many ways. For a long time, the opponents used economic models that were created by a couple of university professors that ....led to the conclusion that the social costs of gaming exceeded the economic benefit.

Our approach now is, look, you don't need to rely on economic models anymore. Go to where the rubber meets the road, where we've had gaming in some of these jurisdictions. And talk to those people. Look at welfare rates. Look at unemployment rates. Look at AFDC. Look at all these factors. And make up your own mind. And then, cast an informed vote. That's all we're saying.

Q: But is there not a certain type of crime, though, that does gravitate towards gambling?

Fahrenkopf: I have seen no evidence of it, at this point of time. We've looked at the studies -- and a lot of studies have been done. And I'm not an expert in that particular field. But, I know that the opponents say that... there is a specific type of crime. They usually say it'll be larceny. But that's true with all crimes -- or crowds. I mean, you do have lar- I mean, pick pockets and people who want to steal have to go where there's people. Because where there's people, there's money.

The prostitution question...I have seen no evidence that would indicate that prostitution is any more of a problem here than in any other place. Now, the difference, I guess, ...is that here you have, you know, many hotels and so forth.

Q: This was always called Sin City for a reason. They were all the sins that you could do in one single place. That happened to be one of them.

Fahrenkopf: But, you know, I've lived in a couple places around the country. There are prostitutes in New York. There are prostitutes in Orlando. There are prostitutes in Miami. There are prostitutes in a lot of places.

And that's also an industry that's been around a long, long time. And, as to whether or not it's more attractive to places where's there's gambling, inherently, than there where are other -- I mean, many military bases there's not a lot of gambling going on, but you'll find a lot of prostitutes around military bases where you have large numbers of men. So I'm not sure you can make that statement.

Q: Well, we were talking recently to a lady who's opposing a card room in her community in California, and she says, well, this is a residential community, but we're going to end up having pawn shops, massage parlors, check cashing places, all these things that don't necessarily belong in a residential community. You're saying she's wrong?

Fahrenkopf: Well, no, but I think that's easy to find out. California's had card rooms for years. I mean, look at the new jurisdictions. Go to card rooms that have just been in place say for the last five years and see whether it's true.

I get so frustrated with these people who throw out this stuff without any verification, without any research to back up what they've done, and then when we try to come forward, now, to say that Arthur Andersen's going to jeopardize their reputation, because we're paying them -- I found it hard, because it will come back against them many times over from the lack of candor in their company and lack of confidence in their company.

Q: We're also talking to the Attorney General in California. Attorney General and the Governor in California -- very opposed to gambling...

Fahrenkopf: ...Very opposed to casinos.

Q: ...Gambling.

Fahrenkopf: Well now, remember -- the best example I can give is a few weeks ago -- actually it was a month or ss ago, I had the opportunity to go on Face The Nation, Bob Sheiffer's show, and George Voinevitch, the Governor of Ohio, was on the show. And he, as you know, opposed the initiative in Ohio in the last election. And George was saying that gambling is bad because it causes crime - the classic old connards about gambling. And he says so that's why gambling's bad.

And I had to point out, that in the state of Ohio, the Governor himself runs a two billion dollar a year gambling business, the state lottery, that they have just expanded their tracks in the state of Ohio, and of course, if you're the Governor, and you're making your budget out, you make your budget out with projections of what's going to be brought in from revenue streams. And anything that's going to come along that might damage or [unintelligible] that revenue stream, you don't want, because you have a responsibility to govern.

And so it's not -- you got to realize there are different types of gaming and they are competitive with each other. And so people oppose different gaming for many different reasons. California happens to be a very specific issue, where the Governor and the State Attorney General have tremendous problems with the Indian gaming question. It's one of a number of states. You could also go to Arizona, you can go to New Mexico, there are problems brewing out there as to what control the state can have over Indian gaming, what regulations can be in place, what the scope of gaming can be that the Indians can in fact operate within a state. So that's a little different.

Q: So you guys know there's a measure of hypocrisy in the states coming down hard on the whole question of casino gambling.

Fahrenkopf: Not all. I mean, there's no question -- there's no doubt in my mind, for example, that George Voinevitch is opposed to the Emile Moore Grounds. But there's also in there the fact that he also wants to protect the other gaming. If gaming is so bad, well then, why isn't it all bad? If it's immoral, why isn't it all immoral? So in many places you want to keep the status quo, because the status quo's comfortable.

Q: And the status quo includes the state lottery?

Fahrenkopf: State lottery, or tracks, or whatever it might be.

Q: That creates revenue for the state...

Fahrenkopf: Yes.

Q: As opposed to taxation. Do you think the state should be in the gaming business?

Fahrenkopf: I have no problem morally or ethically with the state having a lottery. As you know, it's part of the very fabric, of the very beginning of our country. George Washington's army was clothed and the rifles and bullets were bought with revenue, and that gaming revenue was from state lotteries put together -- well, they weren't state, they were colony lotteries, that the thirteen colonies put together to raise money to arm their civilians to fight the Revolutionary War. So, I mean, we wouldn't probably be here as a nation perhaps if the lotteries hadn't made that great contribution, so I see no problem with it.

People have the right to decide what they want. And states have the right. One of the things that I hope is re-enforced by this gaming commission, when it's done its work, is the conclusion that was reached by the last federal gaming commission that was in the late seventies, when the commission said very clearly, that the question of whether or not a state ought to have gaming, what type of gaming, the nature and scope of it, is a states' rights issue under our constitution, and it is not a federal issue. And the people of a state, or a local jurisdiction within a state, if they're fully informed, and they make a judgment, so be it. That's what this country is all about. So I have no moral problem with state lotteries or any other type of state sponsored gambling.

Q: You're not a gaming man, but if you had a choice of playing the slots, playing the craps tables, or buying a lottery ticket, which one would you do?

Fahrenkopf: Well, you got to throw in the stock market, because I'll tell you, that's the biggest crap shoot of all time, trying to guess what's going to happen day to day in the stock market. I'm a sports nut, so what I probably would do is, I would go to one of the sport books that we have here in Nevada, and bet on my favorite football team or baseball team on the ball game here where it's legal.

Q: The odds on the lottery are horrendous.

Fahrenkopf: Well, statistical odds are that -- I'm quoting from some studies that have been done by some of the gaming magazines -- that, if you walk into a casino, the casino out of a hundred dollars is gonna owe maybe eight or nine dollars. You're going to walk out over a period of time gaming with more than ninety percent that you walked in with. If you go to a horse track or dog track, they're gonna hold about thirty three dollars, and you'll walk home with about sixty six dollars. But lotteries -- the odds of winning the lotteries are around fifty percent.

So, you know -- but again, people gamble for different reasons. Some like to go in a casino and like to hear the bells going off. Others like to go to their seven-eleven and buy a lottery ticket picking the numbers of their childrens' birthday, their anniversary day, or whatever. So different strokes for different [folks].

Q: Tom Grey says, "You people are predators. You're predators." Are you predatory?

Fahrenkopf: That's again -- that's part of the cannibalization argument that he's constantly making. I always say to Tom, "Tom, it's easy to say that, but put your money where your mouth is from the standpoint, what evidence do you have? Let's put it up. Let's look at it. Let's let this commission decide it. You come in, Tom, with whatever evidence you have -- or anti-gaming opponents. Make your case to this commission. We'll come in with ours. And they can get independent people to look at -- and I'm willing to let the cards lay on the table. And what it shows is what it shows."

But, again, the anti-gaming people represented by Frank Wolfe and the Tom Greys of the world..... It's primarily moralistic. Now, they changed their tune. They learned, about three or four years ago, that arguing it's... -- it's something wrong -- it's unmoral to gamble -- that wasn't selling with the American people. Most American's resent other religious leaders ... trying to tell them what they should or should not do.

I'm a Knight of Malta in the Catholic church. I mean, I don't need Tom Grey or some other people in religion telling me what's right or wrong. You know? I think I have my own moral code. Hopefully, it's one that, the good Lord willing, will pass favorably on when I get to see him. I don't need help from the Christian right where other moralists [are] telling me what ought to happen.

Most of what Tom or other opponents will say is their evidence, is these economic models that have been created by come anti-gaming university professors. And I say, "Look, those models were fine when there was no track record. But there is a track record now. We don't have to rely on it. Let's-let's make sure that the mayor of Joliet is in before that commission, with his city council, with their numbers. Have the welfare people from there come in. Do the same in Mississippi. Do the same in Louisiana. Do the same in Missouri." And the facts are going to be what they are. And let's not just hurl charges of how they have predators and [are] cannibalistic.

Q: Looking to the future... Do you expect the growth rate to continue? Is gambling going to continue to grow the way it has been growing recently?

Fahrenkopf: The true answer to your question, I think, will depend on the economy. Right now the economy is very healthy in the United States and most state treasuries are in pretty good shape. But if we get a down turn in the economy over the next four, five, six, seven years, you're going to have jurisdictions, perhaps, that don't have one form of gambling or another; who don't want to raise taxes on their citizens; and where there's high unemployment rate, they're going to be looking for jobs. I mean -- then I think you may see a -- more action out there in the states.

But what I think you see, is the industry's still growing. What's happening is you're having a recommitment of resources and capital investment in proven markets. You know, someone said not too long ago, that in Las Vegas the -- in the state of Nevada, the state bird is a construction crane. And, when you look around and see all the constructing that's going on, it's a pretty good line. And you're seeing a tremendous investment of Atlantic City. You will not recognize Atlantic City in the next three years.

Q: But, if there is a bad economy, you would expect that more types of gaming would happen in more places?

Fahrenkopf: I think the real answer is -- and where some people make a mistake about gaming...gaming is not a panacea for economic woes. It's not a magic bullet. Communities and states, if they're looking for -- looking to gamble, it has to be part of a very integrated, well thought out, broad based economic plan.

Just bringng in a casino or another form of gaming isn't going to solve all kinds of economic problems. It's got to be part of a very carefully developed economic plan that covers the community.....No different from any other industry coming into a community -- whether or not it's a new steel mill or whether or not it's a new mall -- you got to bear in mind all the other ramifications and adjust for [them].

join the discussion / what are the odds? / gambling: pro and con / interviews / timeline / facts & stats / tapes & transcripts / press
explore FRONTLINE

web site copyright 1995-2014 WGBH educational foundation

pbs

SUPPORT PROVIDED BY

FRONTLINE on

ShopPBS