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Status of Gambling Laws - Part 4: New Jersey - Rhode Island

13 February 2002

The following are American jurisdictions having recent activity concerning legal gambling.

* States and territories with gaming devices are marked with an asterisk: *

! States with at least one casino (defined as having both banking card games and slot-like machines) are marked with an exclamation point: !

!* NEW JERSEY - The 12 casinos in Atlantic City win more than $4.2 billion a year, making them the largest gaming market in the U.S., just ahead of the Las Vegas strip. The State Lottery would like to put in video lottery terminals statewide. Given the casinos' political power, the proposal seems doubtful. Acting Gov. Donald T. DiFrancesco signed two bills in Aug. 2001 allowing at-home accounting wagering at up to 15 OTBs; then-Gov. Whitman had vetoed a similar bill. A new state law prohibits cruises to nowhere. Electronic pull-tabs, closely resembling traditional slot machines, may soon be appearing in social clubs and fraternal societies. Gary DiBartolomeo resigned as President of Caesars Atlantic City amidst charges he lied to the Casino Control Commission about his compulsive gambling.

!* NEW MEXICO - Gov. Gary Johnson, elected and reelected with the help of major tribal contributions, signed compacts for casinos, which were declared illegal. In 1977 the Legislature passed the Gaming Control Act, approved new compacts, but imposed a high (16%) fee. To get the bill through, fraternal organizations, charities and the state's four racetracks got slots too (Sunland Park opened with 300 slots in March 1999). The tracks are taxed at 25% and have to turn over another 20% of net slot revenues for racing purses. Not a single tribe has paid 100%. Atty. Gen. Madrid filed suit in June 2000. In March 2001, a compromise was reached with 11 of 13 tribes with a lower revenue sharing rate (3%-8%); but the suits continue. The Legislature also lowered the tax rate on non-profits, from 25% to 10%, and increased the number of slots a track may have to 600 (750 if the track obtains another track's allocation). In 2001, Gov. Johnson earmarked $50,000 to create regulations for pari-mutuel betting on bicycle racing. Atty. Gen. Madrid opined it is illegal under federal law. In Nov. 2000, voters in Gallup's McKinley County rejected casino and racetrack gambling 55% to 45%.

!* NEW YORK - The state needs to raise money after the Sept. 11th massacres, so the Legislature turned to gambling, including six more tribal casinos and VLTs at selected racetracks. The St. Regis Mohawk Tribe quickly signed an agreement with Park Place Entertainment Corp. to build and operate a $500 million casino and resort complex in the Catskills. The legislation probably violates the State Constitution, because it allows slots, and federal law, because it taxes the tribes at 25%. Gov. George Pataki signed compacts creating tribal casinos without slots, including the fantastically successful Oneida's Turning Stone. (If Mexico legalizes casinos, the Oneidas plan to develop and manage them in Acapulco and Mazatlan.) A state trial court ruled the compacts illegal because the Governor signed without the Legislature's authorization. But Gov. Pataki then signed a compact with the Seneca Nation for tribal casinos in Niagara Falls and Buffalo. Atty. Gen. Eliot Spitzer doesn't believe the casinos will have to close. Sen. Hillary Clinton demonstrated during the campaign that she hasn't a clue about Indian gaming. A state trial judge caused a stir by declaring an "Internet site creates a virtual casino within the user's computer terminal" and may be dragged into New York. Interesting, but irrelevant: this operator was a New York company! A trial court decision allows New York City to license casino day-trips-to-nowhere. The Off-Track Betting Corp. announced plans to set up the first state-sponsored Internet betting site, but the Legislature balked.

!* NORTH CAROLINA - State law allows video poker, but only up to three machines per location with a maximum payout of $10 in merchandise per session. Larger, illegal, payoffs are commonly reported. The Legislature passed a law increasing penalties for violators, banning the importation of new video poker machines and prohibiting children from playing. In 1994, the Governor signed a compact allowing the Cherokees to offer video gaming at one bingo hall. A state Court of Appeals decision raises questions about the legality of video poker, but the tribe is continuing to operate its 2,300 machines. The House approved, 91-11, a bill to virtually outlaw casino cruises-to-nowhere from the North Carolina coast. In July 2001 the state Supreme Court ruled present state law only banned gambling equipment in a fixed location, so casino boats on state waters and even trains would be legal.

!* NORTH DAKOTA - Charity blackjack in hotels and four Indian casinos with slots; Spirit Lake has 500 slots, blackjack, craps, poker, bingo and keno. On Aug. 1 2001, charitable gaming organizations were permitted to raise the betting limit for blackjack from $5 to $25. The increase was to allow them to compete with tribal casinos, after the tribal limits were raised from $50 to $250. In 1996, a proposal for video gaming was defeated at the polls. A State Lottery is dead: voters rejected it in 1986 -- one of only four states to do so this century -- and in 2001 the House soundly rejected putting the issue on the ballot again.

OHIO - The Legislature is considering legalizing 1,500 State Lottery operated VLTs (video poker and slots) at seven racetracks, or possibly letting it go to the voters. Gov. Bob Taft is opposed. An Internet bingo game for charity, limited to in-state players, opened in November 2001. In 1996, a riverboat casino initiative was defeated 62% to 38%. Casino bills and initiatives have been attempted every other year for decades and always failed.

OKLAHOMA - Twenty-three of Oklahoma's 39 federally recognized tribes have a form of gaming; the Chickasaw Nation alone has 10 locations. Some tribes offer "blackjack tournaments" where players supposedly compete against each other. But a federal judge denied a tribe's request for electronic games similar to slot machines at its casino near Norman. The Absentee Shawnee Tribe and the Seminole Nation have filed suit to get slots (which are illegal in Oklahoma). A bill to allow gaming machines at the state's four tracks is pending. In Feb. 1998, voters resoundingly defeated a casino initiative after the sponsor withdrew. In 1996, voters failed to approve a State Lottery; Gov. David Walters' pro-lottery forces had been far out-spent by horse-racing interests. The Legislature won't approve a second attempt. A federal Court of Appeals ordered the state to negotiate for tribal Class III gambling, but the case was dismissed following the U.S. Supreme Court Seminole decision. The Quapaw Tribe is said to have the largest all-electronic bingo hall in North America, 800 seats, in Miami, Oklahoma, according to e-BingoNews.

!* OREGON - The State Lottery, which runs almost 8,900 video poker machines, maximum of five per location, wants to add regular slot machines. It has the power, but Gov. John Kitzhaber is an opponent of legal gambling. The state constitution prohibits casinos. The State Supreme Court ruled a store with non-gaming business and only five gaming devices is not a "casino." But the state has entered into compacts giving its tribes full casinos. Anti-gaming forces, led by the Rev. Tom Grey, failed to collect enough signatures to get a referendum on the Nov. 2000 general election ballot to outlaw video poker. Charities can run casino nights. The State Lottery takes bets on professional sports events. A Marion County judge dismissed a lawsuit in 2001 challenging the 1984 ballot measure that created the Oregon Lottery, because there is a 10 year statute of limitations.

PENNSYLVANIA - The Legislature has the power to legalize riverboat casinos or slots at tracks, but politically it has to be approved by the voters, as new Gov. Mark Schweiker made clear, when he took office in 2001. Bills are pending to allow up to 2,000 slots at each of the state's four racetracks.

* RHODE ISLAND - Lincoln Greyhound Park will probably soon have coin-drop slots, which eliminates the final distinction between "VLTs" and slot machines. The state runs 1,628 VLTs at Newport Grand Jai Alai and Lincoln. The Lottery Commission voted 5-4 to give them 850 more to compete with Connecticut's tribal casinos. Lincoln alone will soon have 1,550. In July 2000, the State Supreme Court overruled Gov. Almond's objections, finding the Legislature could delegate its power to a commission. The Lottery Commission will meet in Nov. 2001 to consider the addition of 1,825 video-slot machines to the two sites. A heated dispute over a potential (non-IGRA) Indian casino is raging. Sen. Chaffee pushed a bill through the U.S. Senate requiring statewide voter approval, but the Legislature seems opposed to putting it on the ballot. In June 1999, the Narragansett Tribe won 2 to 1 in economically depressed West Warwick.

Gambling and the Law®: Status of Gambling Laws

©Copyright November 18, 2001, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, California.

Articles in this Series
Best of I. Nelson Rose
I. Nelson Rose

Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

> More Books By I. Nelson Rose

I. Nelson Rose
Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Gambling and the Law

> More Books By I. Nelson Rose