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Washington State Debates Level Playing Field, Again

2 December 2004

An unsolvable problem has reemerged in Washington State: How to let privately owned cardrooms and tribal casinos compete as equals. Whichever side is asking for more always argues that all it wants is "a level playing field."

There is no solution, because card rooms and tribal casinos are located in different legal and economic worlds.

Privately owned cardrooms came first. They were small, no more than five tables, and limited to non-banking card games, like poker, with low stakes. But they survived because they were usually located in the hearts of cities.

Tribal gaming exploded in the 1990s, starting with high stakes bingo and poker. But the tribes' gaming operations were usually quite a ways from centers of population.

Tribes opened true casinos, although lacking slot machines. The state signed compacts allowing tribes to offer house-banked blackjack, roulette, craps and 19 other named games, besides "any other table game authorized for play in Nevada."

Cardrooms began to fail: There were 113 in 1994, three years later there were only 86.

The cardrooms demanded a level playing field. Although lawmakers would not let them have slot machines, they did begin relaxing their restrictions. First, the Washington State Gambling Commission, which has the sole power to determine how much players may bet, raised the maximum wager from $10 to $25. The Legislature then expanded the number of tables allowed from five to 15.

But tribal casinos expanded; starting with 32 tables, with $250 maximum bets, casinos grew to 52 tables, with wagers up to $500.

Cardroom revenue continued to decrease. The political problem for the state was that the cardrooms not only create jobs, they are heavily taxed, with the revenue going to cash-starved local governments.

The only form of gambling that can compete against a casino is another casino. The Legislature bit the bullet and allowed the struggling cardrooms to become mini-casinos, with up to 15 house-banked blackjack tables.

Tribal casinos, offering the same games, but in remote locations knew they needed something more to level the playing field. They soon got what they wanted in a major way from the state.

Under federal law, tribes have the right to offer any form of gambling permitted by state law. Tribal negotiators argued that the state itself was operating a lottery, which used mechanical devices. The result was compacts allowing tribal casinos to have video lottery devices, practically indistinguishable from slot machines.

It was now the cardrooms' turn to ask for a level playing field. The Gambling Commission responded by raising the betting limit to $100. But that was not enough to save all the clubs.

Mini-casinos ask every year to have the same right as tribes to have gaming devices, but every year the Legislature turns them down. It's on the ballot for this November. Win or lose, the cardrooms will try again.

Meanwhile, in order to survive not only competition but rising expenses, the cardclubs' Recreational Gaming Association asked the Gambling Commission to raise the maximum bet to $300.

Opposition arose from the anti's, especially Citizens against Gambling Expansion, led by former Gov. Booth Gardner and King County Prosecutor Norm Maleng, and, of course, from Indian casinos.

The Gambling Commission feels it is bound by the state's supposed policy against the expansion of gambling. But regulators understand that their duty is also not to let the industry they regulate go bankrupt.

So, after discussing it at five separate meetings, the Commission decided on a compromise: The new limit will be $200, but clubs are greatly limited in how many of these higher-stake tables they may have. Starting July 1, 2004, clubs with five or fewer tables can designate only one; those with six to ten tables can have two and clubs with 11 to 15 tables can have three $200 max. tables.

No one is going to be satisfied with this arrangement. So, it is a sure thing that either the cardrooms or tribes, or both, are going to continue to demand a level playing field.

© Copyright 2004, all rights reserved worldwide GAMBLING AND THE LAW® is a registered trademark of Professor I Nelson Rose, Whittier Law School, Costa Mesa, CA

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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:

> More Books By I. Nelson Rose