Expansion of the Gaming Industry: Opportunities for Cooperative Extension

Not very long ago, casino gaming was viewed as an outlaw industry that should be banished. In January 1950, Tennessee Senator Estes Kefauver introduced Senate Resolution 202 calling for the investigation of organized crime in the United States (Gorman, 1971). Kefauver's interest in organized crime grew out of his investigation as chair of the House Judiciary Subcommittee and reading crime commission reports. Senator Kefauver was convinced that the federal government should play a more active role in aiding local government efforts to deal with local crime, which was a manifestation of a national problem, interstate gaming.

The national public began to view the Kefauver Committee as far more than just another Senate probe and it became a prestigious congressional investigation unequal to others. The committee's unfavorable reaction to legalized gambling in Nevada was given credit in November 1950 for swinging voters in California, Montana, Arizona, and Massachusetts against schemes to legalize gambling in those states (Christian Science Monitor, 1950).

In the summer of 1961, a federal strike force was being assembled to raid every major casino in Reno and Las Vegas (Sawyer, 1993) The Justice Department was to deputize 65 federal agents to raid Nevada casinos. Grant Sawyer, governor of Nevada and an early supporter of President Kennedy, flew to Washington, DC to confront Attorney General Robert Kennedy about the allegations. Receiving no satisfactory answer from Robert Kennedy, Governor Sawyer approached President Kennedy about the allegations. The President seemed unaware of the proposed raid that never materialized.

Despite the events 30 years ago, today legalized gaming is one of the fastest growing sectors in the national economy. According to a Christiansen/Cummings Associate study, legalized gaming produced a record $44.4 billion in gross revenues during 1995, a $4.6 billion increase from the previous year. However, the 11.4% growth was down from the 15% increase in 1994 and 14.2% in 1993.

The purpose of this paper is first to identify the different types of legalized gaming and where they occur across the United States. Second, define what role, if any, Cooperative Extension is playing in community-based educational programming specific to legalized gaming issues. Finally, this paper will begin the discussion of whether Cooperative Extension should participate in legalized gaming issues programming.

Several years ago, it was common for most people to associate legalized gaming with casino operations primarily in Las Vegas, Reno, and Atlantic City. This still may be the case today. However the availability and promotion of other forms of legalized gaming have dramatically increased. This has brought forms of legalized gaming, both urban and rural, closer to the consumer and part of his or her everyday life. There has been an increase in the number of bingo halls, state lottery systems (including video lottery), parimutuel race tracks, and off-track betting. Casino expansion in both new and established markets, including tribal operations, has been growing at a phenomenal rate.

In many cases, legalized gaming is supported and administered by state governments. In 1991, states that promoted technology transfer services, including research and marketing to small manufacturing companies, considered gaming activities the innovative sectors of the economy. These states spent over $50 million in technology transfer services (Business Week, 1992). By contrast, New Jersey alone spent more than $50 million to regulate its casinos, while lottery states spent six times this amount to advertise its products (Goodman, 1994).

With the increased legalization of gaming has come the increased competition between states and territories for recreational dollars. Lotteries, found in the majority of states, have increased the pressures on state governments to aggressively promote and compete with new and innovative lottery production.

Tribal gaming with its untaxed revenues has provided politicians with an argument for widespread expansion of gaming activities. For example, no sooner had Connecticut's Mashantucket Pequot tribe built that state's first gaming casino, than Connecticut politicians joined casino developer Steve Wynn in an intense campaign to legalize non-Indian gaming in Hartford and Bridgeport. In 1991, soon after Iowa legalized limited-bet riverboats on its side of the Mississippi, Illinois politicians upped the ante by legalizing no-limit boats on the opposite bank (Goodman, 1994). Louisiana, Missouri and Mississippi have followed with their own riverboat promotion ideas.

Table 1 summarizes the legalized gaming activity in the U.S. and territories for 1996 (International Gaming and Wagering Business). With the exception of Hawaii and Utah, every U.S. state and territory has some form of legalized gaming operating today. Bingo, lotteries, pari-mutuels, and off-track gaming are the most popular types of gaming. Casino gaming, including Native American, riverboat, and dockside casinos, are currently operating or have been authorized to operate in 22 U.S. states and territories. Twenty years ago, only the state of Nevada had legalized casinos.

The availability of multiple forms of legalized gaming has grown in popularity among states and communities. Most legalized gaming expansion has occurred in rural America during the past decade. This may be due to the increased pressures to raise revenues and sustain the local economy. However, over the last couple of years, there has been a surge of opposition that has led to the creation of a National Gambling Impact Commission. This commission is responsible for studying the economic and social impacts of legalized gaming.

During 1992, the Center for Economic Development at the University of Nevada, Reno, conducted a national gaming survey. This survey was sent to community development specialists at each Land-Grant university. The main objective of this survey was first to identify whether states perceive legalized gaming as part of their overall economic development strategy. A secondary objective was to determine whether Cooperative Extension was active in providing educational programming specific to legalized gaming.

Responses were received from 28 of 50 states (56%). Of the 28 responding states, 13 indicated that some type of gaming economic development was taking place in their state. However, only two states, Minnesota and Wisconsin, had Extension programming addressing both rural and urban gaming issues. Summary of the results are presented in Table 2.

The Minnesota program has an Extension tourism center that develops public seminars around gaming issues. Wisconsin has approximately six Extension education programs to help residents understand potential impacts of legalized casino gaming and potential spill over from Native America operations. Other states have Cooperative Extension programs in animal and veterinary science addressing health issues for race horses. In Arizona and Nevada impact analysis of the gaming industry on urban and rural economies has been completed on an as requested basis.

When states and communities are faced with the decision to introduce and/or expand legalized gaming, several issues are often discussed by citizens. The most common usually center around three themes. First, economic and fiscal issues which refer to the economic well being of an area by generating revenue, income, and jobs. Second, social issues are debated as to the problems that have historically been tied to legalized gaming (i.e. crime and addictions). Finally, there is the moral issue of acceptability because of personal or religious beliefs.

Should Cooperative Extension be addressing legalized gaming issues? Referring to the Cooperative Extension New Direction developed by the Extension Committee on Organization and Policy, the vision statement includes, "The Cooperative Extension System: is a future oriented, self-renewing national educational network providing excellence in programs focused on contemporary issues and needs of people" (ECOP 1990).

Within this framework, would issues related to legalized gaming be considered contemporary that could focus on the needs of people within a state or community? Will the rapid growth of legalized gaming become a national, state, and community issue that Cooperative Extension should address? Could issues specific to legalized gaming be included in several base programs including community resources and economic development, family development, and resource management, leadership and volunteer development, and nutrition, diet, and health?

As discussed throughout this paper, legalized gaming has grown and developed into national, state, and community issues. This growth has created a great deal of discussion and debate about how legalized gaming impacts the nation, individual states, and local communities. The importance of this issue prompted the creation of the National Gaming Impact Study to provide information to states and communities about potential impacts of legalized gaming. This information, as well as other educational information, is often requested by states and communities.

Community-based programming could be developed to coincide with the National Gaming Impact Study. Cooperative Extension should be the logical vehicle to develop and deliver educational programming issues to states and communities throughout the United States. Even though each state and community has its own unique characteristics, a team of interdisciplinary professionals could be assembled to develop basic curriculum specific to varying types of legalized gaming impacts. This team could include professionals from higher education (across various disciplines), national, state and local government officials, business operators, and citizens.

An example of issues that could help form this curriculum and develop educational programming may include:

1. What is the economic impact of varying forms of legalized gaming on region, state, and local community?
2. What is the fiscal impact of varying forms of gaming on a region, state, and local community?

   How will varying forms of legalized gaming impact:

3. The social structure of a region, state, and local community?
4. The overall infrastructure of a region, state, and local community?
5. The resources of a region, state, and local community?
6. The family structure in a region, state, and local community?
7. The youth in a region, state, and local community?
8. The general health of a region, state, or local community?

The real challenge among Cooperative Extension and other agencies is to provide education on how each component will change if gaming tourism becomes part of the area. If gaming becomes part of an area, what potential impacts may the community be faced with in terms of changes in demographics, changes in the overall economic structure, changes in state and local revenues and the type of infrastructure demands imposed on a community to manage change? An equally important question, will the social make-up of the area change?

As Cooperative Extension approaches the 21st century, the challenge to be responsive to national, state, and community needs will continue to be great. Building upon the foundation of Cooperative Extension, base programming, the real opportunities will come in the form of responses to issues that directly and indirectly impact the daily lives of the general population. Issue based programming will become an integral part of Cooperative Extension to address national, state and local needs. The future success of Cooperative Extension may be how well partnerships are formed, issues are identified, and the ability to respond in a timely fashion. However, whether the growth in legalized gaming continues, there appears to a need for Extension to be involved.

Business Week. "Industrial Policy", April 6, 1992.

"Gambling proposals lose in four states", 67 (1950): 1380- 81. Christian Science Monitor.

Extension Committee on Organization and Policy and Extension Services-USDA. (1990). Strategic Directions of the Cooperative Extension System. (AD-BU-5584-S, ES-USDA) Washington DC.

Goodman, R. (1994) Legalized gambling as a strategy for economic development. United States Gambling Study: Northampton, MA.

Gorman, J. B. (1971) Kefauver: A political biography, New York: Oxford University Press.

Sawyer, G. (1993) Hang tough! Grant Sawyer: An activist in the Governor's Mansion, Reno, Nevada: University of Nevada Press.