Gambling: Casinos Could Fill Detroit's Coffers

Casinos Could Fill Detroit’s Coffers
GAMBLING
By Joel Greer

The billboard jungle along the freeway tells you, if not what you want, what you need. It’s usually what to smoke, what to drive, and where to go.

The Sands Hotel of Las Vegas rents space along the Lodge Freeway in Detroit because it offers something special. Since in our so-called “free country,” you’d have to travel some 2,000 miles to play blackjack, Las Vegas is often among the first places mentioned when the possibility of a vacation is discussed.

It’s about time that someone outside of Nevada began to think about what legalized casino gambling could do for depressed urban economies. Sure, there have been some rumblings about legalizing casino gambling here in Michigan ever since Nevada did it in 1931, but it has taken a statewide fiscal crisis – with particularly harsh effects on the Motor City – to get anyone to really press the issue.

It’s been just over a year since the Michigan House of Representatives created a special legislative committee just to see if the state could benefit from a small number of gambling casinos.

As the committee conducted its public hearings throughout the state, studied the Nevada and Puerto Rico casino systems, and learned why New Jersey failed to legalize casino gaming in a 1974 referendum, it was becoming clear that Detroit’s developing budget crisis just may threaten the nation’s sixth largest city with bankruptcy.

What came out of the committee was House Bill No. 6078, and sure enough, the bill stipulates that casinos would be operated only in the City of Detroit.

“We needed something to fire up whatever we have left,” says Representative Casmer Ogonowski (D-Detroit), chairman of the special study committee and one of 21 co-sponsors of the bill.

“Because of our feasibility study, the financial plight of Detroit, and the tremendous support there, we felt that Detroit could most benefit from legalized casino gaming.”

Specifically, the bill would create within the Michigan Department of Commerce a state Casino Gaming Commission which would license, regulate and control casino gaming operations.

Under the provisions of the bill, which was placed in the House Committee on Tourist Industry Relations March 4, four casino gaming operations could be established in Detroit. After December 31, 1979, a total of six casinos would be permitted.

Additionally, the casinos, which will be located in hotels containing at least 300 sleeping rooms let on a daily basis, would operate on a limited-hour basis. The Commission would license all operators and employees, and Detroit’s Common Council would have the final say concerning operating licenses.

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A Shot in the Arm for an Ailing Economy
WHAT LEGAL CASINO GAMBLING COULD DO FOR DETROIT

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The bill would allow blackjack, bacarrat, keno, craps, roulette, poker, wheel of fortune and slot machines. Most importantly, casino gaming operations would be taxed at a rate of 35 percent and all revenue would be allocated to the City of Detroit.

So the bill, if it passed by the House, would then move on to the State Senate before eventually getting to Governor William Milliken’s desk for signing. If the bill passes and is not altered a great deal by amendments, Detroit would have the shot in the arm needed to rescue its faltering economy.

The bill’s supporters predict that Detroit would receive a straight $34 million annually for its coffers. But even more inviting would be the estimated $189 million in tourist money spent annually in the state of Michigan, with 70% of these funds from out-of-state.

Ogonowski also sees the immediate hiring of 2,000 employees by the casinos and another 29,000 service-related jobs becoming available. “That would save the state another $35 million in human maintenance (welfare and unemployment) costs,” assesses Ogonowski, who also chairs the Tourist Committee where the bill currently sits.

Just two weeks ago, Detroit’s Common Council adopted a resolution urging support for casino gambling, Mayor Young has publicly announced his support many times. “We support the enabling legislation for casino gambling not just because of the potential revenues, but because the opening of casinos could be an economic boost to the city,” said Young in his recent address to the Detroit Economic Club. “Controlled Gambling would be an important development toward revitalizing Detroit’s convention and tourist business.”

Currently, two major downtown hotels, the Heritage and The Shelby, are completely shut down, and their future is not promising. Some say that the opening of Renaissance Center, with its 1400-room Detroit Plaza Hotel, would be enough of an improvement for the convention business – but three of the existing hotels are more than eager to get into the gambling business.

Jim Tuttle, resident manager of the Detroit Cadillac Hotel, calls the gambling bill simply “Super! With 80 per cent of the North American population within two hours of Detroit, we would definitely get a jump on Las Vegas.” The Cadillac would definitely seek a license, Tuttle concludes.

“We’re definitely for it,” echoes Executive Vice President and General Manager Robert J. Cahill of the Pontchartrain. “We’d like to be one of the four places chosen,” he adds, “and I think casino gambling would not only bring more visitors from out of state – It would stimulate additional convention business into downtown and Cobo Hall.”

John Ferris, owner of the Leland House Hotel, also has his check for $100,000 ready for the licensing commission. “With the Michigan lottery the most successful in the country,” says Ferris, “there’s no question that there is a market in Detroit for casino gambling. What’s more, important is what gambling will do for down town Detroit in additional income.”

In addition, the Detroit Police Officers Association, the Central Business District Association, and the Detroit Convention Bureau have all voiced their support.

Other supporters, however, say hotels shouldn’t have an exclusive hold on the business. Jerry Schoenith, General Manager and President of the Roostertail, would certainly love to have a license for his nightclub, but would rather see gambling set up in the Belle Isle Casino, currently being refurbished by the City. “The idea here is to help the city,” he says, “not help three or four hotel owners.”

The important thing is that some type of legislation be passed; where and how gambling is to be supervised must take a back seat. Governor Milliken, while not a supporter of legalizing gambling, most likely would not veto a bill should it come across his desk.

Michigan Attorney General Frank Kelley and Vincent Piersante, head of the state’s Organized Crime Task Force, are both against the proposed legislation. “We have no real demand for casino gambling,” says Piersante, who figures this would stimulate organized crime. “We don’t have the expertise at running casinos,” he says. “All that would happen is that all the old-time illegal gamblers from Michigan who left for Nevada in the 1930’s would come back.”

“I don’t understand how Piersante can say that,” countered Rep. Ogonowski. “It’s nearly impossible for the underworld to be involved in Las Vegas today,” he added, citing the study committee’s interim report.

“In 1967, the Nevada State Gambling Control Board was authorized to maintain a list of known underworld figures who could not enter Nevada casinos,” the report reads.

“Under this law a licensee permits a listed person on his premises puts his gambling privilege in jeopardy, an the ‘blacklisted’ person is subject to prosecution for a misdemeanor.”

In other words, Ogonowski figured that Las Vegas has cleaned up its act, and that Piersante’s fears of an influx of underworld operatives is highly exaggerated.

The only other opposition would be for moral reasons. “How can it be immoral to put 50 cents in a slot machine if it’s not immoral to buy a 50-cent lottery ticket?” asks the Leland House’s Ferris. With the lottery, pari-mutuel horse racing, and bingo already legal, the moral question seems to carry little weight.

Keeping casino gambling a Detroit-only matter, chances are the bill could become law without a statewide referendum. However, there’s little doubt that a few of the suburban hotels in Dearborn, Southfield, and Troy would be interested in a piece of the action, too.

Folks as far north as the Upper Penninsula have expressed interest in casino gambling. It’s expected that Dominic Jacobetti (D-Negaunee), who is chairman of the House Appropriations committee, will introduce an amendment to the bill after it reaches the House floor. The effect here could almost be like putting sugar in someone’s gas tank. From there, the gambling issue would become a statewide problem again and a referendum just might be necessary.

Ogonowski fears a referendum because of the large sums of money that could be appropriated by anti-legalization forces. Many say that the 1974 New Jersey referendum was defeated because Las Vegas and illegal gambling poured funds into the anti-legalization campaign. That same thing might just happen here.

“We see no necessity for a referendum,” says Ogonowski, looking chiefly at the a Detroit picture. “A poll in our district (the 3rd in Detroit) was more than two to one in favor.”

While discussion goes on, Illegal gambling continues to flourish. “The department of justice has estimated that the total volume of illegal gambling

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“With gambling legalized, the state’s share of revenue would go for educating our kids. Illegal gambling profits merely increase the number of heroin addicts.”

GAMBLING

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was $29 to $39 billion in 1973.” according to the House interim report. “Other estimates range from a low of $600 million annually to a high of $500 billion.”

Of the many types of Illegal gambling, sports betting, the numbers racket, and off-track horse betting are in the forefront.

Montana and Nevada are the only currently offering legal sports betting. Twelve states have lotteries. Nevada and New York offer legal off-track betting. Most states allow horse racing, and nine allow dog racing.

Piersante, despite his opposition to casino gambling, favors legal sports betting and off-track betting, but neither has really been studied effectively in Michigan. Should the casino gambling bill make it, it’s expected that those other forms will follow shortly after.

Realistically, legalizing casino gambling in Detroit will not completely solve our fiscal crisis or stamp out Illegal gambling.

“It is widely believed, although there are no hard figures available, that Illegal gambling is the largest source of revenue for organized crime,” reads the interim report, “and that a certain amount of gambling proceeds are used by organized crime to finance other, more nefarious enterprises, such as loansharking, narcotics, and corruption of public officials.”

Perhaps Ogonowski sums it up best: “With gambling legalized, the state’s share of revenue would go for education of our kids, whereas Illegal gambling profits merely increase the number of heroin addicts.”

Joel Greer, who lives in Detroit, has written about sports for the Michigan Daily and the Ann Arbor News.