Gambling & Politics, The Sequel

Las Vegas Advisor
Gambling & Politics, The Sequel
Wild Casino

You would have to be living under a particularly large rock to fail to see the ongoing intersection of these two forces. Political issues dominated the gambling discussion last week and again this, particularly as the Illinois Lege moved to hike the tax on online sports betting to as much as 40%, depending on how much you make. More that anon. Our focus falls first on the newest story, involving a tribal juice job that was sleazier than the Department of the Interior could stomach. It entails Kings Mountain Casino‘s permanent iteration, which has been more off than on lately, thanks to Interior Department intervention.

Basically, what the Catawba Indians did was give away the store to politically connected Wallace Cheves and his SkyBoat Gaming. The federal government found that Cheves got part-ownership of Kings Mountain, as well as the right to tell the Catawba what to do. That didn’t fly … nor did the dilatory filing of the suspect management contract. Cheves had to be bought out of his stake in the project, for which he tried to shake down the tribe for $125 million plus a $6 million/year lease on a nearby parking lot. That didn’t go over too well with tribal Chief Brian Harris, who balked at both demands before reaching an undisclosed settlement with Cheves. So SkyBoat is out and Delaware North is in as the casino manager. It’s a sad day when Delaware North is the new broom sweeping things clean.

Meanwhile, the Catawba are finally free to go ahead with a $700 million permanent casino, which will supersede a ramshackle collection of trailers that currently offer slots in a box. The finished casino will have 4,300 slots and 100 tables, plus 400 hotel rooms. It will also have the unending fury of the Cherokee Tribe, which considers gambling in North Carolina to be practically a birthright and has been trying to trip up the Catawba since Day One. Win some, lose some.

An ongoing controversy that’s coming to a boiling point in Mississippi involves the hotels that were left over after Harrah’s Tunica was demolished. They’ve been standing empty and bunch of crackers would prefer that they remain that way rather than house—gasp!—migrant children. A company called Rapid Deploymenthas proposed to the Biden administration that the vacant hotels be repurposed to hold 250 kids (downsized from 2,000). It would essentially be house arrest for minors and teenagers (good luck with that), and would provide five years’ worth of jobs to the area. After all, somebody has to babysit. The minors wouldn’t even be allowed to, God forbid, go to school in the area.

Reaction was rapid, adverse and more than a little racist. Heaven forfend that dark-skinned people be bused into sacrosanct Tunica! Better that 1,536 hotel rooms continue to gather dust and generate zero jobs than subject Tunica’s public services to an influx of ‘undesirables.’ The local sheriff and others are using Tunica’s a pathetic infrastructure as an excuse to—no, not improve the infrastructure—not do anything but complain. Mind you, Harrah’s Tunica closed 10 years ago (one of three defunct casinos in the area), to be replaced by … nothing. And nothing is the way that folks like Sen. Roger Wicker (R) like it. Take it from a child of the South: The power structure down in Dixie has no use for anything but ‘yes, boss’ subservience from ‘the darkies.’ Yes, Mississippi continues to lead America proudly back into the 19th century.

Like her late husband, Dr. Miriam “Tex” Adelson has proven a poor reader of the political tea leaves in Texas. She backed five candidates in last month’s GOP primary. Three went down in flames and one eked out a 336-vote win. Not so hot, Tex. Today comes even more bad news. Casino legislation is highly unlikely to pass out of the Lege until 2027 at the earliest. Thank parliamentary procedure for this. Pro-gambling legislation was introduced (only to fail) in the state’s House of Representatives last session, meaning that the initiative has to come from the state Senate next time. And that august body is run by Lt. Gov. Dan Patrick (R, above), who is dead set against casinos. Also, the Texas GOP platform is anti-casino. But really, Patrick is the linchpin to this whole affair and he has said, “My experience and my knowledge is that we aren’t even close to having 15 or 16 votes for casinos.”

The Lege doesn’t reconvene until 2025, giving Dr. Adelson plenty of time for another lobbying push, although Las Vegas Sands’ overkill style of advocacy, flooding Austin with lobbyists, has backfired time and again. Maybe now that she’s owner of the Dallas Mavericks, the widow Adelson will be seen as less of a carpetbagger. Then again, we are mystified as why the Adelsons are beating their heads against hostile, first-priority Texas instead of putting their chips on New York City, where they have a very promising proposal for Nassau County. Yes, those might be decadent-liberal dollars they’re courting, but a buck still spends the same regardless of from whose wallet it has been extracted.

Executives of both FanDuel and DraftKings are threatening to take their ball and go home after the Illinois political establishment gave them the finger with yet another usurious tax increase, sort of a gambling-industry custom in the Land of Lincoln. Don’t let the doorknob hit you in the butt on the way out, guys. We dare you to leave Illinois. We double-dare you. Because you won’t do it. There’s too much money on the table and, as New York State (and its 51% levy) have shown us, there’s no outrageous amount of taxes you won’t pay in order to collect so much as a penny of OSB revenue. Bottom line, you’re pussies who’ll grumble but ultimately dance to the tune played gleefully by Gov. J.B. Pritzker (D). Hell, even Pritzker is daring you to call the Legislature’s and his bluff.

Maybe the two companies should pack up and leave then. We’ve opposed this tax stickup (you can look it up) and FanDuel and DraftKings would have good reason to take their business elsewhere. It would be refreshing if they backed up their big talk with action. But they won’t. The only company that’s ever stood up to Illinois was MGM Resorts International, back when J. Terrence Lanni was boss. He got MGM out of the state rather than be shaken down for ever-escalating taxes and the company hasn’t looked back. Besides, BetMGM and a host of competitors stand to clean up if the big boys sulk away into the sunset. At present they’re the beneficiaries of the new tax’s sliding-scale formulation and they’d be happy to divvy up a suddenly level playing field. We’re rooting for them, although DraftKings are FanDuel are all but certain to swallow their pride and pay the gubernatorial piper.