Casino amendment proposal pulled until 2008 | Arkansas Blog

Thursday, June 22, 2006

Casino amendment proposal pulled until 2008

Posted By on Thu, Jun 22, 2006 at 9:20 AM

Michael Wasserman, the Texas businessman who was leading a campaign to legalize casino gambling in Arkansas, just told us over the telephone that he will officially abandon his effort tomorrow.

"I'm going to go after this in 2008," Wasserman said.

Wasserman said he has been a "basketcase" since his sister died last month of a heart attack. "I was sitting here counting petitions and decided I don't want to do this right now," he said.

He was in the process of collecting the 80,570 signatures necessary to put a constitutional amendment on the November election ballot to allow casino gambling in seven Arkansas counties and establish a statewide lottery. He told us last week that he already had over 60,000 signatures that he had secured with the help of the Arkansas AFL-CIO and other volunteers.

Wasserman's proposal was ambitious, to say the least. You can read more about it after the jump -- in the form of an article-in-progress that now will never be published.


Imagine a Disneyland-style resort complex in Pine Bluff. Or a London-themed hotel and casino in Texarkana, reminiscent of something you would see on the Las Vegas strip.

That’s just part of the vision of Michael Wasserman, a Texas businessman who is trying to put a state constitutional amendment proposal on this November’s election ballot to allow casino gambling in Arkansas.

He says he has already collected over 60,000 signatures in support of his effort, and he is confident that he will get the 80,570 he needs by the July 7 deadline.

But getting voters to approve the measure will be much more challenging. Wasserman can expect fierce opposition from faith-based interest groups that disapprove of gambling on moral and religious grounds.

He will also have to deal with the corporations that operate casinos in neighboring states, which are certain to spend whatever it takes to prevent any potential competition for their Arkansas patrons.

That’s what has happened every other time a referendum to legalize casino gambling has been put to a vote. The most recent attempt, in 2000, was rejected by a large margin, with 64 percent voting against it.

Two years earlier, Oaklawn Park, the horse racing venue in Hot Springs, joined the West Memphis greyhound track Southland in offering a similar amendment proposition that also lost badly at the polls. As a result, Oaklawn spokesman Terry Wallace thinks Wasserman’s cause is — ahem — a big gamble.

“No matter how grand the proposal is, getting through the process is a daunting task,” Wallace said. “It kind of makes you wonder why anyone would take on so much risk and spend so much money.”


Wasserman’s concepts are certainly grand, although so far he has not put much money behind them.

State law requires his amendment committee, Arkansas Resorts and Hotels, to file a monthly financial report if it raises or spends in excess of $500. So far Wasserman has not submitted any such disclosure, and he acknowledges that he is relying on volunteers for his signature-collecting efforts.

“The fact that I have hundreds of volunteers to get signatures shouldn’t call into question my ability to do this,” Wasserman said. “Once it’s on the ballot, I see money coming in to tell the people of Arkansas why this is good for the people of Arkansas.”

An opponent of the proposal, Larry Page of the Arkansas Faith and Ethics Council, says the lack of financing indicates that Wasserman doesn’t have what it takes to succeed.

“I don’t think you can qualify this kind of initiative with volunteer canvassers, so I don’t think it can happen this year,” said Page, who has led the campaigns against similar efforts in Arkansas since the early 1990s. “Unless this is real stealth movement, doesn’t seem like he has attracted much support. I probably thought it was more credible in the initial stages. I’m not saying that the effort is dead, but I don’t perceive the kind of activity that I have in the past with these kinds of initiatives that ultimately made the ballot. I went to over 20 precincts [on June 13] in Pulaski County and had folks out in the state visit their voting precincts , and no one found any signature gathering by the gambling proponents.”

“Larry Page does business the way he does, and I do business the way I do,” Wasserman responded. “I know for a fact we’ve got over 60,000 signatures that are counted and we have a lot of petitions that are out that will be back within the week. It’s amazing to me that Larry Page wants to talk about how he and his people didn’t see me so therefore I’m not doing anything. How does that make any sense?”


Wasserman said that he has big investors lined up to support his amendment campaign if it makes the ballot, and he expects to spend “probably between $3.5-4.5 million on media.”

That’s nothing compared to the money Wasserman promises to assemble if the amendment passes in November.

His plan is to spend $8 billion over four to seven years to simultaneously build luxury casino resort complexes in seven Arkansas locations: Fort Smith, Harrison, Hot Springs, Little Rock, Pine Bluff, Texarkana and West Memphis.

“We have large banks that have given us preliminary commitments for the money, so the money itself is not an issue,” Wasserman said. “Until we’re on the ballot, they won’t say who they are. But when it’s on the ballot, they will reveal their identities and give statements.”

And Wasserman’s plan doesn’t end with an $8 billion chain of 100,000-square-foot gambling palaces in some unlikely Arkansas locales. The amendment itself, one of three gambling-related initiatives proposed for this year’s election ballot, also would establish a statewide lottery, an “educational trust fund” and a state gaming commission.

The combined revenue from all of these elements could result in the elimination of the state sales tax on groceries, according to Wasserman, as well as expanded resources for pre-k programs, K-12 education and college scholarships.

Plus he projects the creation of between 19,000-21,000 jobs, which is why the Arkansas AFL-CIO is assisting Wasserman with his petition drive.

“We’re just looking at jobs,” said Alan Hughes, the AFL-CIO president, by way of explaining his organization’s involvement with the amendment push. “I know we’re losing our industrial base, and it looks like we’ve lost every opportunity to get an auto plant. We need to think about selling Arkansas as a tourist state. Look at Tunica and Shreveport. … If someone is looking to create jobs, Arkansas unions will work to make sure Arkansans have the chance to vote on it.”


If all this sounds too good to be true, Larry Page says there is a good reason for that.

“The problem that people make often times when looking at gambling proposals is they listen to the benefits,” said Page, the Arkansas Faith and Ethics Council executive director. “I would be disingenuous if I said any gambling operation isn’t going to create some jobs and generate some revenue. But you have to do a cost-benefit analysis. People who don’t even have a moral axe to grind on gambling have to look at that. If gambling were just a case of people throwing their money away, I would have nothing against that. There is no law against being stupid.”

Page wrote a long essay for his organization’s website that cites many of the economic arguments against casino gambling and lotteries. But aside from those general objections, he has a specific problem with the way Wasserman constructed his amendment proposal.

“It’s kind of incredible to me that someone could actually come in and ask a state’s voters to give him an unregulated state monopoly on casino gambling,” Page said. “Even if voters were inclined to approve casino gambling at some point, this is bad public policy. How stupid do they think we are?”

The amendment language specifically and exclusively authorizes Wasserman’s company, Arkansas Resorts & Hotels, to conduct “casino gaming” in the seven counties where he wants to build resorts. However, Wasserman argues that it wouldn’t be a monopoly, because other people could later try to change the amendment language by mounting a popular campaign like his.

“Having an exclusive at this point, because voters allow us to do what we have to do, does not create a monopoly,” Wasserman said. “We’re just asking voters to give us the right to buy these destination resorts in those counties. I think there is a big difference there. We don’t even really have an exclusive. We have the right to build based on the amendment. Anyone else who wants to do the same thing is welcome to do it. We’re not trying to keep anyone else out.”

One of the other main objections to legalizing casino gambling is that the profits end up in the hands of out-of-state corporations.

“What casinos tend to do is suck money out of local economy,” said Jerry Cox, president of the Arkansas Family Council. “And that local economy really is the pockets of the working people who live in and around that community. Casinos pull money out of the local economy, and they don’t put as much back in to the local community as they take out. The money goes into the pockets of the people who own the casino, who dribble it back in the form of relatively low-paying jobs, like sweeping floors or serving as a security guard. It’s a few jobs here and there, but not enough to offset what they take out of the local economy.”



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