Recently, gambling in Washington State has come under increasing scrutiny by the media and policymakers. The increased visibility of so-called "mini-casinos," especially, has given rise to concerns about proliferation, economic and social impacts, and problem gambling. Many of these concerns are based on misperceptions, and some are driven by a condemnation of gambling in general.

Following is a sincere effort to address the most frequently asked questions and concerns about Washington’s card room industry--fairly, and with the best information available.

1. Q. How, when and why were Card Rooms or Mini-Casinos authorized in Washington State…?

2. Q. What exactly are Mini-Casinos...?

3. Q. So, Mini-Casinos are Las Vegas type gambling establishments...?

4. Q. What are some of the other differences between Tribal and Mini-Casinos...?

5. Q. What about the media reports stating the Legislature went too far and created an "explosion" of gambling in our state…?

6. Q. But aren’t there many more of these mini-casino’s in the pipeline...?

7. Q. Whichever way you look at it, every time a new mini-casino opens, won’t there be more gamblers and more gambling related problems…?

8. Q. What about youth-related gambling problems…? Aren’t there media reports of an alarming increase in gambling by kids...?

9. Q. What about personal bankruptcies, domestic violence, and other problems associated with gambling, according to media reports...?

10. Q. Fine. But don’t most people feel that gambling is an "undesirable" activity, and that government should "protect "communities from such establishments...?

11. Q. What about crime and the association of "shady" elements with gambling...? Shouldn’t communities be concerned about the legislature relaxing restrictions on gambling when it authorized mini-casinos...?

12. Q. Why not just ban gambling in a community altogether as Seattle has done...?

13. Q. Speaking of taxes, how much do these Mini-Casinos pay? Are local governments getting a fair share…?

14. Q. With the kinds of revenues mini-casinos apparently generate, don’t owners get a financial windfall…?

15. Q. Who works in mini-casinos..?

16. Q. These jobs...aren’t they just minimum wage, dead end jobs...?

17. Q. How do these numbers shape up for individual Mini-Casinos...?

1. Q. How, when and why were Card Rooms or Mini-Casinos authorized in Washington State…?

A. Card Rooms go back to 1974 when the Legislature approved "Social Card Games" for food and beverage businesses and non-profit organizations. Modifications in fees, wagers, and operations were made in the ensuing years, but the basic scope of card rooms was changed in 1996 when the Legislature authorized "Enhanced Card Room" operations which allowed for up to 15 tables, a change in fee collection procedures, and player supported jackpots to be operated with authorized card games. This was followed in 1997 by the authorization of "House Banked Card Rooms", meaning that patrons play against the dealer instead of each other. The underlying reason was to provide a more "level playing field" for card rooms facing increasing competition. As the availability and sophistication of other gambling venues like the tribal casinos, state-run lottery, tourist gambling in neighboring states and provinces, increased, the Legislature responded to the needs of operators to maintain at least minimal competitiveness with these venues.

2. Q. What exactly are Mini-Casinos...?

A. "Mini-Casino" is the generally recognized name for Washington’s new card rooms which offer house banked card games, such as Black Jack. "House Banked" means that patrons play against the establishment, or "house", which covers all wagers.

3. Q. So, Mini-Casinos are Las Vegas type gambling establishments...?

A. Not really. In Washington, Casinos that offer Las Vegas style gambling with table games like Roulette and Craps, along with Keno and modified slot machines, are legal only on Indian Reservations. These "Tribal Casinos" are operated under legal agreements or "compacts" with the state, but no taxes are paid to state or local jurisdictions. Mini-Casinos are limited to certain card games only and are licensed and regulated by the state gambling commission and taxed by local governments.

4. Q. What are some of the other differences between Tribal and Mini-Casinos...?

A. Size and scope of operations. Mini-Casinos are restricted to 15 tables per establishment; wagers are limited to $25 for the first 6-months, $100 after review by the State Gambling Commission; while tribals operate up to 52 tables with $ 500 wagering limits, as well as other games, such as Keno, Roulette, Craps and electronic "tribal lottery" machines.

5. Q. What about the media reports stating the Legislature went too far and created an "explosion" of gambling in our state…?

A. Actually, the total number of card room licenses reporting activity has decreased since the Legislature enacted the enhanced card room program in 1996. In June 1996 there were 93 card rooms reporting activity in the state. In June 2008 there were 86 reporting. So, after twelve years of the passage of enhanced cardroom legislation, Washington saw a grand total of seven less cardrooms reporting activity. It should also be noted that as of June 30, 2008 cardroom licenses made up only 13% of all gambling licenses reporting activity.

6. Q. But aren’t there many more of these mini-casino’s in the pipeline...?

A. As of October 2009 there are a total of 71 house-banked cardrooms in Washington State. Of this number, 32 were pre-existing cardrooms that applied for the new license and 39 are new establishments. The Washington State Gambling Commission will only be approving 1 to 2 new licenses per month in order to keep up with its regulation and supervising functions.  As of today, there are no new licenses sumbitted or pending.

7. Q. Whichever way you look at it, every time a new mini-casino opens, won’t there be more gamblers and more gambling related problems…?

A. That’s a little like saying every time a new restaurant opens, there will be more "eaters" and more eating disorders. The fact is that the gaming market is fairly static, and new mini-casinos have to compete for a share of the existing market. They don’t create new gamblers. A recent state sponsored study shows that despite the increased availability of gambling venues, problem gambling has not only remained static, it has actually gone down slightly over the last several years.

8. Q. What about youth-related gambling problems…? Aren’t there media reports of an alarming increase in gambling by kids...?

A. One has to look carefully at where such reports come from. Much of it is based on an overall national picture of all forms of gambling. As for mini-casinos in our state, most are liquor licensed businesses which restrict access by minors in the first place. And, though the legal gambling age is 18 for the Lottery, some card room operators voluntarily set the minimum age at 21.

9. Q. What about personal bankruptcies, domestic violence, and other problems associated with gambling, according to media reports...?

A. Compulsive gambling is a serious problem for some individuals. RGA is actively working with the Evergreen Council on Problem Gambling (formerly the Washington State Council on Problem Gambling) to make those who work in the industry aware of the issues and the help that is available. Card room operators are also instituting their own policies to curtail problem gambling. An industry awareness video was created by the workgroup and has been distributed to assist in this effort: see http://www.evergreencpg.org/.

As mentioned before, valid statistical studies show that in our state the number of problem gamblers has stayed the same or decreased, even as legal gambling venues have increased.

There is no valid evidence to support the claim that there is a correlation between gambling and the number of personal bankruptcies in a state. In fact, states that do not allow gambling represent some of the states with the highest number of personal bankruptcies. Between 1994-96 Hawaii, which forbids all forms of gambling, had the highest increase in personal bankruptcies, and the next four highest bankruptcy states had no casino gambling.

10. Q. Fine. But don’t most people feel that gambling is an "undesirable" activity, and that government should "protect "communities from such establishments...?

A. From time to time, there have been efforts to "protect" people from what some feel are unwholesome activities. Prohibition is an example of this. The fact is, Americans today recognize and support each other’s right to spend their discretionary, recreational dollars any way they wish. National, regional and local surveys, including a recent survey of voters in the City of Shoreline, confirm overwhelmingly that even those who refrain from gambling on personal moral grounds don’t wish to unreasonably restrict access to this form of entertainment to others.

11. Q. What about crime and the association of "shady" elements with gambling...? Shouldn’t communities be concerned about the legislature relaxing restrictions on gambling when it authorized mini-casinos...?

A. The claim that mini-casino operations are associated with criminal activity does a grave injustice to the hard working men and women in this industry. Law enforcement authorities from all over the state have repeatedly testified that there is no increase in crime associated with card room operations. Today’s card rooms are well run, attractive entertainment businesses that are among the most tightly regulated enterprises in the country.

To qualify for house banked licensing, operators have to undergo stringent background checks; all gaming employees must be licensed; and every aspect of gaming operations comes under the close scrutiny and supervision by the State Gambling Commission. Card rooms must pass additional reviews before they are allowed the maximum wagering limit of $100.

12. Q. Why not just ban gambling in a community altogether as Seattle has done...?

A. The question of personal entertainment choices and freedom aside, there are definite benefits associated with gaming operations. In many communities, particularly in economically depressed urban and rural communities, there is a net positive economic impact. Mini-Casinos generate thousands of direct and indirect jobs, and pay millions in local taxes. In fiscal year 2008, this amounted to $28.1 million in total gambling taxes with more than 8,000 workers employed in card rooms throughout the state.

13. Q. Speaking of taxes, how much do these Mini-Casinos pay? Are local governments getting a fair share…?

A. State law now allows a local tax of up to 20% on gross revenue--before expenses and before regular B&O taxes. Between 1996 - 2008 local governments received $212 million as a result of cardroom taxes.

The average rate statewide is nearly 9.36%, and several operations are only marginally profitable at such rates. Any increase would result in a significant number of failures. Further, the cardroom’s primary competition — tribal casinos — are not subject to these taxes, as they are exempt by federal law.

14. Q. With the kinds of revenues mini-casinos apparently generate, don’t owners get a financial windfall…?

A. The more prominent mini-casino operations are, indeed, successful. But the risks and costs involved are also great. The security equipment required, for example, can cost hundreds of thousands of dollars. There are large advertising and marketing costs, and operational costs--especially personnel--are much larger than normal restaurant, tavern or traditional card room expenditures.

15. Q. Who works in mini-casinos..?

A. A statistical overview shows that workers in a typical mini-casino operation are comprised of (approximately) 66% women; 30% minorities; 26% over age 40; 77% single or divorced; with a total of 191 children supported. (Royal Casino; Everett; December 1998)

16. Q. These jobs...aren’t they just minimum wage, dead end jobs...?

A. Mini-Casinos offer true living wage job opportunities with health care benefits, long-term security and meaningful advancement opportunities. A Black Jack dealer can easily make up to $50 dollars an hour and can advance to floor supervisor or other management positions. Many mini-casinos have large numbers of employees previously on public assistance. With the training, flexible work schedules and opportunities in this industry, these workers have been able to create stable lives for themselves and their families.

17. Q. How do these numbers shape up for individual Mini-Casinos...?

A. Comprehensive statistics for every individual establishment are not available, but the RGA has calculated impacts on an average per table basis: 10 direct gaming jobs per table; 3 support jobs; 4 additional jobs generated in the general economy. This means an average of 17 jobs per table, or 255 jobs for a 15-Table operation in full swing.

References:

• Card Room Pilot Study Report-January 1999; Washington State Gambling Commission.
• Washington State Adult Gambling Prevalence Survey; (Washington State Lottery) Washington State Council on Problem Gambling; May 1999.
• Rounding Up the Usual Suspects: A Critique of the Alleged Link Between Gambling and Bankruptcy; by Keith Whyte, American Gaming Association, August 1997.
• Licensed Operator’s Activity; Washington State Gambling Commission, June 1996, September 1999, August 2009.
• Washington’s Cardroom Industry: A Fragile Recovery; Washington Research Council, November 1999.
• Fiscal Year Net Receipts & Gambling Statistics for fiscal Year; Washington Gabling Commission, June 2008

If you have any other questions or concerns that were not addressed here, please contact:

Recreational Gaming Association
P.O. Box 1787 • Olympia, WA 98507 • 360-352-0514 Office • 360-352-4579 Fax

Or e-mail us.