Casinos — maybe a solution for Colorado Springs?

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Casinos brought downtown Cripple Creek back to life in the early 1990s, and they could do the same for Colorado Springs.

There’s a substantial, financially strong industry that would happily move to Colorado Springs. If invited to come, it would employ thousands of workers and invest as much as $200 million in new facilities.

The industry would locate in a specially designated zone, chosen to maximize job and redevelopment opportunities. No Man’s Land on Colorado Avenue, southwest downtown, South Academy Boulevard — take your pick. The industry’s leaders would require no incentives, no tax rebates, no special utilities deals, and no givebacks.

To the contrary, they’d be ideal corporate citizens, committed to the city’s long-term growth and prosperity. In other cities, they’ve given generously to nonprofits, paid their share in taxes, and never threatened to leave town. Employees would be well-compensated and could work any of three shifts.

As an added benefit, the industry would capture more than $100 million in local spending that now goes elsewhere, magnifying its economic impact.

The industry: casino gambling.

Hearing the idea, City Councilor Bernie Herpin was mildly supportive.

“You’re asking a guy who spent last Saturday in Black Hawk, and whose wife loves Cripple Creek,” Herpin said. “I wouldn’t oppose it, but it’d be up to the voters. I’d support whatever decision they made.”

In Colorado, casinos are allowed only in the three historic mining towns of Black Hawk, Central City and Cripple Creek. Supporters of the 1990 state constitutional amendment touted it as a way to revitalize those decayed, moribund communities.

Voters may have imagined much more modest enterprises than those that eventually developed. Two decades ago, people thought picturesque casinos would be housed in restored historic buildings, sharing the street with antique stores and ice cream parlors — or so the story went.

That’s not what happened. By 1995, 75 casinos were in operation, and the once-historic town of Black Hawk was soon to be swallowed by Vegas-style casinos. Cripple Creek has fared better, but the casino industry dominates the city, both economically and politically.

Casinos are labor-intensive operations. The 2011 annual state gaming report lists casino employees by place of residence. At the end of 2011, according to the state, Cripple Creek casinos totaled 3,330 gaming employees, almost triple the town’s population.

According to the Colorado Division of Gaming, “Gross revenues generated by casinos on a monthly basis have increased from nearly $8.4 million during the first month of operation to a high of over $76.5 million in July 2007. During the first 20 years, casinos paid nearly $1.6 billion in gaming tax revenues to the state on just over $11.8 billion in adjusted gross revenues.”

Adjusted gross proceeds represent the house’s take, the difference between money won and money wagered.

During 2011, Colorado casinos took in $750.1 million in AGP and paid $102.1 million in state gaming taxes. Black Hawk accounted for more than 70 percent of the take, reporting $550.9 million in AGP, and coughing up $87.1 million in gaming taxes. Cripple Creek, with $131.4 million in AGP, paid $10.1 million in gaming taxes.

State statutes govern distribution of gambling revenues: 50 percent goes to the state, 28 percent to the state historical fund, and most of the remainder is split between the three mountain communities and the two counties in which they’re located.

According to the Colorado Gaming Association, which is funded by Colorado gambling interests, casinos are as American as apple pie.

“The casino gaming industry provides over 27,000 direct and indirect jobs to Colorado citizens,” the association’s website notes, “and annual employment surveys continue to reflect that the casino industry consistently pays higher wages than similar jobs in the metro-Denver or Colorado Springs areas. In addition to above-average wages, casino employees receive competitive fringe benefits in the areas of tuition reimbursement, transportation and meals, retirement and pension plans, health and life insurance, and exceptional promotional opportunities …”

In addition, other studies suggest that casinos don’t bring the social ills that are often associated with their presence.

The Colorado Division of Gaming notes on its website that a 1999 report by Deloitte and Touche on the impact of tribal casinos in southwestern Colorado found “negative social impacts in the areas of arrest incidences, substance abuse, traffic counts and motor vehicle accident responses. Social areas positively impacted included unemployment benefit recipient rates, employment rates, welfare recipient rates, tribal food distribution, roadway conditions and community projects and programs funded by gaming revenues.”

Any expansion of the casino business past the mountain towns would have to be approved by Colorado voters, who have not been receptive to such schemes in the past.

Since 1992, seven initiatives to expand gambling to other locales and venues have appeared on state ballots. Each one was defeated by at least a 2-to-1 margin. Initiatives that would have legalized gambling in Manitou Springs or Colorado Springs were soundly trounced.

In 1994, gambling interests sponsored a measure to allow slot machines without a local vote in Manitou Springs. It went down 80-20. Nine years later, an initiative that would have legalized gambling at the now-defunct greyhound racetrack on North Nevada Avenue failed by the same margin.

“Our polls say that voters oppose expanding gambling by a 3 to 1 margin,” said Lois Rice, the executive director of the Colorado Gaming Association. “I think people are pleased with the kind of gaming we have, but they get a little squeamish when it’s closer to home.”

Have things changed? Would our conservative city prefer higher taxes, or the rich bounty of casinos gambling?

Freedom Financial CEO Roy Clennan thinks times may be changing.

“It all depends on the voters, and in these tough economic times, I think their answer might surprise you,” Clennan said. “We allow gambling elsewhere in Colorado, so it seems a little hypocritical that we don’t allow it here.”

By the numbers

2011 total casino revenue: $750.1 million

From Black Hawk: $550.9 million

From Cripple Creek: $131.4 million

2011 state tax revenue: $102.1 million

From Black Hawk: $87.1 million

From Cripple Creek: $10.1 million

2011 casino employees, statewide: 9,264

Cripple Creek casino employees: 3,330

2011 total casinos statewide: 40

Cripple Creek: 15

Total “devices” statewide: 14,690

Total devices Cripple Creek: 3,879

Total assets, all Colorado casinos: $1.495 billion

Cash on hand, all Colorado casinos: $79.3 million

Total assets, all Cripple Creek casinos: $234.2 million

 

Cash on hand, all Cripple Creek casinos: $20.2 million

Number of initiatives to expand gambling in Colorado since 1990: 8

Number that failed: 7