States Get Down on Sucker Bets

NEAL R. PEIRCE

September 16, 1991|By NEAL R. PEIRCE

Since Iowa's first gambling riverboats of this century pulled away from their moorings on April Fool's Day, more than a million passengers have crossed the gangplanks of the Mississippi River's glittering new floating casinos.

The official line is that Iowa's boats have nothing to do with the Las Vegas and Atlantic City worlds of loan sharks, hookers and high-rolling drunks.

Rather, these are advertised as wholesome family-fun places that repackage casinos as floating 19th-century theme parks.

The boats' lure is of antebellum romance with river rogues clad in sharply tailored frock coats sporting gold watches and diamond studs. Under Iowa law just 30 percent of a ship's floor space can be devoted to gambling.

There's even a $200-per-cruise loss limit to insure no one gets carried away.

But whatever you call it, it's still gambling, and it still has gambling's special allure. State governments and bedraggled river towns are counting on the floating casinos cruising the Mississippi to spur tens of millions of dollars worth of riverfront development and a bonanza for public treasuries.

Iowa expects to net $12 million from riverboat gambling this year.

So who could complain? ''People are having fun,'' the boats have provided ''a real psychological boost,'' gambling ''is part of our history,'' Davenport Mayor Thomas Hart says.

But there are doubters and worriers. One is Iowa State Rep. David Osterberg, who says: ''Things are good right now. But this is like making a pact with the devil. And every year the devil is going to come back and ask for more.''

Mr. Osterberg isn't talking morality, he's talking economics.

Davenport, for example, made itself a gambling port by approving projects proposed by the Pittsburgh-based multimillionaire developer John E. Connelly. Mr. Connelly promised Davenport a lot: not just to spend $10 million to convert his tourist boat ''The President'' into a floating casino, but a new $35 million waterfront hotel, a $10 million promenade, and $6 million to purchase and renovate the downtown Blackhawk Hotel.

The Blackhawk deal went through, but financing fell through on the waterfront hotel. Then Mr. Connelly told the city he'd build a $3 million floating structure instead of the riverfront promenade. Davenport officials gulped, but agreed. Now there's lots of feeling among town leaders they were taken to the cleaners.

''These things are being built so they can float away if the operators get a better deal elsewhere,'' says Mr. Osterberg.

''People have to realize they're dealing with folks interested in making money any way they can. They won't be any better than Al Davis and the Raiders.''

In Bettendorf, upstream from Davenport, developer Bernard Goldstein is temporarily docking his two-casino $10 million ''Diamond Lady'' and has promised a $60 million development called Steamboat Landing.

It's to feature a factory-outlet mall, two hotels, an RV park and more. The outlet mall is going forward but the rest of Steamboat Landing remains nothing more than a windswept, dust-choked parking lot, with Mr. Goldstein encountering financing difficulties.

And as riverboat casinos proliferate, competition for customers may become intense.

To stay healthy, Iowa's riverboat fleet will have to keep on drawing more people yearly than the entire state population of 2.8 million. But the first riverboats on the Illinois side of the river are just opening (up to 20 are authorized). Missouri voters get to vote on riverboat gambling next November.

By next summer, gambling boats could also be plying the waters of Mississippi and Louisiana, which have also legalized riverboat gambling.

As for Iowa's ''family-style'' gambling, its days could be numbered. Illinois is raising the ante by not imposing wager or loss limits on its boats. Iowans are noting nervously that Chicago-area gamblers now account for close to half their riverboat customers.

Maybe there'll be business for scores of boats, as the ranks of the gambling public swell. And if you're desperate for gambling revenue, why just on water? Why discriminate against landlocked towns? Ultimately, the difference between a moored riverboat and a casino on land is a mere technicality.

So the gaming industry is understandably licking its chops. Gaming and Wagering Business reports Americans legally wagered $286 billion last year -- more than $1,000 per capita and 6.2 percent of U.S. total personal income.

State lotteries grossed $21 billion last year, with such megastates as Florida and Texas now joining the pack, urging their residents to wager.

Coming on fast are Indian-run gambling casinos, spreading quickly after a 1987 court decision and 1988 act of Congress making it tough for states to stop them.

Consider the emergence of video poker machines -- ''video lottery terminals'' located in taverns and convenience stores. They look, walk and quack like slot machines. The only difference is that the payoff, instead of a torrent of coins spewing out of the machine, is a ticket or scrip you have to cash somewhere else.

Video lottery terminals are now legal in South Dakota, Montana and West Virginia, and being attempted in Oregon and Louisiana. Numerous other states are expected to follow suit.

Courtesy of revenue-hungry states, gambling is sinking its roots ever deeper into the national psyche. How many cities and towns have to become versions of Atlantic City or Las Vegas before anyone pauses to ask if it's such a wise idea?

Neal R. Peirce writes on state and urban affairs.

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