Horse, dog tracks push idea of 'racinos'

Track owners are hoping to take advantage of the state's dire finances to convince voters they should let them operate casinos, something voters rejected seven years earlier.

Two public relations and lobbying firms started a campaign Monday to sell lawmakers and the public on the idea that casino gaming at existing horse and dog tracks could be at least a partial cure for the budget deficit. Publicist Jason Rose said the plan could generate $500 million in its first full year of operation, and more than $800 million when permanent facilities are constructed.

Rose conceded that would not erase the current deficit, which for the moment exceeds $3 billion. But he said it could provide an alternative to further spending cuts.

More to the point, Rose argued that getting money from gamblers is preferable to a general tax increase, a clear reference to the proposal by Gov. Jan Brewer for a temporary 1-cent increase in the state's 5.6 percent sales tax to raise $1 billion a year.

The push will get a fight from the tribes that now have the exclusive right to have slot machines, blackjack and poker tables - and who waged an expensive and successful fight in 2002 against the tracks to get it.

But that's not the only card the tracks are playing.

Rose said when voters agreed to give the tribes the exclusive right to operate casinos, the idea was that gambling would be confined to reservations.

What they didn't know, he said, is tribes can acquire other lands and, with the permission of federal officials, have them made part of the reservation, too, where gaming is allowed. And those lands need not be near the original reservation, as is being shown by the effort by the Tohono O'odham to acquire property adjacent to Glendale to build a $550 million casino and resort.

Sheila Morago, executive director of the Arizona Indian Gaming Association, bristled at the suggestion that the expansion plans by the Tohono O'odham should enter into the fight over casinos at tracks - and that voters in 2002 thought they were confining casinos to existing reservations.

"That's your perception," she said. "Has anybody ever asked them?"

Morago, citing a survey done for her organization, said 66 percent of those asked were opposed to casino-style gaming at horse and dog tracks.

Of course, the answer could depend on how the question is asked.

The tracks produced their own statewide poll showing that nearly 40 percent would definitely support casinos at race tracks if the money would mean no increase in overall taxes or providing funding for existing programs. Another 24 percent said they probably would support the expansion.

What the public thinks, however, is only one piece of the equation.

The tracks lost out in their 2002 ballot bid to get a piece of casino gaming when fewer than one out of every five voters agreed to support their measure. The alternative pushed by the tribes for exclusive rights for casinos slipped through by a 51-49 margin.

This time, however, the tracks aren't going to depend on a public vote. Instead, they are taking their plan for expanded gaming directly to the Legislature.

The first hints of that campaign began Monday when Rose's public relations firm peppered the House and Senate with small plastic horses with jockey riders. Attached were tags ranging from "End the gaming monopoly" and "Everyone's sacrificing but tribal casinos" to "Reduce the need for tax hikes."

There also were those seeking to parlay opposition to the Tohono O'odham Glendale facility into support for the tracks. Some of the plastic horses were tagged, "Casino in Glendale? They broke their word."

The need for cash - not just immediately but for at least the next three years - has lawmakers paying attention. Even House Speaker Kirk Adams, R-Mesa, said the option of "racinos" has to be considered.

How much could be raised - and how quickly - remains an open question.

New Mexico has casino-style gaming at its five racetracks. The levy there of 26 percent of net revenues generated $64.6 million in the 2008 budget year, the most recent figures available.

The tribes in that state, which has a population less than a third of Arizona, shared about $65.5 million in revenues.

By contrast, the deal that Arizona tribes got voters to approve in 2002 in exchange for the exclusive right to operate casinos produced about $87.2 million in revenue sharing that same year.

If the tracks get the right to operate casinos, that 2002 voter-approved measure allows the tribes to forego further revenue sharing with the state. It also permits them to operate as many gaming devices as they want - there is now a limit based on the size of each tribe - and also lets them start new forms of gaming now off-limits, including craps and roulette.

If the "racino" tax generates $500 million a year, that would more than make up for the lost revenue sharing from Indian casinos.