STRICTLY BUSINESS: COMMISSION MAY STUDY GROWTH OF GAMBLING IN THE U.S.

Sen. Paul Simon, D-Ill., who co-authored Senate Bill 704, which establishes a commission to study the effects of gambling in the United States, says it's time to look at the ledger to see what government-backed gambling is doing to our society."

Simon, in a specially prepared report, said there are now 500 casinos in 27 states, twice the number of five years ago, with Americans legally wagering $500 billion a year, compared to $17 billion in 1974. Every state but Utah and Hawaii have lotteries, horse racing or some other form of legalized gambling.

Simon's bill was approved last week.

The Senate legislation, approved by voice vote, will create a nine-member commission for a study on the relationship between gambling and crime and on gambling's social and economic impact.

The people facing the toughest decisions on whether to permit gambling are leaders at the local level, said Sen. Dick Lugar, R-Ind., a co-author of the legislation. The gambling study, noted Lugar, will help communities by providing them with objective, unbiased information they can use to make their own informed decisions about gambling.

Limited subpoena power

The commission will have two years to report its findings to the president, Congress, the nation's governors and Indian tribal governments. A large number of gambling casinos (more than 100) are owned by Indian tribes).

The House passed its version of the bill (HR497) in March, but action on the Senate bill was stalled when supporters charged that some senators, backed by the gaming industry, had gutted the commission of subpoena powers.

In a compromise, the final version gives the commission authority to hold hearings and limited power to subpoena documents and written answers to questions, but bars it from public disclosure of confidential information to safeguard privacy and protect trade secrets.

The House version contains stronger subpoena powers, but Senate sources said they expect the House to accept the Senate version and send the bill to the president for signature.

A 'witch-hunt' concern

President Clinton, during a trip to Las Vegas in June, endorsed limited subpoena power, saying it would allow the commission to get the information it needs "but would make sure it wasn't going to be a witch-hunt, which was my concern all along."

Frank J. Fahrenkopf Jr., president of the American Gaming Association, said the Senate bill "strikes a fair balance" between giving the commission the power it needs and "recognizing the privacy rights of our customers and the privileged business information of our companies."

At the same time, Bernie Horn of the National Coalition Against Legalized Gambling said his group was "satisfied" with the legislation and predicted the commission would be able to find evidence of the negative effects of gambling, such as "the casino industry especially makes an enormous percentage of its profits from gambling addicts."

Simon, of Makanda in deep Southern Illinois, submitted a lengthy report on "The Explosive Growth of Gambling in the U.S." on the Senate floor last year.

Simon is retiring from the Senate this year. He will join Southern Illinois University, where he will teach politic science, history and journalism.

10 Illinois riverboat casinos

"Local governments, Indian tribes and states, all desperate for revenue, increasingly are turning to what appears to be a quick and easy solution -- legalized gambling," noted Simon in his report.

Temporarily, it often works, noted the report. Poverty-stricken Indian tribes suddenly have money. Cities like East St. Louis, Ill., with every possible urban malady, find themselves with enough revenue to take care of minimal services.

Ten Illinois gambling riverboats have been around more than three years.

Simon, in his report, points to four questions:

-- How rapidly is this phenomenon growing?

-- What are its advantages?

-- What are its disadvantages?

-- Is there a role for the federal government to play, and should it play a role.

Simon, Lugar and Rep. Frank Wolf, R-Va., the House sponsor, stress that the commission would not outlaw legal gambling.

Four casinos in Indiana

Four riverboat casinos have opened in Indiana -- two in Gary, one in Evansville and Hammond.

The two developers at Gary have promised a revitalized downtown hotel, scholarship and more money in the budget as part of a $269 million package.

About $238 million will be used for the Trump Casino and Majestic Star Casino boats, as well as construction projects at their docking site. Another $31 million was pledged for projects away from Buffington Harbor,

The spending plan is similar to what Donald Trump and Donald Barden promised when they received certificates of suitability from the Indiana Gaming Commission in December 1994. The certificates were the first step toward permanent licenses, and both casinos opened in early June.

Trump, the real estate magnate and owner of Trump Casino, and Barden, who owns the Majestic Star, each promised to give the city 3 percent of their adjusted gross receipts, in addition to the 5 percent required by state law.

That could mean up to $30 million a year for the city, which currently has a budget of $67 million, King said. Most of the money will go toward infrastructure, capital improvements and debt reduction, as well as seed money for matching grants.

Indian request turned down

Meanwhile, a proposal for an Indian casino at Springfield, Mo. has been turned down.

The Springfield City Council turned down a $500 million proposal by the Kickapoo Tribe of northeast Kansas and Foxwoods Management Co. to build the complex, and hoped the council would let city voters decide the issue in November.

But Mayor Lee Gannaway said Monday he declined the offer after polling city council members by phone last weekend.

The council's decision ends more than a year of private discussions between Springfield officials and business leaders and representatives of the Kickapoo and Foxwoods Management Co. of Atlantic City, N.J.

The casino would be owned by the Kickapoo Tribe and managed by Foxwoods, a corporation owned by the Mashantucket Pequot Tribe of Connecticut. The tribe operates the world's largest resort casino, Foxwoods Resort Casino, in Mashantucket.

"June swoon" in Illinois

Adjusted gross receipts and admissions were down in Illinois in June, with the dip coming from two operations -- Empress Casino and Harrah's -- at Joliet.

Attendance at these two casinos dropped more than 100,000 from May to June and receipts were down 16 to 17 percent.

An Illinois Gaming Board report released recently showed adjusted gross receipts -- total income minus payout to gamblers -- were down 9 percent, from $103.4 million in May to $93.3 million in June.

Admissions were also down, from 2.3 million in May to 2.1 million in June.

An Illinois Gaming Board representative said the June debut of riverboat casinos in Gary and Hammond undoubtedly affected the two Joliet boats.

Illinois gambling receipts were led by the Grand Victoria in Elgin, with $18.5 million, down only 2 percent from May.

St. Louis area riverboat casinos in Illinois include the Casino Queen, with $11.6 million in winnings and the Alton Belle at Alton with $6 million.

Other Illinois casinos and winnings in June were Par-A-Dice, East Peoria, $7.6 million; Casino Rock Island, Rock Island, $1.3 million; Empress I and II, Joliet, $14 million; The Silver Eagle, Jo Davies, which reopened in May, $466,000; Players International, Metropolis, $6.4 million; Harrah's North Star and South Star, Joliet, $15 million; and Hollywood Casino, Aurora, $12.3 million.

Players at Metropolis remained on the "plus" side, increasing its receipts 5 percent from $6 million to $6.4 million from May to June. Admissions were also up 5 percent, from 159,302 in May to 167.393 in June, an average of 5,500 admissions a day.

B. Ray Owen is business editor of the Southeast Missourian.