"I'd heard so much about it, and now I'm finally legal," says Katelynn Ward, as she played the nickel slots with her mom at the Mountaineer Race Track and Gaming Resort here.
The birthday girl made the one-hour trip from Boardman, Ohio, with her mother and both grandmothers, leaving behind one of only 15 states that have no legal slot machines.
Slots increasingly are a rite of passage for state governments in search of a lucrative new source of tax revenue. State and local governments raised about $6 billion from taxing casino gambling in 2003. Slot machines provided more than two-thirds of that revenue. That's double the amount of revenue that gambling provided five years earlier. As a result, more states are legalizing slots or considering it:
Even states that rejected slot machines may not be able to resist the lure of easy money. Although Texas, Maryland and Ohio turned them down this year, slots probably will return as a potential source of revenue because the governors or lawmakers in many of those states don't want unpopular sales, income or property taxes raised instead. And they don't want to see their residents cross the border to play the slots and provide taxes to neighboring states.
"Slots were the only plausible vehicle for property tax relief, which our state desperately needs," says Pennsylvania Gov. Edward Rendell, who led the fight for slot machines in his state. "The Legislature is averse to raising taxes for anything, even if it means lowering another one."
And with casinos at its eastern and western borders, Pennsylvania feared prohibiting casino gambling was a fool's game. "It's not like we're bringing a new vice to Pennsylvania," Rendell says. "The question was whether we wanted to keep some gaming revenue here or to send it to Atlantic City and West Virginia."
The allure of slots
The popularity of slot machines has soared with the ability of computers to accept multiple bets at the same time and create jackpots that pay $5,000-$10,000 but can run to more than $1 million.
PROPOSALS
States continue to turn to slot machines as a source of revenue. Key slot machine ballot issues that voters may decide this year:
California. Proposition 68 would permit 30,000 slot machines at five racetracks and 11 card clubs, effectively ending the monopoly Indian tribes have on casino gambling in the state. Local governments would get one-third of slot machine profits. Proposition 70, pushed by Indian casinos, would allow unlimited expansion of slots on Indian reservations. The limit is now 2,000 machines per casino. The ballot measure calls for casinos to pay the state's 8.8% corporate tax rate on its slot profits. Gov. Arnold Schwarzenegger opposes both measures.
Florida. The state's voters are expected to decide whether voters in the Miami area can legalize slot machines at horse tracks, dog tracks and jai alai facilities.
Nebraska. The state Legislature approved a ballot measure to let voters consider two casinos. A petition drive also is underway to let voters authorize two casinos, plus 4,900 additional slot machines at restaurants, bars and racetracks.
Washington, D.C. Slot machine advocates want voters to approve 3,500 machines in a poor neighborhood. The city is investigating whether the signatures gathered for the ballot measure are valid.
On today's computerized slot machines, a bettor can make hundreds of bets an hour by pushing a button — no lever pulling or coin dropping is required. The casino's and tax collector's takes vary by state. But a typical slot machine keeps 8 cents of every dollar bet to be split between the house and the state. The rest is thrown back into a jackpot pool.
Slot machines based on popular TV shows, such as Wheel of Fortune, have been huge hits.
"Anyone can walk up to a slot machine and know how to play. There's no intimidation factor, like in table games," says Steve Bourie, author of American Casino Guide, 2004.
All of this worries gambling opponents. They say slot machines are the most addictive form of gambling and bring bankruptcies and despair. "These are money-sucking machines that prey on the most vulnerable, especially senior citizens," says Dianne Berlin of the National Coalition Against Legalized Gambling.
Supporters of slot machines say problem gamblers can best be helped when gambling is legal and treatment programs are funded.
Casino turnaround
The Mountaineer casino, with 3,200 slots, is a classic example of why states find it hard to say no to slot machines.
Located on an economically depressed sliver of West Virginia that pokes between Ohio and Pennsylvania, the Mountaineer Race Track was on the verge of bankruptcy when slots were approved in 1994.
"The horses were one step above the glue factory," says Tamara Pettit, the state legislator who helped win approval for slot machines and who now handles public relations for the track and casino.
Weirton Steel, the area's dominant employer, had started shrinking from 14,000 employees to its current 1,900.
Seventy percent of local voters approved slots.
Today, the track and casino employs 1,740, up from 340 in 1994. In addition, the number of jockeys, trainers and other horse people working at the track has tripled to 3,600.
Mountaineer and two other horse track and casinos brought in $271 million to the state last year {ndash}{ndash} about 8% of total tax revenue. Out-of-staters paid that bill. Fifty-seven percent of gamblers at Mountaineer are from Ohio; 35% are from Pennsylvania; 2% are from West Virginia.
Margaret Schramm, 68, a retired school food service manager from Akron, Ohio, won a $6,000 jackpot when she started coming two years ago. "The machine wouldn't stop ringing. I thought I'd broken it. Then a guy said, 'Sit down, lady. They'll be here in a minute to tell you what you've won,' " she says.
Her luck hasn't always been so good. She lost $500 in one day last month. "What can I say? It's fun, and I can afford it," she says. She plays for eight hours once a week.
The casino has been a savior for many steelworkers.
Engineer Thomas Yourd was laid off from Weirton Steel in November after 31 years. He now oversees electrical maintenance at Mountaineer.
"If the casino wasn't here, there'd be little hope," he says.
