National Review: Mississippi gambles: the carpetbaggers are back

In February, the House of the Mississippi Legislature passed a bill amending the statute which sets forth the qualifications of competent jurors. The amendment deletes the disqualification of "common gamblers or habitual drunkards." One legislator explained the bill's passage this way: ". . . the legalization of casinos in Mississippi makes the gambling requirement unfair. You know now we encourage common gambling."

Mississippi didn't always encourage common gambling. In 1951, the Preparedness Subcommittee of the U.S. Senate Committee on Armed Services held a hearing in Biloxi on the subject of "Illegal Gambling Activities near Keesler Air Force Base." Parents of young servicemen had complained to their congressmen that gambling on the Gulf Coast was adversely affecting their sons. Indeed, two young lieutenants who owed large sums of money to the gamblers had tragically committed suicide. Senator Lester C. Hunt of Wyoming presided over the hearing.

At that time in Harrison County there were 1,257 illegal slot machines. Witnesses testified that servicemen lost between $500,000 and $750,000 a month (the air base's monthly payroll was $4 million). Major Alexander, the base's air police officer, testified regarding the two suicides and the general ill effects of gambling upon the boys, whose average age was 18. When asked if gambling was harmful to the personnel at Keesler, he replied: "Gambling is no good for anyone, airmen or civilians."

After 46 years, the 1,257 illegal slot machines have been replaced by 11,624 legal ones. And a former commanding officer of Keesler Air Force Base, Major General Paul Harvey, is now the executive director of the Mississippi Gaming Commission (MGC). Where honky-tonks once bordered the shoreline, towering tasteless hotels and massive garish casinos now stand. For generations, it was believed that illegal gambling could never be eliminated on the Gulf Coast. The solution was actually very simple. Legalize it.

Unfortunately, when Mississippi comes to mind, so does the word poor. Poor people, black and white; poor schools on every level; poor economic opportunities; poor leadership, political, business, and civic. Though unprepared for constructive changes, Mississippi was ripe for legalized gambling: so cheap to buy; so easy to influence; so predisposed to a quick fix. The Carpetbaggers have returned to Mississippi, and they are aided and abetted by local politicians, lawyers, developers, landowners, and speculators --Scalawags, so to speak. Poor comes to mind once more.

In Mississippi, few things happen quickly. But gambling was legalized so quickly that most people still don't know how it happened.

In March 1989, the Mississippi Legislature approved "Cruise Vessel" gambling. Only a year later, the Legislature greatly reduced the requirements for Cruise Vessels and defined a new category, Vessels. Vessels did not have to be under way but could simply be "on the Mississippi River or navigable waters within any county bordering on the Mississippi River." Dockside casino gambling was thus legalized.

The battle over the bill was fought in the 52-member state Senate. After extensive wheeling, dealing, trading, and pleading, the vote was 22 to 20 in favor of the bill. Ten senators took a walk. Thus, by a margin of 2 votes, with only 80 per cent of the Senate voting, the economic, political, and cultural makeup of the state was radically altered.

Shortly thereafter, the Legislature, in what was in name and fact an Extraordinary Session, passed the Mississippi Gaming Control Act (MGCA), which, among other things, approved dockside gambling "in the waters . . . which lie adjacent to the State of Mississippi south of the three most southern counties."

The entire scenario was carefully crafted. Since "Christian" legislators were a problem, they had to receive concessions. Of Mississippi's 82 counties, only 14 were permitted to exercise local options on "dockside" gambling. Presumably, that would leave 68 uninfected. It was exactly what the casino operators wanted; they knew they would lose a statewide referendum by a large margin.

So the high hurdle had been cleared, leaving only the low hurdles of obtaining voter approval in the 14 counties directly affected. When someone applies for a casino license, if the required number of registered voters in the county do not sign a petition in a timely manner, the governing board of the county must approve dockside casino gambling. If a petition is filed and a referendum is held, a vote in favor of gambling is final and definitive. Once the people vote yes, they can never again vote on the issue. But, if the people vote no the first time, they can vote again, an unlimited number of times, presumably until they vote yes. To date, 7 of 11 Mississippi River counties and 2 of 3 Gulf Coast counties allow casino gambling.

One legislator explained the economic Reconstruction of Mississippi this way: "It all happened so fast, we hardly had time to vote on the bill, much less read it." There had been no public hearing or study of the issues involved. No efforts were made to determine if casino taxes would be regressive in nature; no social-impact study was conducted regarding the costs owing to increased crime, compulsive gambling, demands upon highway and sanitation systems, or adverse effects upon existing businesses. The prevailing legislative attitude was: Vote for casino gambling and consider the problems after the fact.

Under the Act, the executive director of the MGC oversees the regulation of all licensed casinos. However, it was clear from the beginning that Paul Harvey intended to be much more than a regulator. For example, he said, "We're not limiting the industry in Mississippi under this commission. We're going to let free enterprise do its number." At one proposed site which was under attack from environmentalists, Harvey told proponents of the casino, "We're pulling for you. We want it to happen."

In short order, Harvey was criticized for being a cheerleader for the casino industry, and for alleged conflicts of interest because his son-in-law worked for a casino and his daughter worked as a law-enforcement agent for the Commission. In the fall of 1995, Harvey brushed off questions about his relationship with George Baxter, the former president of Jubilee Casino, who pleaded guilty to federal charges of laundering $200,000 in drug money through his casino.

Again, in August 1996, Harvey was criticized for being the only state regulator who sits on the board of the National Center for Responsible Gaming (NCRG), an organization formed and funded by the casino industry's trade organization, the American Gaming Association. Harvey says that because he's a reputable and ethical person, he has no problem serving on the board. Harvey is now chairman of the NCRG.

TO DRIVE through some of Tunica County's 40,000 acres of cotton on miles and miles of lonely roads is a strange experience. It is easy to forget there are people in the world. Sometimes you go many miles without even seeing another car. Then, very suddenly, the cotton gives way to a weird crop of monstrous tributes to kitsch --not just gambling halls, but also restaurants, bars, shops, clothing stores, hotels, motels, and even golf courses, what you might call a living, golfing, gambling community to amuse children of all ages.

It was predicted that the influx of the new casino "culture" would improve the grim economic conditions of Tunica County, and it has. Fewer people are on welfare and more have jobs. Unfortunately, that is only part of the picture. In most respects, the wide gaps which have always separated whites from blacks, economically, educationally, and culturally, have widened with the new glitzy affluence.

In December 1993, Phil Satre, president of the Promus Companies, at that time the parent company to Harrah's Casinos, was the guest speaker at a National Press Club luncheon. Clayton Boyce, the moderator, introduced Satre with deference bordering on reverence. He pointed out that, in addition to being an Elvis impersonator who knew all the words to "Rockahula," Satre had also once represented Mississippi's most famous native son in a Nevada lawsuit.

First, the honored guest wanted to clear up a misunderstanding. "In the debate about casinos, much of the moral argument against legalization is based upon the belief that gaming is mainly about money or about greed. It is not. It is about entertainment." When his casino opened in Tunica, Satre rejoiced that "adults of all ages, all races, and both sexes" played slot machines and blackjack together, celebrated together, and interacted "with one another in a comfortable and safe environment."

In fact, Satre's industry is alarmingly attentive to the characteristics of particular racial, religious, and ethnic groups. The first vote to approve dockside gambling in Harrison County (Gulfport and Biloxi) took place in December 1990. The plan was narrowly rejected. Another vote could be held a year later, and the casino interests geared up to win the second go-round. They engaged the services of Nancy Todd, the president of a political consulting firm specializing in gambling referenda, and Washington pollster Bill Hamilton, who, in Campaigns and Elections, described the campaign in these terms: "We were targeting lower incomes, Catholics, and black men. Those groups didn't have a moral problem with gambling and were the most in need of new jobs." Strong and effective efforts were made by Miss Todd to get out the vote. Those programs resulted in the largest turnout in the county's history, in which 57 per cent voted in favor of dockside gambling. "The mood was right," says Hamilton, "the moral issue wasn't about to sway the moderates while they felt their standard of living slipping away." In the lingo of casino proponents, a "moderate" is someone in favor of legalized gambling; an "extremist" is one who's against.

This is just one example of the racial, ethnic, and religious targeting used by the gambling industry. The Trump Taj Mahal in Atlantic City is so devoted to ethnic groups that it presents "themed events" on such occasions as Chinese New Year, Martin Luther King's birthday, St. Patrick's Day, and Columbus Day. Boyd Gaming Corporation's California Hotel in Las Vegas offers what its executive vice president and general manager, John Repetti, calls "the aloha spirit -- a feeling of the way people are treated in the islands." Eighty-five per cent of its customers are Hawaiians. Funny about that "aloha spirit": Hawaii is one of the two states, the other being Utah, that haven't legalized gambling.

LEGALIZED gambling leads to political control over individuals, communities, and local and state governments. In Mississippi, small-town career politicians with limited formal education are no match for the casino Carpetbaggers, who give the locals two words to recite to their constituents: jobs and revenue. The average politician in this state or in any other legalized-gambling state doesn't start out a pawn to the gamblers, but it doesn't take a high-school education to know the sources of campaign contributions.

If the casino industry is just another business, then why is it taxed differently from, say, General Motors or Home Depot? Why is it shaken down by every level of state and local government? Why does it pay annual fees, local option fees, and city and county fees on each gaming device along with monthly gross-revenue fees, state annual device fees, and even background investigation costs? One problem surely is eliminated by legalizing casino gambling: the irregular, haphazard method by which government got paid when gambling was illegal, with kickbacks having to masquerade as "fines." Under the new arrangement, you can supposedly prepare budgets, reallocate other revenue sources, and generally run things in a businesslike manner.

Not only are state and local governments receiving legal payoffs, the local Scalawags, once far more despised than the Carpetbaggers, are in hog heaven. Here's how it works. The large law firms in Jackson and in the local areas get retained, either by the casino itself, or by the parent company, or by one of the officers, or by someone in the industry. If a small firm happens to represent casino opponents, it is suddenly offered a lucrative retainer to represent some state or county board, commission, or agency. As a result, most firms are either committed to or neutralized by the casinos. And don't forget that legislators can also be lawyers and members of law firms. And former legislators can be lawyers, too, and so can former state officials. In fact, right now in Mississippi there are three former state Supreme Court justices who have represented casino interests.

Then there are the charities, the civic groups, the service clubs, the cultural societies, the private schools, and even some of the churches -- all the non-profit institutions which, back in 1951, Senator Hunt explained benefited from gamblers' desire to cultivate "the good will of the community." In the September 23, 1994, issue of the Biloxi - Gulfport Sun Herald there appeared a picture of John Connelly, the majority shareholder of President Casino Corporation, presenting to the Most Reverend Joseph Howze a check the size of a small billboard in the amount of $1 million payable to the order of "Catholic Diocese of Biloxi." Bishop Howze is a black man and a Roman Catholic, two of the casinos' "target groups." In spite of the picture, the article stated that the $1-million donation was, well, not exactly a donation. It was a "bequest guaranteed in Connelly's will." The article also said Connelly was "the primary financial backer of a $20-million hotel being built in Vatican City to house members of the Catholic hierarchy."

The attitude of the local elected officials is well illustrated by the following true story. One of the good-ole-boy local hustlers has a piece of land tucked way back on the bayou in an unspoiled, pristine natural setting. Even the birds have trouble remembering how to get there. People have to use a two-lane winding road. In spite of the property's remoteness, the owner came up with a creative use. Why not put a casino, marina, hotel, and golf course there? One local politico who would have to approve the plan said he hadn't had a chance to review it but was 100 per cent for it because of the revenue it would bring to the county. The mayor of the nearest town also said he'd welcome the revenue from such a development. And just to make sure he had a friend on the highest court, the casino applicant hosted a luncheon to benefit the Fellowship of Christian Athletes and to honor MGC member Victor Smith, who is in the oil and gas business, owns several religious bookstores, and was a former part owner of a Las Vegas casino.

The Department of Economic and Community Development proudly advertises that the state's thirty casinos "Put Mississippi Where It Is Today -- Right Next to Las Vegas." There's no turning back here, but other states can learn from us, if they care to, that if they gamble, they lose.