Sunday, September 18, 2011

A response to Brown's letter to the ANCs

The sponsor of the bill authorizing Internet gambling and mini-casinos in District neighborhoods, Councilman Michael Brown, sent out a letter Sept. 16  to the ANCs defending his proposal and correcting what he terms as “gross misstatements by a few vocal, yet misinformed, members of the public” about the plan to expand gambling in the District.

What follows is a brief summary of some of Brown’s major points in his letter to the ANCs. To see the councilman’s full letter, please go here.

What Brown claims: The councilman argues that “the iGaming provision was properly vetted through Council procedures” similar to other measures. Moreover, Brown says he briefed council colleagues at a breakfast prior to adoption and cites articles that appeared from Dec. 7 through Dec. 9, 2010, in the Washington Post, Washington Times and other publications.

Response:  The District adopted this law in its supplemental budget about two weeks after those articles appeared. That was hardly sufficient notice. There was no public hearing on this legislation or opportunity for public comment. Although this legislation had been in the works for months prior to these initial news reports, its adoption was clearly engineered to minimize public notice.  Brown has no defense here.

What Brown claims: The councilman argues that his gambling plan won’t hurt the poor. “Many have alleged that iGaming will most detrimentally affect the poorest and most vulnerable of our residents. This is not the case,” writes Brown.  In order to gamble on the Internet “a player must have a bank account, a computer and an Internet connection. Our neediest residents generally do not have all three items,” he writes. Further, argues Brown, “the limited amount of research on the demographics of individuals who play online games shows that the majority of players make in excess of $60,000/year.”

Response:  Gambling will be allowed at restaurants, bars and hotels as well as in the home.  It’s not entirely clear, based on what’s been disclosed so far, just how the financial aspects of this plan will work.  What is known is that gamblers will have to set up a gambling account and will be limited to $250 a week. They will have to use debit cards. But will gamblers be required to use a debit card that links directly to a bank account? Will they be able to purchase a debit card (think gift card) to use instead?

Brown suggests that someone who is poor may not own a computer. But why will anyone need to bring a computer to a bar, restaurant or hotel to gamble? What’s to stop a business from making computers available to patrons? The legislation doesn’t prevent a business from supplying a patron with a computer, and the DC Lottery’s  FAQ is silent on this issue.

Brown argues that online gaming attracts people with higher incomes. But he is comparing people who use offshore operations against an entirely new enterprise: A government sponsored and promoted online gambling operation.  This is not a fair comparison, and it is one of the reasons why this legislation needed far more public scrutiny than it received.

One other point: Among the games that DC Lottery plans to offer is bingo. Is this the type of game that is aimed at high-income earners or fixed-income seniors?

What Brown claims: Brown argues that the law will not lead to the creation of gambling parlors. He writes: “It has been alleged that so-called iGaming hotspots are tantamount to ‘gambling parlors’ full of gaming terminals. This is not true.”

Brown says that “there will be no gaming terminals in the District of Columbia, as this is prohibited by Federal law. All iGaming will be played on a personal computer.”

Response: There is nothing in this law, as pointed out earlier, to prevent a bar from making a personal computer or tablet available to a patron. A bar could lease or rent a PC to a customer who is then free to use it for Web browsing or for gambling. The PC isn’t being specifically supplied as a “gaming terminal,” but it could be used as one, and that is the key point.

How will gambling parlors emerge? A bar or restaurant that gets a license to offer a gambling “hot spot,” will be able to operate it from 10 a.m. to 4 a.m. each day. These businesses may begin to draw in new types of customers specifically interested in gambling. As bars and restaurants gain more revenue from gambling-focused customers, these businesses will naturally want to cater to these customers. This is how mini-casinos may emerge in neighborhoods.

What Brown claims: “I do not support any type of slot-machine gaming in the District of Columbia. I have made my position very clear to the Mayor and the Director of the DC Lottery. This legislation does not authorize the installation of any type of slot machine or gambling device in the District of Columbia.”

Response:  Brown’s statement sounds heroic, but it is a gross misstatement of the public record. The councilman already pointed out in his letter that federal law bars gambling-specific devices. What Brown fails to note is that DC Lottery plans to offer an electronic version of slots online.

Councilman Jack Evans held a public roundtable in June on the legislation. A DC Lottery official was asked about slots. The Washington Post reported:
“Do you expect to be offering slot machines?” asked council member Tommy Wells.
“Yes,” responded Buddy Roogow, the lottery chief. After a moment, Roogow added: “They do not meet the legal definition of slot machines. They are in fact random number-generated machines.”
Brown’s letter to the ANCs only adds to the case that this is a bad law. It helps to define the questions and to expose the areas that need more examination, such as whether this law will increase gambling addiction in the District.

Although the public and the ANCs were not given a chance to ask questions and express views before adoption of what is clearly major legislation, efforts to establish online gaming appear well in place.

Mayor Gray, who has been largely silent on this law, appears to be supporting it and it’s unclear whether the council’s opponents have enough votes to repeal this bill.

It’s distressing and utterly depressing that the District’s government has taken a path that will lead to no good end for District neighborhoods and its citizens.

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