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Editorial: Plan to expand racino gambling will require very cautious consideration from lawmakers

State lawmakers are at a monumental fork in the road now that racetrack casino owners have proposed a major expansion of their operations. And as baseball legend Yogi Berra might have said, they’re going to have to take the fork – one way or another.

Supporters say the changes could help racetracks, horse racing and the state’s economy as a whole. Opponents argue the economic benefits of expanding gambling aren’t worth the societal costs. And the changes would surely blow up the state’s current compacts governing tribal casinos.

On the one hand, the proposal would allow the state’s five racinos to increase revenues – and the amount they share with the state – by having an unlimited number of video slot machines (vs. the 600 per casino allowed now) and adding table games and on-site sports betting parlors. All gambling would be allowed 24 hours a day (vs. the current 18). It would also allow alcohol service and ATMs on casino floors, perks for special guests like free hotel rooms and golf games, lines of credit for gamblers and online gambling.

On the other hand, the state could lose roughly $70 million it gets annually under its compacts with tribal casinos, which limit hours and gambling options at the racinos. And there is the very real toll on New Mexicans and others who will challenge the house at all hours of the night, drain their accounts at ATMs that allow unusually large withdrawals at one time, and lose much more than their discretionary money with lines of credit or “markers.”

It’s a frying-pan-into-the fire choice for lawmakers.

Racinos – combinations of race tracks and casinos – say they need to step up their game and enter the 21st century of gambling. They have long chafed under the competitive disadvantages they have with the tribal casinos – which have no limits on the number of slot machines, hours of operation or a requirement to host horse racing. Horse racing is an expensive business and likely wouldn’t be viable without its 20% of racinos’ net win from gamblers; in fact racinos mostly have simulcasts of off-site horse races to meet the regulatory requirement.

The state’s five licensed racetrack casinos generated $241 million in net win in fiscal 2019, paying $65 million in gaming taxes and $48 million to the Horsemen’s Trust for purses. An economic study initiated by the racinos and the New Mexico Horseman’s Association estimates racinos would pay $40 million more in taxes annually under the expansion, depending on growth at each site. (No mention of the $70 million lost from tribal casino payments.)

Yes, horse racing is a way of life for some. And yes, state officials love tourism and the money it brings, and the state’s casinos and racinos are a big part of that. The governor and state lawmakers of both major political parties frequently talk about the need to diversify the state’s economy, and expanding gambling is one way to do that. The nature of gambling is changing, with internet and sports gambling viewed as the new frontiers.

But given the financial toll to gamblers, is it the “entertainment” the state wants to expand? In New Mexico 40% of the population is on Medicaid and one in four residents is on food stamps. Nearly 80% of New Mexicans have less than $10,000 in savings, and about 12.2% of our senior citizens live in poverty.

Dr. Guy Clark, an Albuquerque dentist and chairman of Stop Predatory Gambling New Mexico, is vocally opposed to the expansion plan, especially the online component. He says not only is online casino gambling the most addictive form of gambling available, but efforts to prevent minors from participating online are futile.

Sunland Park Racetrack and Casino general manager Rick Baugh notes the horse racing industry has made strides dealing with people addicted to gambling. Baugh told the Journal’s Mike Gallagher the racinos want “people who know this is entertainment and have the discretionary dollars to enjoy it.” But how are they going to verify that at the casino door?

The 38-page draft legislation doesn’t yet have any sponsors, which could be telling. The Legislative Finance Committee is scheduled to hear from the industry about the proposal at its Oct. 1 meeting. Among the industry talking points for the LFC is that it allows New Mexico to “join the big leagues in the gaming world.”

It will be up to New Mexico’s lawmakers if adding things like six hours of operation into the wee-est of hours and liquor to soak up inhibitions is the “big leagues” New Mexico needs to join. Given our state’s entrenched poverty, and its track record of gambling addiction that includes an apparent suicide by a school district bookkeeper and a conviction of a secretary of state, it’s difficult to see how a major expansion of gambling that helps the racino folks wouldn’t have an outsized negative effect on the general population.

This is not the time to place a quick bet or roll the dice.

Lawmakers should consider the gambling expansion proposal very cautiously, and make sure all the cards are on the table when they make their decision.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.