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LOCAL & US/WORLD NEWS columbian.com » News » Local News  

Economy deals cardrooms lousy hand


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Friday, May 09, 2008
By JEFFREY MIZE, Columbian Staff Writer

La Center’s four cardrooms, after beginning to rebound from the statewide smoking ban that took effect in 2006, now could be feeling the sting of a weak economy.

Gambling revenues at the cardrooms, the primary employers and taxpayers in one of Clark County’s smallest city, were down 5 percent for the first three months of this year compared with the same period in 2007.

The four cardrooms brought in $8.4 million in the first quarter, based on the city’s 10 percent gambling tax.

“I suspect it is due to the economy,” said Suzanne Levis, La Center’s finance director who closely monitors her city’s primary revenue source. “Gas prices are certainly a lot higher.”

Not everyone is convinced that economic issues are driving down gambling receipts. Gambling, along with cigarettes and liquor, is a vice often considered immune to economic downturns.

“I don’t think immune is a good word,” said Dolores Chiechi, executive director of the Recreational Gaming Association, which represents nontribal cardrooms. “I think our industry is one that people continue to spend their recreational dollars.”

The Last Frontier and New Phoenix are the state’s two top-grossing cardrooms. La Center’s other two cardrooms, the Palace and Chips, rank fifth and sixth for gambling revenues among 82 house-bankrolled cardrooms statewide.

George Teeny, owner of the Last Frontier and New Phoenix, hasn’t given an interview to the press for years. John Bockmier, a consultant who represents the cardrooms on political and government issues, said he isn’t involved with business operations.

“Has the economy affected my clients’ business? They have not said anything to me about it,” Bockmier said.

But there’s little doubt the indoor smoking ban took a slice out of the cardrooms’ revenues.

In November 2005, voters approved a statewide measure that prohibits smoking in public buildings and within 25 feet of doors, ventilation intakes and open windows.

In 2006, revenues at La Center’s four cardrooms were down 10 percent from the previous year. Gambling revenues rebounded slightly in 2007, up 4 percent from the previous year, but they were almost $2.5 million lower than pre-smoking ban levels.

Chiechi said most cardrooms saw at least a 13 percent drop in revenues following the smoking ban. Patrons who want to smoke while they gamble can go to tribal casinos, which don’t have to comply with the smoking ban and other state and local laws.

“There has been some rebound in effect, that some players have come back,” Chiechi said. “But for the most part, our revenues are going in the opposite direction.”

La Center’s cardrooms are fierce opponents to the Cowlitz Tribe’s plans to build a $510 million casino two miles west of their businesses. Projections indicate the Cowlitz casino could cause La Center to lose 66 percent of its gambling revenue.

Not all is gloomy. La Center’s cardrooms could get a boost as Northwest residents receive checks for $600 or more as part of the federal economic stimulus package approved by Congress and signed by President Bush.

Oregon already saw a spike in its state-sponsored video poker and slots from a similar taxpayer windfall. In early December, state officials mailed some $1.07 billion in “kicker” rebates. The Oregon Constitution stipulates that if revenue collections exceed forecasts by at least 2 percent, the surplus must be returned to taxpayers.

Michael Kennedy, senior economist with the Oregon Office of Economic Analysis, estimates the kicker checks boosted the Oregon Lottery’s video proceeds by $2.5 million to $3 million for the following two weeks.

Kennedy said he already has received his federal stimulus payment, but he has no plans to head north to stimulate La Center’s economy.

Levis, city finance director, wonders if a federal infusion of discretionary cash will show up in La Center’s gambling taxes in coming months.

“I have a little note in my spreadsheet to watch for it,” she said.



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