Their estimated $231 million income, after prize payouts, will nearly  equal the state's take from the Oregon State Lottery.  But for the most part, the tribes' gambling income won't be taxed,  regulated or even disclosed. In 10 quick years, Oregon has lurched from outlawing most commercial  gambling
to offering more types of games than Nevada. It is spending  millions to promote them. And this all has happened with little public  input.

When all of the tribes' casinos are fully operating next year, they  will employ about 2,600 people, gross $231 million after paying winning  bettors and have a combined annual payroll of $46 million. The gross  earnings estimate is based on accepted gaming formulas, tested in Nevada  and in tribal casinos in Minnesota, that project earnings based on the  number of video slot machines. The slots
typically provide 70 percent of  a casino's earnings. Counting the casinos, lottery and racetracks, Oregon's gambling  industry in 1996 will directly employ at least 3,575 people -- more than  worked this year at Nike Inc. or Weyerhaeuser Corp.

A three-month inquiry into the new tribal casinos by The Oregonian –  to be detailed Sunday and Monday -- shows that:

   *State and federal oversight of the casinos is extremely limited. The  federal Indian Gaming Regulatory Commission, for example, has only eight  investigators to cover 139 gambling operations in 24 states.

    *Tribal oversight of the casinos could be risky. As sovereign nations,  tribes appoint their own gaming commissions, which include members who  share in the casino benefits. This is akin to putting directors of the  Mirage or the Flamingo on the Nevada Gaming Control Board.

    *Millions of the tribes' dollars are going to professional gambling  companies based in Nevada, New Jersey and California that put up  development money for the casinos. Three of the companies have obtained  management contracts giving them 30 percent of the casino profits. The  companies also get loan payments.

    *One Oregon tribal leader, who made a deal with a California company  to develop a huge casino in North Bend, obtained a contract guaranteeing  him a $500,000 payment if he loses his job.

    *If courts rule in their favor, at least two Oregon tribes hope to set  up casinos off their reservations and nearer to urban population centers,  including Salem, Eugene and Medford.

    - -

As the casinos open and compete with the Oregon lottery for gambling  dollars, some critics predict a taxpayer backlash.  Because the tribes' casinos will pay no taxes or publicly share  revenue, they could divert money from the Oregon State Lottery -- which  earned the state $252
million last fiscal year -- forcing taxpayers to  dig deeper into their pockets to finance schools and government.

Possibly.

A more widely held scenario is that Oregonians' appetite for gambling  can't be satiated and that the tribal casinos simply will expand the  market.

Instead of drawing customers away from the lottery -- which  contributed more money to the state general fund last year than any other  state revenue source except the income tax -- tribal operations are  likely to create more gambling and a whole new crop of gamblers, predicts  Eugene M. Christiansen, a prominent gambling consultant.    "I don't see any end to it," Christiansen said of the tribal boom.  "Not in my lifetime. Not in North America."

Even the Oregon State Lottery's own sales projections point to an  expanding market of gamblers, and there is hard evidence that people will  gamble more if given the opportunity.

For example, when the lottery first offered video poker in 1992 and  had only 897 machines in the entire state, the average weekly earning for  each machine was $336. Four years later, with 7,437 machines available,  the average weekly take nearly tripled to $957 a machine.

Howard J. Shaffer, a gambling addiction specialist at Harvard Medical  School, says that results partly from the fact that 80 percent of the  money -- whether played in the machines or casinos -- will come from the  20 percent of patrons with the heaviest gambling habits.
     - -
Here's how the Indian casinos in Oregon are shaping up:

CHINOOK WINDS, Lincoln City
The Comstock Hotel and Casino of Reno, Nev., a private partnership,  loaned the Confederated Tribes of Siletz at least $3.9 million to  establish the Chinook Winds Gaming Center in Lincoln City, and Comstock  manages it for a cut of the profit. The Siletz, with Comstock backing, tried originally to put a casino on nonreservation land in Salem. They  settled for Lincoln City only after then-Gov.
Barbara Roberts blocked the  Salem site.  The Siletz are pursuing an appeal in federal court that would allow  the off-reservation casino and open the door for similar projects by  other tribes.
Meanwhile, the Siletz are running a temporary casino near  the beach while constructing a permanent building next door that will put  more than three acres of gambling under one roof.

THE MILL, North Bend
Full House Resorts Inc. -- an Indian Wells, Calif., company partly  owned by former Chrysler Chairman Lee Iacocca -- spent more than $10  million lavishly remodeling a North Bend plywood plant into a casino for  the Coquille Tribe. Full House leases the property from the tribe, which  leases part of it back for the casino. The original deal called for Full House to receive rent and loan  payments as well as a cut of profits from The Mill, as the casino is  known. Both Full House
and the casino's top manager, Bruce Anderson, get  $500,000 "golden parachute" payments if the deal unravels.
 Full House recently revised the contract and is in the process of  turning the financing over to GTECH, a giant Rhode Island gambling  equipment manufacturer that runs the Oregon State Lottery's on-line  games. Meanwhile, Coquille officials have discussed putting casinos  off-reservation in Eugene and Medford, according to sources outside the tribe.

WILDHORSE, Pendleton
Capital Gaming International Inc. of Atlantic City, N.J., loaned the  Confederated Tribes of the Umatilla Indian Reservation $7.5 million to  build the Wildhorse Gaming Resort near Interstate 84 east of Pendleton.  Besides collecting loan payments, Capital gets about 30 percent of the
 casino's profits under a five-year management contract.

COW CREEK, Canyonville
In another deal, Capital loaned the Cow Creek Band of Umpqua Indians  $1.28 million to help finance the Cow Creek Gaming Center along  Interstate 5 near Canyonville, south of Roseburg. Earlier this month the  Cow Creeks bought out the Capital contract and now run the casino
 themselves.

FIVE BEAR, Coos Bay
Capital Gaming had an agreement with the Confederated Tribes of Coos,  Lower Umpqua and Siuslaw Indians to develop and manage a casino in Coos  Bay. But the tribe dropped Capital earlier this month and began talks  with ROI Inc., another New Jersey company started by former Capital  executives.

SPIRIT MOUNTAIN, Grand Ronde
John Hancock Insurance Co. loaned $19 million to build and equip the  $25 million Spirit Mountain Casino for the Confederated Tribes of the  Grand Ronde Community. Located on Oregon 18 between McMinnville and  Lincoln City, the casino opened Wednesday under tribal management.

INDIAN HEAD, Kah-Nee-Tah
The Confederated Tribes of Warm Springs have invested $6 million of  tribal money to install a small casino at the tribes' popular Kah-Nee-Tah  resort 70 miles east of Portland near U.S. 26. Like the Grand Ronde, the Warm Springs are running their own gambling  operation, hiring experienced staff instead of signing contracts with  management firms. The only Oregon tribes without definite gambling plans at the moment  are the Klamath, near Klamath Falls, and the Burns Paiute Tribe of remote
southeastern Oregon.
    - -

Regulation and oversight of the Indian casinos remain major questions  swirling around these new enterprises. That's not to say that tribes can't effectively run their own casinos.  In fact, throughout the nation, many tribes have proven to be savvy  managers and gambling entrepreneurs, running clean, crime-free programs.  Four tribes in San Diego County, for example, are widely praised not only  for managing casinos that reap combined gross revenues exceeding $250  million annually but also for their progressive community service  programs.

Still, Indian casinos have not been immune to infiltration by the  occasional corrupt individual or even organized crime:

    *In 1993, Chicago mob boss John "No Nose" DiFronzo and his gambling  consultant, Donald "The Wizard of Odds" Angelini, were convicted of  trying illegally to take over gambling operations on the Rincon Indian  Reservation near San Diego.

    *In May 1994, four people were charged with racketeering, illegal  gambling and money laundering in an alleged scheme involving rigged slot  machines on the Morongo Indian Reservation near Palm Springs, Calif.

    *Last month, Darrell "Chip" Wadena and two other officials of the  White Earth band of Chippewa Indians in Minnesota were charged in a  44-count federal indictment with stealing more than $400,000 by rigging  bids at the band's Shooting Star casino.

Part of the problem is that federal oversight of the Indian casinos  has turned out to be a paper tiger.  The National Indian Gaming Commission, for example, remained virtually  an empty shell as Congress provided little money to hire a staff. The  commission didn't even have an office or enough commissioners to make  legal decisions for nearly four years after it was created in 1988, and  it didn't hire its first investigator until 1993, five years after the  Indian Gaming Regulatory Act
was passed.

Today the federal commission still only has eight investigators to  cover 139 tribal gambling operations in 24 states. By comparison, the  Nevada Gaming Control Board has a staff of 450 and an annual budget of  $20 million.

In addition, legal jurisdiction is fragmented. The Indian Gaming  Regulatory Act puts bingo and similar games under the tribes and the  Indian Gaming Regulatory Commission. But it puts casino games, such as  slot machines and craps, under whatever rules the tribes can negotiate  with the states.

Oregon's state-tribal compacts -- casino gambling agreements -- spell  out the numbers and types of games that each casino can have and give the  Oregon State Police considerable access to casino offices and records.   Day-to-day security is provided by tribal gaming commission employees  as state police personnel generally remain in their district offices.   Nelson Kempsky, the executive director of the Conference of Western  Attorneys General, says state oversight of tribal casinos is conceptually  flawed. "In Nevada, the state gets around 40 percent of its total income from  casino
gaming, so they have an awesome incentive to make sure the count  is correct, and the rules are followed," Kempsky said. "But a state  regulating Indian gaming has no financial incentive because the state  gets no money from it."

Even the compact requirements that sound good on paper don't really  amount to much, some experts say.   For instance, Oregon's tribal compacts require casinos to have annual  certified audits. But A. Scott Bodeau, chief lawyer for the Nevada Gaming Control Board, says the requirement may not mean much without a program  of surveillance and the ability to freeze a counting room without notice.

The basic inventory of a casino, Bodeau says, is cash, and auditors may be left adding up numbers that may or may not be real. Another problem is the shortage of technical experts. "One of the hardest jobs," one law enforcement official said, "is trying to find people who have a combination of electrical engineering and computer skills to have a clue what the (video slot) machines are doing."

That makes the tribal boards primarily responsible for watching out  for cheats and skimmers and for deciding how the profits are to be put  into community projects or divvied up among members.

Joe H. Lane, the chairman of the Siletz Tribal Gaming Commission,  wonders why anyone would worry about tribal members regulating their own  casino. "We don't see that as a conflict," said Lane, who once headed the  Marion County Republican Party. "We are overseeing our own interests, so  we should be more concerned than anyone else."

Craig Dorsay, a Portland lawyer who represents the tribes, agrees. "Do  you have to have people from Washington and Nevada on the Oregon Lottery  Commission?" he asked facetiously.   He points out that Indian tribes are sovereign nations and are no more  obligated to invite outsiders to oversee their business than Oregon would  be.

Nevertheless, some tribes, including the Grand Ronde, do have  nontribal members on their gaming commissions, including people with  accounting and law enforcement backgrounds.
    - -

Who, exactly, will benefit from the casinos?

It should be the tribal members, as new jobs are created, and the  gambling profits are funneled to social services and economic  development. None of the Oregon tribes is considering giving money  directly to members. And, of course, the management companies get their  cut first. Of about 36,000 Oregonians who identify themselves as Native  Americans, only about 15,000, or 42 percent, belong to tribes that own  casinos.  Requirements for tribal enrollment vary.  Some, like the Grand Rondes, accept as little as one-sixteenth Indian  blood. Others, like the Warm Springs, require as much as
one-fourth  descent.  Few of the enrolled members of most Oregon tribes live traditional  lifestyles on reservations. Most live somewhere else, and about a third  typically live out of state.

But Stephen D. Beckham, a history teacher and Indian scholar at Lewis  & Clark College, says casinos may revitalize tribes where government  programs have failed. "This particular form of economic development does appear to be  working," Beckham said. "It has created a new infrastructure. It's  generated jobs. It has enabled a number of native people for the first  time to at least get out of underemployment and some instances into full  employment."

In other parts of the country, a few small tribes with very large  casinos have turned their members into multimillionaires. But in Oregon, tribal leaders talk more about jobs and using casino  earnings as a springboard for other types of community development. "Our job is to set up the business and run it and make it profitable,"  said Bruce Thomas, the president of the Grand Ronde tribe's Spirit  Mountain Development Corp., "and the tribe then decides how the revenue  is distributed. And I can tell you that there are lots of needs.  "The tribal elders that live out here need housing. Education is lower  than the national average, and we need to solve that problem. Health care  is a big concern. Retirement plans are being considered."

Thomas sees the casino as a stepping stone toward more conventional  kinds of economic development.   "Gaming comes and goes," he said. "We want to diversify and do other  things -- find other sources of income so that the tribes can have  prosperity long-term. That all takes capital."
One thing the casinos clearly will do is provide a lot of jobs. The  Grand Rondes eventually will employ more than 1,000 workers, mostly in  full-time jobs with a full package of medical, dental and retirement  benefits.

According to information supplied by the different tribes, Oregon  Indian casino jobs will pay an average starting wage of about $415 a  week, or $21,605 a year.  For perspective, a wood products mill just down the road from Spirit  Mountain starts workers at $5.75 an hour, or $230 a week.

So far, however, about three-fourths of the Oregon casino jobs seem to  be going to non-Indians.
Cow Creek Gaming Center, for example, listed only three tribal members  and one other Indian on its 204-person payroll last month.  Those statistics don't sit well with Sue M. Shaffer, the tribe's  71-year-old chairwoman. She says she has a hard time persuading tribal  members to go to work in their own casino. Rubbing her fingers together, she does an impression of members who,  she says, pressure her to pass out dividends from the casino instead of  taking jobs there.  “ `Give me
money,' " Shaffer mimics. " `We don't want to work. We want  to have multigeneration welfare.' "  Shaffer, noting that she worked multiple jobs to put herself through  school some years ago, refuses to even consider giving free checks. Instead, money from the casino is going into tribal land acquisition,  debt retirement and other community purposes.
     - -

The marketing war already has begun.

Frequent television ads compete for attention as the rival casinos and  the Oregon State Lottery woo customers. On Wednesday, the Grand Ronde  gaming hall opened 30 miles west of Salem, raising the stakes and making  it the closest casino to Portland -- only 65 miles.

A composite picture of the typical tribal casino customer is a  55-year-old white woman tossing money into a video slot. To keep customers wagering, enormous air-cleaning systems flush away  the smoke so gamblers can puff without leaving the action. Automatic bank  teller machines are installed on many of the casino floors so gamblers  can tap their plastic if they run short of cash. And, to encourage women  to spend their time gambling instead of standing in line in a restroom,  most of the new casinos provide twice as many women's toilets as men's.

How much the tribes are spending on advertising is unclear. But in  fiscal 1995, the Oregon State Lottery spent $4.4 million on advertising  to convince citizens that gambling is wholesome fun and potentially  profitable.  The ad messages seem to be working. State lottery revenues increased 25 percent, from $535 million to $672  million -- with the lion's share coming from video poker receipts in  places with a "family-oriented atmosphere," according to a senior state  economist, Dave Griffiths.

But William R. Eadington, a University of Nevada professor who keeps a  close watch on the gambling industry, says placing video poker machines  in places that cater to families is dangerous business.  "I would say that video lottery terminals, video poker machines, are  the most addictive form of modern gaming," Eadington said. "Ninety-seven percent of the problem gamblers who are women play video  poker, and only video poker. Which means if you introduce video poker  into a new area, you create a whole new group of gamblers."  MONDAY: What the future might hold as gambling spreads.  Source: 10/22/95, The Oregonian, by James Long and Steve Mayes.

In responding to the Task Force's request, my staff and I reviewed studies and statistics from other jurisdictions, academic writing, newspaper articles, and other periodicals. We also spoke with law enforcement, and state and local officials in Colorado, Michigan, Nevada, California, Mississippi, Missouri, Louisiana, Pennsylvania, Rhode Island, Iowa, South Dakota, Massachusens and Connecticut, as well as with analysts and attorneys from the U.S. Department of Justice and the
National Association of Attorneys General. Finally, in a visit to Atlantic City, we met with law enforcement and regulatory officials in the New Jersey Division of Gaming Enforcement, the Atlantic County prosecutor, Atlantic City police officers, social services officials, and casino security.

In conducting this study, I posed the following questions. Based on the experiences of other states, does crime increase with the introduction of casino gaming? What would the causes be of any increase in crime? Would there be attendant costs and other implications? Finally, how well would Maryland be able to handle any potential effects on criminal activity?

This report addresses these issues and presents the data which is the basis of my own unequivocal conclusion that casinos are a bad idea for Maryland. The experiences of other states paint a grim picture. The details vary, but both the statistics and the experience of responsible officials convey a consistent and oppressive message. A wide range of evidence is set forth in the report, but a few examples are illustrative.

In the last year, crime on the Mississippi Gulf Coast has increased in every category, with murder, rape, robbery and car theft at least doubling. Juvenile violent crime has shot up 65% in the last two years, alcohol-related accidents increased 101% in the first half of 1994, and police describe a staggering increase in fraud and embezzlement.

In the first fifteen years Atlantic City had casinos, violent crime rose by 199%, and larceny skyrocketed 481%. In Black Hawk, Colorado, calls for service went from about 25 a year before gaming, to between 15,000 and 20,000 today. In Deadwood, South Dakota, arrests have increased 262% since the advent of casinos.

In a hearing before Congress on September 29th of this year, a former Chicago mobster revealed how Chicago organized crime "welcomed" the introduction of legalized gaming into Illinois; it "created a brand new market for us." In Biloxi, Mississippi, two former President Casino employees were indicted last year on federal racketeering charges in connection with an organized crime scheme that
allegedly bilked the casino out of more than $500,000. In New Orleans, 13 people pled guilty this year to charges that they used a video poker company to skim profits into the coffers of the Marcello, Genovese, and Gambino mob families of Louisiana and New York.

As these examples and the full report make clear, casino gaming would unquestionably bring more crime to Maryland.

We could, of course, take certain steps to attempt to minimize this disaster. We would certainly try to take a percentage of casino profits and use it for increased law enforcement resources - more police on the streets, more prosecutors, prisons, and courts, strict regulatory mechanisms, extensive background checks of all casino-related industries. But even if we were able to do all that and more, the fact is that crime in this State would still rise. We would still have many, many more victims of crime, and we already have far too many. It is simply a fiction to delude ourselves that it is possible to have casinos without more crime.

As outlined in the report, casinos would bring increases in virtually every area of criminal activity. These increases would be caused in part by the greater volume of people and money flowing through the State. Yet introducing casinos is not, as some proponents maintain, the equivalent of bringing Disney World to Maryland. The surge in crime would be greater than that which would result from a new Disney park because crime increases from casinos are attributable to more than simply heightened tourism. Crime would rise because of the crime-related problems of compulsive gamblers, the constant exposure of casino workers to substance abuse and other social ills, the pervasive availability of alcohol to casino patrons, and the growing problem of teenage gambling addiction.

The effect of casinos on crime is also different because of the interest of organized crime. Known mob figures frequent casinos to gamble and launder money, and organized crime families attempt continually to infiltrate ancillary industries and to capitalize on an increased market for drugs, illegal gambling, and other ills.

These increases in all types of criminal activity would, in turn, impose tremendous costs on Marylanders. There would be the daunting costs of bolstering every segment of our criminal justice system. There would be the incalculable costs to crime victims in losses of economic, health, and emotional well-being, as well as, too often, loss of life. Finally, there would be loss of the perception, and I like to believe still the reality, that Maryland remains a place to live, visit, and raise families
safely.

We do not need to bring this upon ourselves. We already have crime problems in this State that sometimes seem insurmountable, and law enforcement all over the State works every day to try to get them under control. Violent crime and drugs are destroying some of our communities and threatening others. Domestic violence and child abuse are scourges upon women and children. Our criminal justice system is bursting at the seams. A decision to legalize casino gambling would be a deliberate public policy decision that would make this crisis worse. That simply makes no
sense.

Once we let casinos in, there is no going back. If we ever allow ourselves to become dependent on the relatively small percentage of casino profits we would be allotted, we would never be able to give it up. We would be trapped - trapped in a dependency on uncertain revenue in exchange for a precipitous decline in the quality of life for all Marylanders. This is too great a price to pay.

Our problems demand of us that we find solutions. Casinos are not a solution to anything. Instead, they will exacerbate existing problems and create new ones. Casinos create more crime. They create more victims of theft, of domestic violence, of drunken driving. They cause the loss of more teenagers to gambling, drug abuse, and crime.

Whatever dubious financial benefits might flow from casino gaming are outweighed by the tremendous social costs. Casinos would forever damage the quality of Maryland life. I urge the Task Force and the people of this State to resist the temptation of money that would benefit too few at the cost of too many.

In a day and age when a paramount concern of our citizens is crime, it is nothing short of incredible to think that our State would seriously consider opening its arms to an industry that would only increase this terrible problem.

And that is the nub of it: a vote for casino gaming in Maryland is a vote for more crime in Maryland. I vote nay, and I urge you to do the same.  J. JOSEPH CURRAN, JR. , Attorney General of Maryland, October 16, 1995.  Source:  10/16/95 Cecil County Magazine, by J. Joseph Curran, Jr.