Okay. Dixon Not for This Bill. [But, What About Others?]

Posted on February 19, 2010. Filed under: 2010 Articles, Uncategorized |

Riley and Dixon Comment on Opposition to “Sweet Home Alabama” Casino Bill

2/19/2010 – MONTGOMERY – Governor Bob Riley and State Senator Larry Dixon today released statements reiterating their strong opposition to the proposed legislation that would legalize casino gambling in Alabama.
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has the casinos in his district and
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Posted on February 17, 2010. Filed under: Uncategorized |

Gambling Push Gets Major Election Setback

1st candidate to advocate vote on gambling fails to get 40% of vote

Many candidates have been told in recent weeks that taking a, “I’m personally opposed to gambling but let the people vote to allow it,” was a winning campaign position. Polls have been floated to candidates to assure them that this is now the winning position, and opposition to gambling is no longer important in a time of budget crunch.

Many observers thought that Democrat Ricky Whaley would be the first to ride this approach to victory tonight in the special election in Calhoun County, but he failed to get even 40% of the vote, losing to gambling opponent K.L. Brown tonight by a 3,422 votes (55.6 percent) to 2,070 votes (38.5 percent) margin with a few votes for an independent.

Whaley seemed to have many advantages in the race.  He was running for a seat that had been held by Democrats, and enjoyed a huge network due to years of being an ag teacher, and a seemingly endless supply of money from the Alabama Education Association. In addition, TV news viewers have been saturated with commercials attacking Governor Riley for opposing gambling and echoing Whaley’s position to “let the people vote” on gambling.
Whaley took the position that he was personally opposed to gambling, but that the people should be allowed to vote, while Republican K.L. Brown took the position that he opposed gambling.

Why Whaley’s pro-gambling ‘let the people vote’ position failed so badly

While the “let the people vote” always sounds like a winner, Alabama voters are very sophisticated. Many are aware that the side that writes the legislation allowing a vote also decides what the wording will be on the ballot. It would be possible to win an election by wording a question in a very slanted way that would focus on taxing gambling to make it appear to many anti-gambling voters that a YES vote to allow gambling would actually be an anti-gambling vote.  With gamblers having already spent 10s of millions of dollars to build casinos, they know they would be able to overwhelm TV viewers with millions more on commercials to drown out gambling opponents attempt to tell voters how much new gambling would result.

Clearly voters in HD40 didn’t take the bait, resoundingly choosing to elect a candidate who simply voted for what he believed in – that gambling would do great damage to Alabama and should be stopped.

In fact, the Alabama Policy Institute estimated that legalizing casinos in Alabama would create an additional 15,606 pathological gamblers, with more than 3,000 of them committing crimes that would land them in prison after doing great harm to law-abiding citizens.  In fact, the overall cost to the private and public sector was estimated to be $204 million, more than the tax revenue that would be created by the casinos. (see http://www.alabamapolicy.org/pdf/casinos_new.pdf)

While candidates all over the state are being given polling data purportedly showing that passing legislation to allow a public vote to allow casinos is now popular, the first real ballot box test of this appeal points to a still strong opposition to gambling among Alabama voters and a seat switching from Democrat to Republican when the two candidates disagreed on the issue should give pause to anyone considering a pro-gambling vote or position.

Certainly this was not the only issue in the race.  While Whaley had a huge money advantage, the fact that the Republican Party has raised $4 million for legislative races and put together a game plan does allow them to at least offset some of AEAs advantage (AEA spent $8 million in 2006).  However, the lopsidedness of tonight’s loss should at least give pause to other candidates who were planning to follow his roadmap.

For the record the Alabama Farmers Federation did not endorse either candidate in this race, but does oppose all legalized gambling.

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Documents Highlight Financial Details of Country Crossing

Posted on February 8, 2010. Filed under: Uncategorized |

Documents highlight financial details of Country Crossing

Published: February 3, 2010

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nowBuzz up!

The developer of Country Crossing will receive between 55 and 65 percent of the daily net bingo revenue from the project, according to documents filed in relation to the validation of bonds for the project’s infrastructure.

According to the limited offering memorandum filed in association with the multi-million dollar bond issue validated last year in Houston County Circuit Court, Resorts Development Group, as developer of the project, will receive the amount “for its services and economic risk in the project.”

Resorts Development Group is one of several limited liability companies affiliated with Country Crossing developer Ronnie Gilley.

Gilley said all of the revenue goes toward expenses associated with the project in compliance with the local bingo rules and regulation.

The process
According to the memorandum (which is made available to all potential bond-buyers), this is how the developer’s compensation was determined:

“The Developer, through a wholly-owned special purpose entity, will construct the gaming facility for the nonprofit (Houston Economic Development Association) and will require the nonprofit to pay the standard market rates that are not tied to the nonprofit’s revenues or profits.

“In addition to building the gaming facilities for the nonprofit in accordance with the development agreements with the nonprofit and the Houston County Commission, the Developer will also enter into a Development and Development Licensing Agreement to supply the nonprofit with electronic bingo gaming equipment and related software as well as meet certain development obligations. In particular, the Developer will contract for the requisite equipment and software from an original manufacturer and then sublease and sublicense it to the nonprofit.

“In return, the Developer will be entitled to consideration to compensate it for its services and economic risk in an amount between 55 and 65 percent of the “hold” or “net daily win” (i.e., amounts wagered less amounts paid out in winnings) from nonprofit bingo operations.

Gilley said Wednesday the average hold during the month of December was around $55 per machine. Based on that number and the 1,703 machines at Country Crossing, 60 percent of the net daily win would equal around $20,500,000 annually.

It is expected that number would be less in Country Crossing’s first year because the bingo pavilion has been closed several days and traffic could have been damaged due to the potential for raids. Also, the bingo pavilion is closed on Sunday mornings.

The memorandum further states financial agreements regarding the developer.

“The Developer will contract with a management company to oversee and manage all of the services to be provided in connection with the Developer’s development and licensing operations for a fee equal to 10 percent of all the development’s earnings before interest, depreciation, taxes and amortization from such development and licensing operations. It is possible that any of these development and licensing services to be subcontracted out by the Developer may be provided by the Developer, an affiliate of the Developer, a consultant hired by the Developer or an affiliate of the Developer, or a joint venture entered into by the Developer or an affiliate of the Developer with one or more third parties.”

In addition, the memorandum states that Gilley stands to receive revenue from licensing of the Country Crossing brand.

“The Country Crossing brand will be licensed for use in the naming of the nonprofit’s bingo operations. The license fee will be equal to .7 percent of gross revenues from the nonprofit’s bingo operations.”

The rationale
The agreements rely on a 2008 Attorney General’s opinion that states a private club’s bona fide employees may operate a bingo entertainment center under Amendment 569, the amendment that authorized bingo in Houston County. The opinion also states the club may compensate the developer or its affiliates under a Development and License Agreement or Trademark License Agreement in the form of a percentage of bingo revenue.

Section 1(a)(4) of Amendment 569 appears to bar the compensation of employees for the operation of bingo.
“(4) No nonprofit organization or club shall enter into any contract with any individual, firm, association, or corporation to have the individual or entity operate bingo games or concessions on behalf of the nonprofit organization of club. No nonprofit organization or club may pay consulting fees, any compensation or salary to any individual or entity for any services performed relating to operating or conducting any bingo game,” the amendment states.

However, the Attorney General opinion states that a literal interpretation of the individual section would defeat the purpose of the entire amendment.

“The purpose of Amendment 569 is generally to allow bingo in Houston County. If a nonprofit organization or private club was not able to pay its own employees, the purpose of Amendment 569 would be defeated. A logical interpretation of section 1(a)(4) of Amendment 569, in the context of the entire statutory scheme, is that it prohibits the payment of compensation to or the salary of any individual who is not a bona fide employee of the nonprofit organization or private club. In other words, under this provision a nonprofit organization or private club operating a bingo game could not pay the salary of, or any compensation to, an employee of a separate entity to operate the bingo games.”

Section 1(a)(3) of Amendment 569 states that bingo can only be played on the premises that are owned or leased by the nonprofit organization or club operating the bingo game. If the premises are leased, then the rate or rental can’t be based on a percentage of bingo revenue.

The Attorney General opinion states that other forms of compensation are legal because they are not specifically banned in the amendment itself.

“There is no corresponding provision in Amendment 569 that restricts any other payments from the club from being based upon a percentage of receipts or profits. As long as the club is not paying any consulting fees, compensation, or salary of any individual for the operation of the bingo games, the percentage payment of revenue under the Development and License Agreement and the Trademark License Agreement, to the developer would be permissible.”

Other compensation
According to the memorandum, the former landowner where Country Crossing is now located executed the land deal with a seller-financed transaction.

Landowner Keith Givens received a promissory note for $19.4 million plus a five percent equity interest in the development. The details of the agreement require the promissory note to be repaid within five years.

Some country music artists also have financial stakes in the development.

“It is anticipated that venue-specific endorsers will receive a royalty from the operations of that specific venue while those celebrities and/or artists selected to endorse the entire development may receive an equity interest in the development, which … would only dilute the Developer’s interest in the development.”

The memorandum also states Gilley plans to use his record label, Ronnie Gilley Entertainment, to enter into record deals with current and rising country stars.

Part of the record deal would require concerts and/or appearances at Country Crossing as well as endorsements of the development. As such, Country Crossing would in turn pay Ronnie Gilley Entertainment an unspecified cooperative marketing fee.

“Through this arrangement the development will secure multiple artists to make appearances in some fashion at the development,” the memorandum states.

The developer
Gilley said the agreements provide a greater benefit than communities receive at other bingo establishments in the state because of the overall scope of the development.

“What we have is a developmental licensing agreement for all the circuitry of entertainment that comes through here on a regular basis and will come through here,” Gilley said. “We also have encompassed the leasing agreement for the machines themselves. Instead of the charity purchasing a $15,000 or $25,000 machine, it is encompassed in our leasing agreement, so more money stays here.”

Gilley said the revenue is used to maintain the current development and fund future development of the project, which he said could employ as many as 6,000 in just a few years.

“This is all based on a synergized cost structure,” Gilley said. “It is an accumulation of a multitude of things that serves a greater good than just one thing. This is why this is about more than bingo. The synergized cost structure is we create jobs, we create tax revenue, we create an expansion of trade and commerce.

“I could have accepted an invitation from some of these counties that authorize bingo, thrown up a bingo barn, put 500 or 600 machines in there and put 30 people to work. But here, we have a mechanism in place that is for the greater good.”

Gilley said the development turns out to be a “win-win-win” for the county, the workers and the charities.

“Let’s dispel any innuendo and propaganda that we are exploiting the charitable organization. Our thought process is that this charitable organization will have the greatest impact of any in the state.

“We are taking 100 percent of the risk. The charity takes no risk. They get 100 percent of the net revenue and we are taking ours to allocate it and expand development. Hopefully, if it turns out like I hope it will, we will make a nice profit down the road. We feel like in 3-7 years, our entertainment revenue will far exceed our bingo revenue. But we have to get there first,” Gilley said.

Gilley said the recent Supreme Court decision that defined bingo put Country Crossing’s machines at a competitive disadvantage to the machines currently
used at Indian gaming facilities in Atmore and Wetumpka. He said since bingo sites at Country Crossing, VictoryLand and White Hall have shut down recently, Indian gaming sites were adding makeshift pavilions to accommodate more machines due to increased traffic.

“This task force will not eliminate bingo in Alabama. It will eliminate competition for the Indians. It will not eliminate one single machine. Those machines will be absorbed by the Indian facilities.”

The reaction
Houston County Commission Chairman Mark Culver said he was not aware of the percentage of bingo revenue the developer is set to receive. He said the county was not a party to the agreement that arrived at the developer’s compensation, and added the county’s bingo rules and regulations call for all net revenue to go to charity after expenses.

Rev. Tom Anderson, spokesperson for Concerned Wiregrass Citizens, who oppose electronic bingo in Houston County, said the agreement appears to violate the specifications of Amendment 569.

“As I look at this, my first question to my county commissioners, Ronnie Gilley, and the operators of Country Crossing is, ‘Is this not a great conflict of interest that our elected officials are entering into?’  This does not appear to meet the specifications for charitable bingo as clearly defined in Amendment 569.

“When the Alabama Attorney General came with a new opinion, that changed the whole landscape of charitable bingo into gambling with paid workers and a complete corporation,” Anderson said.

Huntsville attorney Julian Butler, who successfully defended a case brought against Madison County Sheriff Blake Dorning after he shut down a bingo hall in Triana, said provisions in Madison County’s bingo amendment and Houston County’s bingo amendment are similar.

“In Madison County, subcontractor created several LLCs (limited liability companies) that were guaranteed a percentage of the take. When you added all of it up, 90 percent went to the developer. A federal judge directly wrote to that and held that you just can’t do that,” Butler said.

The federal court decision did not, however, render a decision on the legality of the machines themselves. The court did, however, side with the sheriff because the operation of the facility was not done in compliance with the provisions of the Madison County amendment that authorized bingo.

“The Madison County amendment was a 1980 amendment,”  Butler said. “What was intended at that time was to legalize the kind of bingo games you and I had traditionally been familiar with; the fall carnival, the churches on Wednesday night, the Elks clubs and other fraternal organizations, where the members of the organization ran the bingo game for part of one night and the prize was probably a ham, cake or maybe even $100. The idea you would have a casino today with a staff of 400, I do not think was in the contemplation of the Legislature or of the voters when they approved the amendment.”

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Posted on February 7, 2010. Filed under: Uncategorized |

Check Out “The Truth About Troy”

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Posted on February 4, 2010. Filed under: Uncategorized |



The Gambling Minute

…as heard on the nearly 200 radio stations of the American Family Network (www.afr.net). Free downloadable 60-second PSA’s for radio that expose the dark side of gambling.

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Posted on February 4, 2010. Filed under: Uncategorized |


House of Cards

Gambling is anything but an innocent pastime. Find out how to break free—and how to deal with someone caught in this addiction.More >>

Victims of Gambling

It seemed like harmless fun — a lottery ticket, the slot machine, online poker. But this broadcast’s guests attest, what starts small can quickly spiral out of control. More >>

Talking Points and Basic Information

Lotteries: An Overview of the Problem

By Chad Hills, Focus on the Family

There are a number of legitimate questions you need to ask before you buy another lottery ticket or vote to allow lottery legalization and/or expansion in your community. >>Full Story

Childhood and Adolescent Gambling

By Chad Hills, Focus on the Family

Adolescents are the largest and most vulnerable population addicted to gambling.  >>Full Story

Indian Gambling Fact Sheet

By Focus on the Family Action

In depth statistics regarding Indian gambling. >>Full Story

FAQ: Gambling in the U.S.

April 30, 2008

By Chad Hills, Focus on the Family

Basic questions and answers regarding gambling in the U.S. >>Full Story

Gambling: A Summary Outline

October 4, 2009

Short and concise biblical references concerning the issue of gambling in regard to society and the individual. >>Full Story

Gambling Availability and Addiction

By Chad Hills, Focus on the Family

Gambling promoters frequently maintain that there is little, if any, relationship between the availability of gambling and gambling addiction. However, testimony from experts and data from gambling communities indicate otherwise. >>Full Story

Gambling`s Impact on Families

By Chad Hills, Focus on the Family

The tragedy of gambling addiction reaches far beyond the more than 15 million Americans who are problem or pathological gamblers. Employers, work associates, friends, and taxpayers often pay a steep price as well. >>Full Story

In depth Research and Articles

Gambling and Suicide

By Chad Hills

Gambling-related suicides are an increasingly common phenomena as legalized gambling continues to spread throughout America. >>Full Story

Casinos and Crime

By Ed Vitagliano

Data from gambling communities across the country indicates that gambling does indeed foster a significant increase in crime. >>Full Story

Video Lottery Terminals (VLTs) and Electronic Gaming Devices

By Chad Hills

Experts on gambling addiction say that video terminals are especially dangerous because they offer gamblers a very fast, highly stimulating, rate of play. Faster play also means that bettors lose more money, because each bet a gambler makes is, on average, a loser, so more bets translate into larger losses. >>Full Story

Research, Testimonies and Articles From Gambling Experts

August 22, 2007

By Chad Hills

A clearinghouse of information and research on the effect of gambling upon society. >>Full Story
Websites, Books and Additional Resources

National Council on Problem Gambling www.ncpgambling.org

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