Gaming united in opposition to lottery; labor backs issue
Ivan Lopez, who works as a casino porter at a Strip resort, was one of a half dozen members of Culinary Workers Local 226 who joined other Nevada union leaders last week in supporting AJR5, which would repeal the state’s 159-year-old constitutional ban on lotteries.
Proponents, including the Nevada AFL-CIO and the Service Employees International Union, said tax revenue from lottery ticket sales should be directed toward youth mental health programs.
In backing the legislation proposed by Assemblyman Cameron “C.H.” Miller (D-North Las Vegas), Lopez told members of the Assembly Committee on Legislative Operations and Elections of his personal struggles with mental health issues growing up.
“Youth mental health is a crisis in Nevada. Something has to change,” Lopez said.
As expected, casino industry leaders banded together in opposition to legalizing a lottery, an effort that has failed in the Legislature more than two dozen times since 1887.
Nevada Resort Association President Virginia Valentine told lawmakers that state lottery revenue does not typically meet its anticipated goals. She also said a lottery would be in direct competition for gaming dollars with the casino industry, the state’s “largest single employer and a largest single source of private investment.”
Gaming industry lobbyist Nick Vassiliadis pointed out another problem with AJR5.
“Nothing in this piece of legislation actually directs any money to mental health,” Vassiliadis told lawmakers, challenging labor union leadership’s testimony. “[It] would be a misrepresentation to say that the industry stands in the way of supporting mental health.”
As with any constitutional amendment originating in the Legislature, AJR5 must pass two successive legislative sessions and then be approved by a simple majority of voters at the next general election before implementation. Miller’s proposal would have to pass the Assembly and Senate this year and in 2025 before voters could weigh in on the ballot question in 2026.
“There are [more than] hundreds of millions of dollars in the state budget right now that you guys could actually utilize to fund mental health today,” Vassiliadis told the committee. “We wouldn't have to wait six years.”
Even if the constitutional amendment were to pass, gaming insiders suggested Nevadans wouldn’t see lottery tickets or scratch-off card sales from a Silver State retailer until 2027 or even 2028, given the amount of time needed to set up and implement rules and regulations on a potential future Nevada lottery.
Several of those questioned, however, thought the resolution will make it through the legislative session this year given the backing of the politically powerful Culinary Union and other labor groups. Still, as of Monday, the measure has yet to be scheduled for a committee vote ahead of Friday’s looming deadline for legislative measures to make it out of committee.
Assembly Speaker Steve Yeager (D-Las Vegas), in what appeared to be an effort to address the mental health funding concerns, asked a Legislative Counsel Bureau (LCB) attorney if “enabling legislation” would allow lawmakers to preemptively set up lottery administration before the proposed measure goes to the ballot.
“As long as it's general legislation that sets standards for a state agency to either operate the lottery, or to contract out the operation of a lottery to other entities, or to authorize the sale of lottery tickets through multistate lotteries,” said LCB general counsel Kevin Powers.
Yeager, at last month’s IndyTalks forum in Reno, seemed to tip his hand in support of the lottery effort, saying the state needs to keep lottery ticket purchases in Nevada, rather than watching residents line up at lottery outlets located just across the state line from Primm and Verdi.
“I think there's a responsible way to do it, and that's why we're starting the process,” Yeager said at the time.
During his presentation, Miller said Nevada is one of just five states without a lottery, noting the gaming industry’s historic opposition to the legalization efforts.
However, in every lottery state (other than Mississippi), casinos were legalized long after lotteries were created. Nevada gaming companies operating in Mississippi didn’t oppose the lottery legalization in 2018.
Taylor sounds off
Miller said he expected gaming industry opposition to AJR5, even though he had “multiple conversations and meetings with a goal of inviting our gaming industry and partners to the table to build something that works for all the parties.”
The Culinary’s lottery support was boosted by UNITE HERE President D. Taylor, head of the union’s parent organization, who was critical of how casino operators spent profits from last year’s record-setting $14.8 billion in statewide gaming revenue.
“Clark County [said it had] 10 straight months of $1 billion [in gaming revenue] and 2023 will be off the charts,” Taylor said in rapid-fire remarks that seemed to hint toward the arguments he will make when he leads the negotiation for new labor agreements between the union and dozens of Strip and downtown resorts covering some 60,000 non-gaming employees. The contracts, negotiated in 2018, expire at the end of May.
Taylor said government data for employment levels in February showed there were 148,400 Nevadans employed in the state's casino hotels, nearly the same total as in January 1994.
“No jobs have exponentially increased [in line] with the profits that they've made,” Taylor said. “I will just ask you to please pass AJR5. It's for our state. It’s for our citizens. It’s for our kids.”
A united front
The lottery was also opposed by business industry representatives, including the Las Vegas Chamber of Commerce.
Las Vegas Latin Chamber of Commerce CEO Peter Guzman cited a University of Maryland study that found lottery ticket sales in most states are disproportionately concentrated in communities with lower levels of education and income and higher poverty rates with larger populations of people of color.
“[We] have serious concerns with the impact of lotteries on our community and encourage this legislation to not move forward,” Guzman said. “In our opinion, this is nothing more than a tax on low-income and poverty-stricken folks.”
In addition to Valentine and Vassiliadis, representatives from Boyd Gaming, Golden Entertainment, South Point Casino and Sahara and Grand Sierra owner, the Meruelo Group, said legalizing a lottery isn’t worth the effort.
Notably absent from the debate were representatives of MGM Resorts International, Caesars Entertainment and Station Casinos’ parent company Red Rock Resorts. All are members of the Resort Association.
“Don’t mistake our absence as a lack of support. We’re firmly behind the Resort Association’s remarks,” Red Rock Senior Vice President Michael Britt told The Nevada Independent.
Boyd Vice President of Government Affairs Erin Midby said Nevada’s revenue from joining a multistate lottery effort, such as Powerball, would not result in a large tax windfall.
“Revenues … are divided among the participating states based on various factors such as ticket sales,” she said. “As a very small state that would be competing with other larger, more populous states like New York, California, and others, Nevada’s share would be very small.”
Meanwhile, South Point attorney Barry Lieberman mentioned a $14 million Megabucks slot machine jackpot hit earlier in the week at Reno’s Atlantis Casino.
"While people may get frustrated that there is no lottery, there are opportunities here for life-changing events within the current system,” he said during the hearing.