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Gaming bill debated, delayed

Colorado’s community colleges could hit an annual jackpot of up to $29 million if – and this could be a big if – House Bill 12-1280 passes. And up to another $43 million could be generated for college scholarships.

The bill had its first airing Wednesday in the House Agriculture, Livestock and Natural Resources Committee, a 90-minute session that featured the interesting and complex alliances battling over the bill. But after testimony ended, chair Rep. Jerry Sonnenberg, R-Sterling, said, “I’m pulling this off the table. We will stand adjourned.” (Sonnenberg had hinted earlier that he’d do that.)

The other Wednesday news of note was the Senate Education Committee’s 7-0 vote to pass Senate Bill 12-121, which would make some key changes in charter school law (see below).

Gambling bill revives an old feud

While the potential revenue that could be generated by HB 12-1280 has drawn attention from the higher education community, the fight over the bill has virtually nothing to do with education. It’s continuation of a years-long feud between two segments of the gambling industry – horse racing interests and mountain-town casinos.

The bill would allow establishment of three locations in the state where gamblers could play “video lottery terminals.” (Whether those machines are the same as slot machines is a key difference in the debate.) The bill would place one gambling hall east of the Continental Divide, one on the Western Slope and one in Pueblo.

While the bill doesn’t specify locations, it’s expected one would be at the Arapahoe Park racetrack (operated by Mile High Racing and Entertainment), one at the State Fair grounds in Pueblo and one in the Grand Junction area. The bill would require operators of the gambling halls also hold pari-mutuel licenses – i.e., racetrack licenses. Each gambling hall could have up to 2,500 machines. (There are 14,500 slot machines in Black Hawk, Central City and Cripple Creek, and the largest casino in the state has just under 1,500 slots.)

Assuming the three gambling halls would open Jan. 1, 2013, the legislative staff’s fiscal analysis estimates gross revenues of $120 million in the second half of 2012-13, rising to $239 million in 2013-14. Operators would keep 70 percent of the take, so revenue to the state would be $35.9 million in 2012-13 and $71.9 million the following year. Community colleges would receive 84 percent of the new revenue up to a combined total of $29 million from this source and from revenue the colleges already receive from mountain casino revenues. The $29 million cap would be adjusted upward annually based on inflation.

The Building Excellent Schools Today construction program would get 16 percent of proceeds up to a combined total of $5.5 million from the gambling halls and money that BEST currently receives from the Colorado Lottery.

The remaining revenue would flow to a new Colorado College Scholarship Fund, which would be controlled by the legislature. (The state currently provides about $100 million a year in need-based scholarships and work-study stipends.)

Whether community colleges and students will ever see that money depends on the strength of the opposing lobbying forces and how lawmakers weigh the demands of a bewildering variety of interest groups.

The horse racing industry, in the doldrums for years, wants video gaming to draw customers back to racetracks in Arapahoe County and Pueblo. Their allies include the Colorado Community College System, some local chamber of commerce types and farmers and ranchers who do business with the racing industry.

(Community colleges were allied with the other side of the gambling industry in 2008, when they backed Amendment 50. That expanded casino hours and games, with a cut of new revenue going to the colleges. But that revenue stream has proved drier than expected, yielding only about $6 million a year for community colleges.)

Lance Bolton, president of Pikes Peak Community College, testified in favor of the bill Wednesday on behalf of the community college system.

Casinos in the three mountain towns, whose revenues have been weakened by the recession and the state smoking ban, are fearful that thousands of slot machine-like devices in Arapahoe County and Pueblo would kill the casino business in Black Hawk, Central City and Cripple Creek. They’re backed by History Colorado, which depends on a reliable flow of casino revenues to fund its programs and pay off its new museum building, and Arapahoe County officials, who testified they don’t want the law enforcement and other hassles associated with a big gambling hall. The Colorado Municipal League also opposes the bill.The bill would require local approval of gambling halls and would give local governments $5 million a year in “video lottery impact fees.”

Larry Hill, CEO of Triple Crown Casinos in Cripple Creek, said. “Cripple Creek is done” if HB 12-1280 passes. “It will ruin, decimate our business.”

Mile High Racing has multiple lobbyists working to pass the bill, while Isle of Capri Casinos and other mountain-town casinos have their own squads of paid representatives.

Amid the competition of business interests is an interesting constitutional argument – are VLTs slot machines? Proponents of the bill argue that VLTs are essentially akin to the lottery ticket machines in your neighborhood convenience store, and the bill proposes the VLTs be regulated by the Colorado Lottery Commission.

But proponents say VLTs are just slots – “Video lottery terminals are indeed slot machines,” Hill said. That’s important because slots are regulated by the Colorado Limited Gaming Control Commission, and are limited by the constitution to casinos in the three mountain towns.

The hearing brought out some other interesting figures.

Mark Grueskin, best known in education circles as a lawyer for the Colorado Education Association, appeared on behalf of the Colorado Gaming Association, which represents the mountain casinos.

Another well-known liberal figure, former supreme court Justice Jean Dubofsky, appeared on behalf of Mile High Racing and Entertainment, saying, “I believe very firmly that” HB 12-1280 is constitutional.

Various versions of the VLT bill has been attempted in recent sessions, but none have passed.

More information:

Charter bill moves ahead

The Senate Education Committee Wednesday voted 7-0 to send an amended version of Senate Bill 12-121. The measure has multiple elements. It would change the matching funds requirements for charter schools that apply for Building Excellent Schools Today grants, create a new loan program that charters could use for BEST matches, clarify state law on the ability of charters to apply for outside grants without approval of their authorizing districts and make changes in the law governing the state Charter School Institute.

Committee members didn’t have any problems with the bill, particularly after sponsor Sen. Keith King, R-Colorado Springs, offered a number of amendments.

But some members were nervous about the bill’s broad title – “Concerning Charter Schools” – and expressed fears that could lead to unwanted amendments once the bill gets to the Republican-controlled House.

King said that House prime sponsor Rep. Tom Massey, R-Poncha Springs, wouldn’t mess with the bill, and that if mischief is done in the House, the Senate members can take care of things in conference committee.

“Let’s kill the bill in the end” if we have to, he said.

Delayed or dead

The House Education Committee Wednesday was supposed to hear House Bill 12-1155, which proposed significant changes in how college remediation courses are offered and in how the state subsidizes resident student tuition through College Opportunity Fund stipends. Massey took it off the table at the start of the meeting, saying cryptically that he’s “working with the community colleges to strike some compromise.”

The House State Affairs Committee killed House Bill 12-1227, which proposed to create new career and technical education programs for people who need job retraining in the state’s community colleges. The bill was less about education than it was about politics. It was part of the House Democrats’ election-year package of jobs bills so therefore wasn’t very attractive to the committee’s GOP majority.

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