LAS VEGAS (By Roland Jones, MSNBC) May 14, 2005 - With its famous strip of outsized mega-resorts and over 37 million visitors a year, Las Vegas is still the undisputed kingpin of the U.S. commercial casino market. But gaming venues from Michigan to Mississippi are giving Sin City a run for its money.

The State of Nevada passed gaming legislation in 1931, giving Las Vegas a considerable head start in the gaming business, and it has been honing its expertise as a gambling town ever since.

New Jersey introduced legislation to introduce casinos in Atlantic City in 1976, and a number of U.S. states have followed suit over the last decade or so, spawning commercial casino operations in 11 U.S. states — and many of them are showing significant revenue growth.

A case in point is Mississippi’s Tunica County, located on the northwestern edge of the Mississippi River Delta.

Ten years ago, few had heard of this poor agricultural region some 40 miles south of Memphis, Tenn., once famously called “America’s Ethiopia” by civil-rights activist Jesse Jackson. Today, Tunica is America’s third-largest gaming resort destination after Las Vegas and Atlantic City, pulling in more than 12 million visitors a year into its nine casino resorts notes Webster Franklin, president and CEO of the Tunica Convention and Visitors Bureau.

“In 1990, when we passed the Gaming Control Act, if you had said gambling in Tunica would become a $1.2 billion industry, you’d have been laughed out of town; we had one stop light and unemployment in the upper teens,” Franklin said. “Since then, we’ve seen over $3 billion worth of investment and we have nine casinos and plenty of new roads with stop lights.”

Franklin attributes Tunica’s “Mississippi Miracle” to its ability to grow unimpeded by legislation. Unlike other states that have recently passed gaming laws, Mississippi’s gaming legislation does not specifically restrict the number of casinos that may be built in the state, Franklin notes, and so competition between Tunica’s nine casino resorts has pumped billions of dollars into the local economy, generating thousands of jobs and pouring millions into state coffers.

Franklin notes that, like Las Vegas, Tunica is building golf courses, a museum, restaurants and shopping malls. “We are unique here having this cluster of casinos in the middle of America,” he said. “Our plan is to persuade people not to travel half way across the country to visit Las Vegas or Atlantic City, and once we get them to come here we want to encourage them to stay longer.”

States, Internet gain

It’s not just Mississippi that’s benefiting from casino revenue.

In Illinois, new gaming legislation in 1990 has led to handful of casinos in the Chicago region, and similar laws in states like Louisiana and Iowa have produced a flotilla of riverboat casinos. Most of the gaming centers came into being in the 1990s in response to states’ need for more revenue said Frank J. Fahrenkopf, Jr., president and CEO of the American Gaming Association (AGA), an industry trade group.

“Casino gaming brings tremendous capital growth and it produces economic development, jobs and it’s environmentally clean,” said Fahrenkopf. “And most importantly you can tax gaming at higher rate, so the states that have adopted gaming laws have found it to be remarkably beneficial.”

Indian casinos, operated by native-American tribes in 28 U.S. states, are seeing massive growth, and Internet-based gambling is big business. Christiansen Capital Advisors, a New York firm specializing in analysis of the professional gambling industry, estimates online wagering has grown from $1 billion in 1999 to about $11 billion in 2005.

These gaming venues are in the sweet spot. The U.S. gambling market continues to demonstrate healthy growth, rebounds from the economic hardships of the early part of the decade. Recent data from the AGA show the number of Americans visiting casinos increasing in 2004 and gross gaming revenues rising in every state.

The data also suggest the balance of power is tilting away from Las Vegas.

While the West Coast of the United States — and Las Vegas in particular — still accounts for more casino visits than any other region, the data show its share of casino visitors fell for the first time in three years in 2004, declining from 38 percent in 2003 to 35 percent. Visitors to gaming regions in the Northeast, north central and southern parts of the nation saw a slight increase in their share of casino visits during the same period.

Similarly, although Nevada’s gross gaming revenue continues to grow, with the state’s takings topping $10 billion for the first time in 2004, states like Missouri and South Dakota also showed revenue increases, rising 10.8 percent and 10.9 percent respectively from 2003 levels. Year-over-year, revenue growth in Nevada was 9.7 percent.

Also making significant gains are Indian casinos, notes Whittier Law School Prof. I. Nelson Rose, a gaming law expert. These tribally-operated casinos were formed after a 1987 U.S. Supreme Court decision to allow federally-recognized Native American tribal entities to operate gaming facilities free of state regulation.

“The third-biggest market for gaming after Las Vegas and Atlantic City could actually be Connecticut — that’s where the Mohegan Sun and Foxwoods casinos are,” Rose said. “These casinos are probably the largest in the world, but we don’t have good numbers for them.”

The Racino boom

Another fast-growing segment of the gaming business is the “Racino,” a combination horseracing facility and casino.

Racinos are growing rapidly because companies do not have to seek out new gambling permits for them — as racetracks they are already licensed betting establishments, notes the AGA’s Fahrenkopf. And Racinos are lucrative for local governments. In Delaware, for example, the taxes paid by the state’s three Racinos amounts to just under 10 percent of the state’s budget. Similarly, taxes paid by four Racinos in West Virginia make up 12 percent of that state’s budget, he said.

“This is the route states have taken over the last few yeas to help deal with their budget problems,” said Fahrenkopf.

But although gaming in locations outside Las Vegas are growing, the capability of the city’s gaming industry to reinvent itself in the face of increased competition should not be underestimated notes Fahrenkopf.

Ten years ago, a Vegas casino like MGM Mirage would have derived about 65 percent of its bottom line from gaming, and the rest from food and lodging Fahrenkopf said. Today, only about 45 percent of the revenue comes from gaming; the rest comes from restaurants, lodging and entertainment, he added.

“People are going to Vegas not just to gamble, but to shop in the stores you’d find on Fifth Avenue or Rodeo Drive, and they are eating at gourmet restaurants and playing golf at the best golf courses,” Fahrenkopf said. “So we are seeing a dramatic change in the industry, especially in Nevada, and I think venues like Atlantic City are trying to make that move too.”

Save Arizona

 

The Save Arizona Initiative

This is a work in progress. We have until fall to refine this proposal. It is not perfect right now but it will be. And if you do not support this initiative, think of the alternative: Nothing happens to lessen the high cost of prescription drugs and health care.

January 14, 2003 - Save Arizona will be an initiative to organize Out Of Many One (OMO), an Arizona nonprofit corporation, to manage Arizona's prescription plans, to provide funds for Medicaid coverage and to provide funding for other Arizona programs identified below.

The Save Arizona plan will hold down spending on medicines for millions of Arizonians and Medicaid beneficiaries by using OMO, a non profit corporation designed to be immune to drug makers' promotions of many of their more expensive products.

Arizona State Government is facing a $1.4 billion deficit: $368 million in fiscal 2003 and $1 billion for the fiscal year that begins in July.

Health care spending is a major part of the financial problems Arizona faces, and drugs are the fastest growing component.

Drug benefits for the nation's state employees and Medicaid recipients are currently managed by private companies called pharmacy benefit managers. Under their current contracts, these drug plan managers pocket sizable undisclosed payments, known as rebates, from drug makers in return for promoting certain drugs. They then create lists of drugs, called formularies, for different ailments and often set prices that induce drug plan members to opt for the drugs that have been promoted.

At least three of the largest drug benefit managers, Medco Health Solutions, AdvancePCS, and Express Scripts, have special deals with drug manufacturers that require them to create financial incentives for Medicaid recipients to use certain prescription drugs, many of them quite expensive.

By managing the drug benefit programs in Arizona, OMO will build a program to keep drug company payments and pass on added discounts to prescription drug users in Arizona. OMO, an Arizona non profit corporation, will use medical experts to help determine the most cost effective and appropriate drugs to offer, often supplanting the ones promoted most heavily by drug makers.

OMO will also ask the Attorney General to review the fine print on existing prescription drug contracts to make sure programs for low-income and uninsured residents receive the full benefit of price discounts already negotiated with drug makers.

OMO as the new drug benefit manager will compete with private pharmacy benefit managers, all of them creating lists of drugs at attractive prices. This way, OMO will have a choice of lists of preferred drugs at discounted prices.

The Save Arizona/OMO plan would include coverage for mail-order prescriptions and for importing drugs from Canada, where the government keeps prices low.

OMO will farm out most of the operations, like processing payment claims and selecting networks of pharmacies.

How to Pay For All of This

Gambling for Indian tribes was given approval primarily because they were limited to rural areas; however, within the last few years, casinos have sprouted up within the state's urban areas. They can be found within minutes by driving just down the street.

The casinos operated by Indian Communities pay no federal or state taxes on revenue that comes from Arizona taxpayers. They do pay a single token digit fee to the State as a concession to Arizona. The recently passed initiative has obscure language stating up to 8% will be paid to Arizona. This can be interpreted as 1% and still comply with "up to 8%."

With only Indian tribes operating casinos in Arizona this amounts to a gambling monopoly given to the Indian casinos with only a token fee of income or benefit to Arizona taxpayers.

The Save Arizona Initiative is to add competition to gambling in Arizona by allowing casinos not only on reservations but off reservations as well. 

Then 100% of all revenue generated by off reservation casino operations would be made available for services to all Arizonians. 

The Save Arizona Initiative will legalize gambling in the State of Arizona with all new gambling operations administered and operated by a non profit corporation receiving and disbursing all revenue to entities identified below.

Present gambling operations in the State would be grand-fathered to provide gambling as presently offered without expansion.

All gambling operated by non state entities would pay 25% of revenue annually for renewal of gambling licenses.

After the cost of operating and administering state gambling operations is deducted, all remaining revenue will be distributed as follows:

• 25% goes towards elimination of state income tax for individuals;

• 20% goes to underwriting prescription drugs for all Arizonians; 

• 20% goes to universal health care clinics for all Arizonians;

• 4% goes to housing health care for seniors;

• 3% goes to education k-12 programs; 

• 1% goes to OMO social services for low income persons; 

• .5% goes to Seniors USA; 

• .5% goes to OMO;

• 2% goes to rural housing rehab development and economic development;

• 4% goes to urban housing rehab and economic development; 

• 10% goes to housing services for assistance in providing free down payments and building affordable housing; 

• 10% goes to property taxes for individuals helped with Housing Services and for people 55 and over.

Program Tasks

Establish a program to facilitate a relationship with the U of A Medical School and Pharmacy School for them to work with OMO to provide guidance and expertise in prescription drug services and heath care services.

Establish a non profit corporation to administer and operate gambling services including casinos.

Program Services

OMO Becomes Drug Manufacturer, Wholesaler, Distributor and Provider of  Pharmacy Services Primarily Through the Internet  

For nearly three years from the beginning of Seniors USA, the focus of Seniors USA has been to eliminate drug patents funded by the US Government and make all drug discoveries available to generic drug manufacturers.

 

We were convinced only branded drug manufacturers were guilty of greed in extorting high costs for branded prescription drugs.

 

We were wrong.

 

Now that 20 year branded drugs monopolies are expiring and the use of generics are increasing, we are alarmed at the increasing cost of generic drugs becoming just as expensive as the branded drugs generics are replacing.

 

The only viable alternative is for Out Of Many One to become a non profit generic drug manufacturer but also to become involved in every aspect of the process to provide prescription drugs to all Americans.

With the elimination of drug patents for those drugs funded by the NIH, manufacturing of all drugs discovered by research funded by the US Government will be available to all drug manufacturers. OMO, a non profit corporation, will establish a not for profit manufacturing company to manufacture prescription drugs and then act as wholesaler, distributor and provider of pharmacy services to all Americans purchasing prescription drugs primarily through the Internet.

The OMO role of non profit wholesaler, distributor and provider of pharmacy services would not be limited to drugs manufactured by OMO but would include bulk buying of pharmaceuticals manufactured by other drug companies.

For those who do not have access to the Internet, OMO will establish relationships with banks, libraries, city and state services and agencies to enable anyone access to the Internet to order prescription drugs.

OMO Health Care Reform

More than 40 million Americans, one in seven, have no health insurance; their ranks increasingly include middle-income families that have no employee health benefits. Those that do have insurance are facing sharply rising co-payments for drugs and medical services. Then there are those workers in their 50's or early 60's who would love to retire a bit early — which could add jobs for younger workers — but are trapped because they can't afford, or can't get, health insurance to cover them until they are 65 and eligible for Medicare.

Growing numbers of doctors are refusing to treat Medicare patients because of physician payment rate cuts: 5.4 percent last year and an additional 4.4 percent scheduled to take effect on March 1. As a result, Medicare patients who can't find doctors are flocking to already overextended hospital emergency rooms — an inefficient and expensive way to receive routine medical care.

OMO will expand its programs to include address of these needs and also to form a purchasing cooperative or similar service allowing small businesses to join OMO and receive the benefit of forming a program to help small businesses with the ever increasing cost of medical benefits. This would give small businesses some of the advantages large companies have when insuring workers. 

Seniors USA Proposal to Washington

Seniors USA within the next 60 days will incorporate as a 501 c 4 non profit corporation to lobby for the Save Arizona Initiative and for programs in Washington DC.

 

Presently, nearly 44% of all drug research in the United States is funded by American taxpayers through funding of the National Institutes of Health. President Bush doubled NIH funding providing for a 15% or $3.4 billion increase and a total FY 2002 budget of $23.4 billion.

Seniors USA proposes FY 2004 funding be increased to $50 billion essentially allowing for funding of all pharmaceutical research with the requirement all discoveries by pharmaceutical and institutional grant recipients funded by the NIH stay in the public domain.  With the elimination of drug patents for publicly funded discoveries, all drug discoveries would be available to generic drug manufacturers to enter the competitive prescription drug market place and thereby dramatically reduce the cost of prescription drugs for all Americans.

No longer will pharmaceutical companies be able to support arguments monopolies enabling high prices are required to offset a $500 million research cost per drug to bring its discovery to the prescription drug marketplace.

All discoveries of pharmaceutical drugs approved by the FDA but funded entirely by private funds would honor all intellectual property rights and patents for a period of ten years with no extensions including those requested in the "Orange Book."

Lastly, the role of the FDA in enforcing drug advertising would be expanded and would be given the power to suspend all FDA approvals until such advertising is corrected.

The new approach to decreasing prescription drug prices will sharply reduce not only Medicare costs but will benefit every American requiring medication.

The Save Arizona Initiative

All of the above is now being refined and will be continually refined until petitions are printed now scheduled for late this year. We will circulate petitions to have the Save Arizona Initiative placed on the general election ballot of November 2004. 

Beginning this summer, meetings will be held all over Arizona to begin putting together the Save Arizona organization along with Seniors USA to support passage of the Save Arizona Initiative. Help is required now for planning and refining language for the initiative. 

All Arizonians are invited to provide input into the Save Arizona Initiative process and planning for administration and operation of programs funded from funds made possible from the Save Arizona Initiative. Please send your comments Contact Us

We are also in need of volunteers. If you would like to be part of our Save Arizona Initiative, Contact Us

Our kick off press conference is scheduled at the state capitol on January 14, 2004.

Lastly, the best source of information on the status of all this is to check back regularly with OMO.

As information becomes refined, it will be published in an expanded section within OMO.

Jon Garrido, CEO, OMO and Seniors USA