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 Supporters,
Granholm Square Off Over Proposal 1
Gongwer News Service, October 18, 2004
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Governor
Jennifer Granholm accepted a check Monday from Lottery
Commissioner Gary Peters representing a record contribution to
the School Aid Fund. She said such a check would not be possible
in the future if voters approve Proposal 04-1.
Proponents of the constitutional amendment to require statewide
and local voter approval of any expansion of gaming in the state
shot back that what would not be possible under their proposal
would be the agreement they say Ms. Granholm and horse racing
interests have reached to put slot machines at the state's horse
tracks.
The Lottery officially provided $644.5 million for schools for
the coming fiscal year, its first increase since a revenue peak
in 1999. Mr. Peters said the increase was entirely due to Club
Keno, which brought in $204 million.
"It was the most successful new game and the most successful
Keno game launch ever," Mr. Peters said, comparing the new game
offered in bars and restaurants to similar games offered
recently in other states.
Gross revenues for the Lottery in fiscal year 2003-04 were $1.97
billion, so 33 percent of revenue went to school funding.
Another 55 percent, about $1.1 billion, covered prize payouts,
with the remainder covering retail commissions and other
operating costs.
"This is exactly why it is so important that we should support
every dollar that should go to public education," Ms. Granholm
said. "If Gary Peters and the Lottery commission were unable to
update the Lottery then revenue would decline."
And Ms. Granholm and Mr. Peters said provisions of Proposal 1
would inhibit the lottery's ability to change current games and
to add new games because many of the new games depend on Lottery
terminals. Mr. Peters said analyses of the proposal indicated
those terminals are considered player operated electronic
devices under the proposal.
"I'm upset that the tribal casinos and the Detroit casinos
overreached in the proposal in affecting the Lottery," Ms.
Granholm said.
But proponents said the only Lottery games that would be
affected would be proposed slot machines or video Lottery games
that have been proposed for horse tracks and bars.
"This is nothing but an attempt by the state to protect their
foray into slot machines," said Roger Martin with Let Voters
Decide, the ballot committee supporting the proposal.
And Mr. Martin said imminent approval of so-called racinos would
be the only reason the horse racing interests would put as much
money behind opposition to Proposal 1 as they have. In addition
to being the primary bankrolls for No Casino Monopolies, the
primary ballot committee opposing the proposal, horse racing
groups are also supporting the Committee to Protect Our Schools,
which is running the ads featuring Ms. Granholm and Mr. Johnson.
Let Voters Decide in fact launched ads Monday pointing out that
Joseph Garcia, treasurer of the Committee to Protect Our
Schools, is also the lobbyist for the Michigan Racing
Association.
Mr. Granholm said her ads with House Speaker Rick Johnson (R-LeRoy)
have to do only with the Lottery and its ability to implement
new games. She said she does not support the current version of
racino legislation, though she admitted she was not completely
familiar with the terms of the current version of the package (HB
4609, HB 4610, HB 4611, HB 4612).
"It seemed to me to go too far, too many machines," Ms. Granholm
said.
Ms. Granholm said it was her job to carry the message that any
effects on the Lottery could mean cuts in school funding. "I
think it is a realistic expectation that people don't want to
see cuts to public education," she said. "If you removing
funding from the School Aid Fund, you need to look at budget
cuts or revenue increases."
Proponents said there would not be the press to have Ms.
Granholm and Mr. Peters involved unless there was a deal on
racinos. He speculated the proposal was needed to boost revenue
in the fiscal year before Ms. Granholm seeks re-election.
"We're running against the state," said Tom Shields, also a
spokesperson for Let Voters Decide. In addition to the ads
featuring Ms. Granholm and Mr. Johnson, which are paid with
ballot committee funds, Mr. Shields said Lottery advertising
funds have been used to indirectly oppose the proposal with ads
touting the contribution Lottery makes to school funding.
Mr. Peters said the Lottery regularly runs those ads in the
spring and the fall. Fewer of the so-called beneficiary ads ran
last fall because all of the ad money was tied up in launching
Club Keno, he said. "Regardless of what's happening with the
campaign we have to advertise our product," he said.
Lottery spokesperson Andrea Brancato said the bureau ran
beneficiary ads in February, May, September and November of 2003
and February, May and September of 2002.
The ads about which Mr. Shields complained, which ended their
run Monday, noted that Lottery revenues paid for about 11,000
teachers in the state. In October 2002, the Lottery ran ads
proclaiming it generated $1.5 million a day for schools and in
January 2002 it ran ads noting that local businesses receive
some of the money spent on lottery tickets as well as much of
the winnings.
Mr. Peters said if the proposal is only intended to affect slots
and table games, the authors would not have intentionally made
the effective date January 1, 2004, to avoid affecting Club
Keno. "If Keno's going to be affected, then its going to affect
all those games," he said of the games that require players to
enter numbers into lottery terminals through play slips.
All of the games with player selected numbers use essentially
the same computer system, he said.
Mr. Shields said Mega Millions, Keno and other games run through
the Lottery terminals are existing games that would not be
affected by the proposal, even if courts did rule that the
terminals constituted player operated electronic devices. He
said the effective date was put in to erase the possibility of
arguments that the proposal would affect Club Keno, not out of
fear that the game would be eliminated.
"That's what we're aiming at is where they're going, not where
they're at," he said of the various proposals for electronic
Lottery games at racetracks and bars.
Ms. Granholm also took issue with recent ads from proponents
arguing politicians were supporting Internet gaming, a plan the
proposal, they said, would put to the voters for approval.
"Internet gaming is a federal crime," Ms. Granholm said. "We
have no intention or desire to have Internet gaming or children
gambling."
Mr. Martin said Mr. Peters had proposed Internet gaming in a
memo describing the effects of the proposal. The memo said, "The
Lottery will not be able to introduce new 'on-line' games to
replace mature games." The types of 'on-line' games the memo
discusses are the Daily 3, Daily 4 and Mega Millions, all of
which require a lottery terminal connected to a central server
to operate, though not necessarily using the Internet.
And he said the Legislature has already approved Internet
gaming. HB 4609, part of a package that would create the racinos,
includes provisions for account wagering that would allow bets
placed over the Internet.
But the allegation of politicians wanting to support online
gaming available to children is noticeably missing from the list
of gaming expansions the proposal would put to the voters in the
latest ad the group launched.
DETROIT: Whatever the outcome of the campaign, it could further
the rift between Ms. Granholm and Detroit Mayor Kwame
Kilpatrick. Mr. Kilpatrick is supporting Proposal 1.
Ms. Granholm said she had not discussed the proposal with Mr.
Kilpatrick. But she said, "I'm disappointed with anybody who's
in favor of Proposal 1."
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