Growth A Likely Issue In Jefferson Referendum
With the approval of table games legislation by the West Virginia legislature, Jefferson County residents can get ready for the phone calls—the ones from live and recorded messengers asking them to vote yea or nay on a countywide referendum on table gaming at Charles Town Racing and Slots. The legislation, which was awaiting Gov. Joe Manchin’s signature at press time, requires Charles Town Racing & Slots to get Jefferson County voters’ approval before offering table games. No date has been set for the referendum.
The legislation roused contentious debate in the House and Senate, and it is still unclear how county voters will respond to the prospect of casino-style table games at a vastly expanded venue in Charles Town. For many voters, the issue was settled when they approved slots at the raceway in the 1990s. Table games, according to that sentiment, are merely an extension of the business already operating in Charles Town.
What’s more, the County and municipalities have grown accustomed to the windfall revenue, “addicted” is the word heard at lunch counters and coffee shops.
But voters opposed to public gambling on moral grounds are not likely to be swayed by the “more of the same” argument. As in the previous referendum, the morality of gambling will be an issue. Conventional wisdom describes the negative effects of gambling on people at the lower end of the economic scale and the increased demand on community services.
Often, however, those effects are difficult to quantify. In a study by Roger Dunstan for the California Lottery Commission, the author examined a wide range of related studies in states considering lottery and gaming measures. Dunstan’s study is now ten years old, but still sets the standard. His survey found no conclusive evidence that gaming was the cause of social problems; more often, it was merely an outlet for people already prone to abusing alcohol or exhibiting other anti-social behavior.
While poor people who gamble do spend a greater portion of their income on gambling, research does not show that poor people are more likely to gamble or to gamble to excess, according to Dunstan. And no research goes so far to conclude that the poor are poor because they gamble.
Ironically, Dunstan found that facilities whose customer base were out-of-state tourists tended to export their problems back to the visitors’ home states. Another finding was that public perception about the types of people who gamble were rarely born out. By and large, gamblers tend to be people with disposable income who can afford to lose a little.
Statistics at Charles Town reflect Dunstan’s findings. Said John Fenimore, senior vice president for regional operations at Penn National, which owns and operates Charles Town Races and Slots, “Our average visitor is 55 years old, more likely to be female than male, who visits six or seven times a year,” he said. “They lose an average of less than $100 dollars per visit, have a higher level of educational achievement than the national average and a slightly higher income,” he added.
The social cost most often linked with the arrival of gambling has been a rise in street crime. Atlantic City, for example, went from a rank of 50th nationally for street crime to the dubious number one rank shortly after casino gambling arrived there. The adage is that Atlantic City was transformed from a slum by the sea to a slum by the sea with casinos. And casino gambling had a negative impact on many locally owned businesses in Atlantic City—forty percent of the restaurants in the city went belly up because casino gamers tend to eat and sleep in casino hotels and restaurants.
Even critics of the gaming legislation concede that crime problems anticipated with the arrival of slots, including street crime, have not materialized. Unlike Atlantic City and similar casino cities, the streets of Charles Town are not lined with gaming houses. It’s an all-in-one video-monitored, secure facility. To paraphrase another gaming city, what happens inside the Charles Town Racing and Slots stays there.
And while there would likely be impacts on some local business—existing motels, for example, Dunstan’s study hints that Charles Town is more like a factory town than a resort town. Local businesses may not get the tourists’ dollars, but they’ll profit from spending by new employees. People who work at the hotel-casino will want someplace to eat, shop and hang out; they won’t go to the track on their days off.
For Del. Robert Tabb, a Democrat representing District 56, the issue is not crime, but safety. “The security and cameras in place do a pretty good job,” he said. The larger worry for Tabb is the combination of alcohol and more drivers.
Yet Tabb’s concerns lie less with the effects of table gaming than with how the millions of tax dollars generated by the games will be distributed. Horse racing in Charles Town and Hancock County’s Mountaineer Race Track will evenly split the money in a pool funded by table games. But Charles Town will contribute twice as much. “I don’t feel real good about its effect on horse racing in Jefferson County,” he said. Tabb, though, has no plans to actively oppose a referendum on table gaming. “The law has a provision for county voters to recall the measure by a second referendum,” said Tabb.
Del. John Doyle (D-57) echoes Tabb in concerns about the impact on Jefferson County. He voted in favor of the bill, but is not enthusiastic about the referendum. “This bill was written for the Northern Panhandle. It’s not a good bill for Jefferson County,” said Doyle. According to Doyle, the intent of the bill was to create large destination resorts as economic engines. Jefferson County has a thriving and growing tourism industry carefully built on its heritage and natural values, said Doyle. He is concerned that the entrepreneurs who have built the regional economy will suffer if the gap at Harpers Ferry becomes a regular traffic jam. “Imagine the amount of traffic that comes for the Mountain Heritage Festival; imagine that every week,” said Doyle. He is concerned visitors will simply stay home.
Penn National has said it would build a 500-room hotel and conference center. This is in addition to the 153-room hotel already approved for construction—adding 623 hotel rooms in Charles Town. Then there is the additional 70,000 square feet of gaming space currently under construction, plus an anticipated 75 gaming tables.
In this light, the debate over table gaming is shaping up to be one about magnitude, not morality. Because of the quirky way land use decisions are made in West Virginia counties, the table gaming referendum could become, in effect, a public vote on whether people think the roads and infrastructure of Jefferson County can handle a major resort. In most states, decisions about the size and scope come at the time of an application to build. Local zoning officials would examine whether there were “adequate public facilities” in place to handle the growth. They would even determine whether the proposed location was desirable for such a facility at all.
“We don’t have adequate public facilities in our regulations,” said Jefferson County engineer Roger Goodwin. “West Virginia Division of Highways could request a traffic impact statement, and this would probably be a case where they would require one.”
Based on the findings of a traffic study, Jefferson County could require mitigation, such as turn lanes or deceleration lanes. According to Goodwin, the county would have no authority over what was built. Ironically, the largest private development in county history would not necessarily require a Community Impact Statement. “Community impact statements are required only when land is subdivided,” Godwin said.
This means any negotiating with Penn National about size, scope, and financial agreements beyond those in the legislation would need to take place before the referendum on table gaming. To be sure, the real battle-line issues in the West Virginia legislature focused on how to divvy up the prize. The West Virginia Lottery Commission projects between $70 million and $90 million annually from the Charles Town tables alone.
Having agreed to a 35 percent tax as a condition to get table gaming, it’s questionable whether Penn National would feel obliged to go further. How the voters divide that money is not a referendum issue.
Jefferson’s distribution formula differs from the other gaming counties. The entire take would go to the county board of education for capital and maintenance. This is a different formula than the one for slots, in which the county and the towns get a direct distribution. And there are set asides to subsidize track purses, track employee pensions, and distributions to the state’s other counties and municipalities. And 76 percent of the money to the state is earmarked for debt reduction.
In the time-honored tradition of ear-marking money for pet causes, legislators wanted their interests codified in law. It’s a brawl over bucks that will play out again in the appropriating process at the state, county, and municipal levels.
The upshot is that the cries for “X percent for farmland protection” and “Y percent for horsemen” that came up short in the statehouse debate could be reprised in the referendum. These two issues in particular are on the radar screens of referendum watchers.
Many will argue, as Penn National’s Fenimore has argued, that video lottery (a.k.a. slots) already have changed the fortunes of horsemen and horse racing in Jefferson County. The purses, subsidized by slots, are bigger and more attractive—$43 million last year, according to Fenimore. There seems to be broad agreement that slots, as promised, have saved horse racing in Charles Town.
The result is one not often publicly touted by farmland protection advocates: There are more horse farms in the county now than ten years ago and the number appears to be growing. “From 50 to 150,” said Jefferson County commissioner Jim Surkamp. He believes slots, by subsidizing the purses at Charles Town, have had an enormous impact on farmland protection. “It’s helping to keep land economically viable and it’s attracting the attention of world-class breeders and trainers,” he said.
Surkamp predicts a time when Jefferson County regularly produces top contenders for Triple Crown events. “I’m a big advocate for horsemen—the culture of the breeders, trainers and groomers,” said Surkamp. “As long as slots and table gaming are not permitted to exist without racing, it preserves open space and farmland.”
This is high praise coming from the Jefferson County official most closely identified with conservation. He is sanguine about prospects for a large hotel-convention center. “Jefferson County doesn’t have a large destination resort. I prefer heritage tourism, but I think the identity of Shepherdstown and the County’s heritage tourism industry is strong enough that heritage tourists would still come. I don’t oppose a large hotel near the track,” he said.
What’s most important to Surkamp is that voters have a reasoned, informed dialogue about table gaming, and that the referendum not be rushed. “I would like to see the referendum held during the 2008 presidential election to ensure good turn-out. What I’m most committed to is helping voters decide for themselves. I would like to see the issue thoroughly examined and vetted.”

Anticipating the nightly suppertime calls from various interest groups, Jefferson residents can only hope for the same.