The Commission met at the Thompson Center, 100 West Randolph Street, Chicago, Illinois, at 8:30 a.m., Kay C. James, Chairman, presiding.

KAY C. JAMES, Chair

WILLIAM A. BIBLE, Commissioner

DR. JAMES C. DOBSON, Commissioner

J. TERRENCE LANNI, Commissioner

RICHARD C. LEONE, Commissioner

PAUL H. MOORE, Commissioner

LEO T. McCARTHY. Commissioner

JOHN T. WILHELM, Commissioner

NANCY MOHR-KENNEDY, Executive Director

MARTHA CLEMENTS ROBERTS, Deputy Director

DR. TIM KELLY, Research Director

DOUGLAS SEAY, Associate Research Director

ALLISON FLATT, Associate Research Director

TIM BIDWILL, Special Assistant to Chair

AMY RICKETTS, Press Secretary

JANET NEWKIRK, Executive Secretary

DEBORAH DUCRE, Receptionist

Opening and Welcome 5

State and Local Officials 9

The Honorable Ann Hutchinson 10

The Honorable Scott King 13

The Honorable Kevin Kelly 16

The Honorable Donald Sandidge 19

Ann Daniels 22

Question/Answer Session 25

Securities/Futures Exchanges as Examples of Self-Regulation 38

The Honorable David Ruder 42

Alton Harris 48

Question/Answer Session 54

Staff Briefing on Riverboat Casinos 75

Riverboat Casinos I: Regulation and Regional Competition 91

The Honorable Earline Rogers 92

The Honorable William Witt 100

Michael Belletire 108

Rev. Tom Grey 118

Msgr. Jack Egan 120

Anita Bedell 123

Donald Wolf 125

Question/Answer Session 127

Riverboat Casinos II: The Economic Impact 146

Thomas Thanas 147

Don Phares 157

Earl Grinols 165

Ricardo Gazel 171

Question/Answer Session 180

Public Comment 202

Dr. Gerald Forshey 203

Mr. Rick Adams 205

Mr. John Alan Boryk 207

Ms. Jo Dean Joy 209

Mr. Mario DeBenedetti 211

Mr. Philip Crusius 213

Mr. Bill Seitz 215

Mr. Damien Cotton 217

Mr. Nicholas Huntley 218

Mr. Tom Cook, Jr. 220

Mr. Greg Markelz 223

Ms. Victoria Barnett 226

Mr. Calvin Chandler 228

Mr. Dick Thomas 229

Ms. Cheri O'Niones 231

Ms. Carla Davenport 232

Ms. Victoria King 234

Ms. Lori Callahan 235

Ms. Carla Taylor 237

Mr. Milton Gold 239

Ms. Anita Bedell 241

Mr. Vernon Bergstrom 243

Mr. James O'Dell 245

Ms. Adrienne Levatino 248

Ms. Toni Johnson 250

Mr. Ray Lasell 253

Mr. Robert Lucious 256

Ms. Kiesha Johnson 257

Mr. John Gabcik 258

Recess for the Day 260

(8:33 a.m.)

CHAIRMAN JAMES: I'm going to ask the Commission meeting to come to order. Good morning and welcome to the sixth meeting of the National Gambling Impact Study Commission. This is indeed our third site visit. My name is Kay James and on behalf of the Commission, I'd like to call this meeting to order and declare that we do indeed have a quorum to conduct business.

As I've done in each of the cities we've visited, I would like to take just a moment and explain exactly what the National Gambling Impact Study Commission is. For those of you who are joining us for the first time, this Commission was created by Congress in 1996 to, quote, "conduct a comprehensive, legal and factual study of the social and economic impacts of gambling in the United States, on governments, communities, businesses and individuals." This is an extremely timely study, as legalized gambling has grown to a $550 billion a year industry. Gambling is legal in all but two states, and 38 states operate some form of lottery. Many communities today are seeking information about the benefits and cost of gambling and its impact on the community.

The nine members of the Commission were appointed by the President, Speaker of the House and Senate Majority Leader. In June, 1999 we will report our findings to the federal, state and Native American tribal governments. Previously we've conducted three meetings in Washington, established an ambitious research agenda and conducted on site meetings in Atlantic City, New Jersey, and Boston, Massachusetts.

When the Commission developed its schedule of site visits, it was not conceived as an effort to visit every type of gambling occurring across the nation. To do so would take far longer than two years, more effort than nine individuals could muster and a whole lot more money than this Commission has. I think by now that each of the Commissioners has had a good idea what a casino, race track, lottery or slot machine looks like. We recognize that there are distinctions among the various types of casinos, betting parlors and lottery games and will continue to work to understand them. But our principal task remains as Congress directed, to assess the social and economic impact of legalized gambling upon the nation.

Instead, in devising a site visit schedule that crossed the nation and examined various forms of gambling, we hope to insure that we are able to hear firsthand from those who are directly touched by gambling, from families, business owners, gambling industry workers and government leaders. We hear on a daily basis from lobbyists who tell us about the positive and negative impact of gambling nationwide, but it is the individual housewife, the individual mayor, the individual convenience store owner who can tell you with experience what impact gambling has had on their community. In addition, we look forward to hearing from experts from the academic, regulatory and legislative arenas.

We're pleased to be here in Chicago today and tomorrow to discuss the issue of riverboat and Internet gambling, particularly the impact of the former in the Midwest. We appreciate the invitation extended to us by Congressman Weller and a few local officials to visit their communities. As I said earlier, we believe that our time on site could focus on hearing the testimony of experts and individuals and allow for substantive questions. I have encouraged individual Commissioners to come early, stay late, take extra time as needed to visit some of the sites.

In terms of meeting our responsibilities to Congress and the American people, this Commission has accomplished a great deal I believe already. Individual Commissioners represent varying perspectives and viewpoints on gambling and its impact in our communities. Consensus on some important areas is beginning to emerge. Nevertheless, much work remains to be done. Later this year we will visit California, Arizona, Louisiana, Mississippi and Nevada.

Much has been written about the strong and often contradictory opinions that surround our visits. We have invited many experts, individuals, government officials to testify before us. Some have very strong opinions for or against various types of gambling. Some groups have arranged press conferences, briefings and even demonstrations around our meeting day to make their points.

Spirited debate and differences of opinion are to be expected and I believe indeed encouraged. As the Dean of a graduate school of government, I teach all of our students that sound public policy involves the clash and debate of ideas. This is the very hallmark of our heritage and the democratic process. My responsibility as chairman is to ensure that the process with this discussion is fair, balanced, objective and to that end I believe we have developed a very informative agenda.

Part of my responsibility as chairman is to protect the right of all sides to be heard and I would ask everyone participating today, including the audience, to be respectful, civil and fair to others, particularly those who have differing opinions. For that, too, is a hallmark of our shared American democratic tradition. We're grateful to all of those who felt strongly enough to come here today and to be heard. The Commission is here to listen and to learn.

In closing, I'd like to thank Governor Edgar and the State of Illinois for their hospitality in hosting our meeting here. In particular I would like to express our appreciation to Mike Belletire and Susan Weber of the Illinois Gaming Board for their time, assistance and foresight. They've addressed numerous logistical details, provided valuable regional information and worked to insure that every side of the issue was represented. I'd also like to extend my sincere gratitude to Chicago Mayor Richard Daley and his complete commitment to assist our efforts here today.