Gambling in Washington shifts to tribal casinos

The Olympian

OLYMPIA — Colorful and brightly-lit signs identify each bowl behind the bar: “Defenders of Freedom.” “Hanky Panky.” “Nature’s Calling.” The transparent containers are full of tiny slips of paper: pull tabs.

James Tortella buys about 20 “Big Bar Bounty” tabs at 50 cents each. He shells them like peanuts, but finds only drawings inside – a lime, a jukebox, a bunch of grapes. There are no cash amounts that identify a winning ticket.

He buys another basket of 20. This time, a hit: a $10 prize. Last week he won around $700, leaving him slightly ahead.

Pull tabs and a Miller High Life are a way for Tortella, 29, to pass a Tuesday afternoon while his laundry spins at his downtown Olympia apartment building a few blocks from Hannah’s Bar and Grille.

“I really don’t feel like driving all the way out to the casinos to throw a couple bucks in the slot machines,” Tortella said. “I’d rather sit here at a local place.”

That leaves him among a shrinking minority of gamblers. For years, others have been deserting old-school games in favor of the electronic machines that Indian tribes can offer.

That shift in gambling interests has led the state to shed employees who regulate the games — about 23 percent of the Gambling Commission’s staff in the last decade. In the latest round, the state sent layoff notices this month to more than a tenth of the commission’s remaining staff.

Accounting for inflation, gambling in Washington has increased more than fourfold since 1996, although the growth shows signs of reaching a plateau.

The boom has happened at tribal casinos. Everywhere else, legal gambling has declined.

In 1996, Washington’s Indian tribes had only recently begun opening true casinos after a change in federal law. Pull tabs and their close relatives, punchboards, were the biggest game going.

But pull tab receipts today are a fraction of what they were then, and make up just more than 2 percent of gambling operators’ net receipts.

For a while, the gap was more than filled by the rise of house-banked blackjack, which the Legislature legalized for nontribal card rooms in 1997.

But card rooms peaked in popularity a decade ago and have been fading ever since.

Also a decade ago, voters rejected allowing the equivalent of electronic slot machines in bars and card rooms, turning down a Tim Eyman-sponsored measure after an expensive fight between tribal and other casino interests.

“We cannot compete with the tribal gaming,” said Jason Lindquist, co-owner of Tacoma’s West End Pub and Grill.

Lindquist says pull tabs are dying. While enough customers still play to make the game profitable for the bar, some have stayed away since the state banned smoking in public places in 2005.

“We like the place nonsmoking now,” Lindquist said, “but it took a certain customer (away), and they went straight to the tribal gaming, because they don’t follow the same rule.”

The bar no longer has an employee dedicated solely to managing pull tabs, he said.

Younger generations of gamblers are used to getting their entertainment from an Xbox, and they want the interactivity that machines can give them, said W. Ron Allen, leader of the Washington Indian Gaming Association.

Fewer gamblers want to play cards – even at casinos – and even fewer want to play pull tabs when they can play slot machines that are essentially electronic pull tabs, Allen said.

Gambling companies argue the tribes have an unfair monopoly on slot machines, and the companies have often tempted state lawmakers with revenue-raising expansion proposals. But Allen argues the machines, run by sovereign governments, should instead be compared to the state lottery.

“The tribes’ revenue is mandated by law to be used (for) general public purposes, so we have to show that we’re using it for community, education, etc.,” he said. “The private sector is just that.”

The state doesn’t get a direct cut of tribal gambling revenue, but the Gambling Commission plays a role in regulating the casinos — a role Allen sees as duplicative and wants to reduce. Tribes pay the commission a fast-growing reimbursement for its expenses.

But the commission’s total revenue has slipped more than 16 percent since 2005, prompting the agency to cut its staff of 174 to 134 through attrition during that time. Now it’s downsizing again, to the equivalent of 111 full-time employees by mid-2017.

The agency said attrition won’t be enough this time, and notified 15 people they would be laid off in three waves: on Jan. 31, March 31 and June 30. Some are managers. Most are agents.

The Legislature returns in January and could avert some of the layoffs. The commission is asking for more than $2 million from the state’s general fund to pay for undercover operations to investigate illegal gambling.

Even with gambling licenses down by more than one-fifth in 2014 from nine years earlier, the commission insists illegal gambling has only proliferated. Online gambling is illegal.

Criminal complaints and investigations increased more than 20 percent between 2005 and 2013, the agency reported.

“We have this statewide mission we need to continue to carry out, and we want to be in the best position to do what the Legislature and citizens expect us to do,” said Amy Hunter, who leads the commission’s communications and legal division.

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