Wednesday, April 13, 2011

What is Senate Bill 11-233 "Video Lottery Terminals"?

Senate Sponsors: Mary Hodge (D), Lois Tochtrop (D)

Description: If passed, The Colorado lottery commission (commission) is given discretionary authority to license no more than 2 lottery retailers to install and operate video lottery terminals (VLTs). Qualifications to be a lottery retailer are established in the bill. A lottery retailer is prohibited from installing or operating a VLT unless certain conditions are satisfied. VLTs may be installed and operated by a single lottery retailer at a limited number of sites within Colorado. The bill specifies that VLTs shall not be installed or operated at more than 2 sites within Colorado.

The commission is given rule-making authority to implement the bill and to monitor and regulate the operation of VLTs. Each VLT is subject to approval by the commission in accordance with its rules and must meet certain requirements. Lottery retailers are required to be responsible for all expenses necessary to purchase or lease, install, maintain, and operate VLTs. Lottery retailers are entitled to receive a specified percentage of net machine income from VLTs. The remainder of the proceeds from the operation of VLTs, net of expenses and prizes, is required to be distributed in accordance with section 3 (1) (b) (III) of article XXVII of the state constitution.

The Colorado lottery higher education fund (fund) is established by the bill. Moneys in the fund are to be used to provide postsecondary education financial assistance. All revenues that would otherwise be allocated to the general fund pursuant to section 3 (1) (b) (III) of article XXVII of the state constitution are to be credited to the fund except for a portion of the moneys to be credited to the public school capital construction assistance fund up to a specified amount and a portion of the moneys to be allocated to Colorado community colleges in certain circumstances.

Full Text of Bill (04/07/2011)

It has been reported that the bill initially offers a monopoly to one company: Aurora-based Mile High Racing and Entertainment. Mile High operates the Arapahoe Park race track in Aurora and off-track betting sites in Aurora and Commerce City.

"For all practical purposes, a video lottery terminal is a slot machine, " explained Commerce City Councilperson Kathy Teter, who heads up Protect Our Neighborhoods (PON), a coalition of local elected officials that is opposing SB11-233. "Racetrack owners tried to convince Colorado voters that video lottery terminals weren't slot machines back in 2003, but voters saw through the scam and overwhelmingly defeated that ballot measure."

"It's important for legislators to understand what SB 233 will mean to local taxpayers," said Aurora City Councilperson Robert Broom, a member of PON. "The casinos envisioned in SB-233 would be bigger than anything we currently have in Black Hawk, Central City or Cripple Creek. The facilities would put enormous pressure on our infrastructure and force local taxpayers to pick up the tab."