State lawmakers are betting on the whirl of a spinning roulette wheel, the rattle of poker chips, and lady luck to bring in new tax dollars as they look to expand gaming capabilities amid deepening financial deficits.
The strategy is paying off. In 2011, the states that saw the largest increases in tax revenue were those where new casinos opened during that year or had a full year of operations. This included Kansas, which saw a 38% bump, and New York, which increased 17% , according to the American Gaming Association.
The most recent state to at-tempt to increase its gaming options was Maryland, which had its residents vote on Question 7 this past November, which would allow gambling to expand in the state.
The ultimately successful ballot authorized table games and increased the amount of lottery machines and video lottery machine operation licenses.
A key component to the success of the initiative was an aggressive eight-month PR effort that had strong central messaging.
In 2011 commercial casinos returned $7.93 billion of its revenues to states and localities in direct gaming taxes – a 4.5% increase over 2010, according to a 2012 State of the States survey by the American Gaming Association.
The gaming industry is also a significant source of employment, employing 339,098 people who earned $12.9 billion in wages, benefits, and tips during 2011.
States such as New Jersey saw declines in gaming tax revenues in 2011 due in part to increased regional competition from operations in Delaware and Pennsylvania.
"The core message was 'what's best for Maryland?'" says Jan Jones, EVP of corporate communications and government relations at Caesars Entertainment. "We emphasized that this measure would create jobs and increase funds for education."
Her company, along with MGM Resorts International, which was seeking to build a new casino just outside Washington, DC, was the biggest financial backer of the initiative.
To help garner support, Caesars tapped Kearney O'Doherty Public Affairs. The first step began in February 2012 when the firm had to get state legislators to create and pass a bill. To do this, the company used research showing residents were interested in an expansion in gaming. A grassroots effort was also launched where people wearing T-shirts and waving signs showed up at hearings.
"This was being driven as a job-creation legislation. The media picked that up," says Howard Libit, chief operating officer at the public affairs company.
State lawmakers passed a bill in August and a question related to expansion of gambling was then put on the ballot. From there the fight was on to generate enough support among voters.
Penn National, the third largest publicly held gaming company in the country, opposed the effort. If Question 7 passed, its lucrative gaming operations in West Virginia would be threatened, says Steve Kearney, co-founder of Kearney O'Doherty.
Instead of a straightforward assault on Question 7, Penn National performed its outreach through less-expected groups such as the National Gay and Lesbian Task Force and Get the Facts Vote No on 7.
Through these channels, the company alleged that expanding gaming would not lead to better schools, jobs, or lower taxes.
It was a shift in messaging for the firm. Penn National argued that expanding gambling would indeed lead to more jobs when its outreach efforts successfully resulted in expanded gaming options in Ohio in 2009, Bob Tenenbaum, a media consultant for the company, told PRWeek. He declined to comment on the change in strategy in Maryland.
"Making it clear that all, not most, of the anti-Question 7 effort was being funded by one West Virginia casino was a tipping point," says Kearney, noting that when the campaign was in a legislative phase this was unknown to them.
"This situation was not a common occurrence," explains Holly Wetzel, VP of communications at the American Gaming Association, regarding Penn National's effort to block Question 7.
Another strong counterstrike for Kearney O'Doherty was releasing findings that more than $1 billion had been spent by Maryland residents at West Virginia gaming operations in the last decade.
The reveal "made the size of the problem clear, and helped clearly define the self-interest on the other side," says Kearney.