Black Hawk's Gamble

See related articles Politicians Bet the Farm and Problem Gamblers In Their Own Words

It has been less than a week since Fran Fry was in Black Hawk, Colorado, a town of more than 20 casinos and fewer than 200 residents, and she cannot stop thinking about the place. Still wearing a nametag ("25 years of service") from the furniture store where she works, Fry, 58, lights a cigarette and tries to quiet her yapping Maltese, Bentley. "All I want to do is gamble," she says in the living room of her Englewood, Colorado, condominium this December evening. Her gambling habit has cost her and her husband, Michael, 59, also a furniture salesperson, roughly $680,000; a tri-level, four-bedroom house; and, she says, "a lot of self-respect."

Like most gambling stories, Fry's begins with a win: $277 in quarters, collected from a slot machine in Black Hawk one evening in 1994. "I'd go week after week. It took hold of me so bad," she says. Fry thought she was on a roll. So did a lot of people in Colorado. In 1990 voters approved an amendment to the state constitution allowing limited-stakes gambling in Black Hawk, located about 30 miles west of Denver, as well as in two other former mining towns, Central City and Cripple Creek. Civic and business leaders promised big rewards, explaining that gambling would create jobs, raise property values, and provide money for roads and historic renovation. Besides, they said, casinos are part of the mystique of a frontier town, which is founded on dreams and jackpots. "This is a proposition where everyone can win," wrote a gambling supporter in a 1989 letter to a local newspaper. And in many ways, Black Hawk has hit the jackpot, with its casinos generating roughly 80 percent of the state's $69 million in adjusted gross proceeds from gambling in 2006.

But those proceeds have come at a price. Black Hawk has come to reflect the aspirations as well as the heartbreak and sickness that come with the introduction of slot machines, poker, and table games in cities and towns across the country. Other states are poised to take the same gamble. Residents of Maryland and Massachusetts are debating the benefits of legalizing slots, and California and Florida have considered ways to expand their gambling venues. People living in those states, and anyone else concerned about the future of small communities in the United States, might want to take a look at what has happened here.

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Gilpin County, where Black Hawk is located, earned a reputation as "the richest square mile on Earth" during the gold rush of the 1860s and 1870s, writes Patricia A. Stokowski in Riches and Regrets: Betting on Gambling in Two Colorado Mountain Towns. But as the price of gold fell steadily in the coming decades, the county suffered a slow decline. By the late 1980s, the economy had ground to a halt.

Business owners and elected officials were keen to open up the area to casinos. One state senator, Sally Hopper, warned in 1990 that if gambling were not approved, Black Hawk and the other towns would "crumble before our eyes," Stokowski writes. But gambling proponents made things look much worse than they actually were. In fact, Gilpin County residents had a slightly higher median household income than people living in other parts of Colorado. Yet the "rhetoric of despair," as Stokowski describes it, was powerful, as was the promise of riches. On Nov. 6, 1990, 57 percent of voters supported an amendment to allow limited-stakes gambling, and within a year there were 18 casinos in Black Hawk alone. These weren't the quaint, Old West-style gambling halls that voters envisioned. They were mega-chains like Bullwhackers, Harrah's, and Caesar's Palace, which all opened up casinos complete with restaurants, live entertainment, and their own distinctive theme décor. It is hard to see exactly how Isle of Capri Casinos' palm-leaf ceiling fans or Fitzgeralds' leprechaun wallpaper fit into the mining-town aesthetic.

It's not only the décor that's different from what Colorado voters envisioned. Casino operators raked in $799 million in 2007 but only paid 14 percent of that back to the state -- far less than the 40 percent originally discussed. As the casinos became increasingly vocal about the percentage they wanted to keep, politicians complied and lowered the tax rate. More importantly, the industry seems to have fared no better than the mining companies in fulfilling its promises to revitalize the local economy. In the late 1800s, miners stripped the earth, leaving behind barren, yellowish swaths. Casino owners, too, have ravaged the area (one developer, Windsor-Woodmont, moved a mountain, or at least the top of one), Stokowski writes, with a similar goal: "Get in, get rich, get out."

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The dirty secret in Black Hawk and other casino towns is that the industry is largely supported by people like Fran Fry. Roughly 30 percent of the cash that casinos rake in comes from problem and pathological gamblers, according to a 1997 study by Henry R. Lesieur, founder of the Journal of Gambling Studies. Attorney Terry Noffsinger of Evansville, Indiana, who has sued casinos on behalf of compulsive gamblers, says, "The casinos do an awful lot to get those people to come back." Michael Fry saw it first hand. "They'd send two hundred dollars a week in coupons," he says. "To each of us," Fran Fry adds.

In 30 out of 48 states with legalized gambling, public money is available for the treatment of problem gamblers. Not in Colorado. Rep. Dianne Primavera, a Democrat in the Colorado House of Representatives, is drafting a bill to help fund gambling-addiction counseling. Currently, fewer than five certified counselors practice in the state. "It would be great if we had twenty," says Lois Rice, who serves both as executive director of the Colorado Gaming Association, an advocacy group for limited-gaming casinos, and as a member-at-large of the Problem Gambling Coalition of Colorado. "That would be a start."

It's not just the problem gamblers who are hurting from the casino boom. The whole community has suffered. Domestic violence, child-welfare cases, and felony arrests are persistent problems, and aldermen in Black Hawk have faced accusations of corruption and cronyism. These social ills are endemic to the industry. Six years after a casino opens, violent crime is on average 10 percent higher than in areas without legalized gambling. Bankruptcy increases at the same rate. And roughly 20 percent of people who seek help for gambling addictions have attempted suicide, according to the Journal of American Medical Association. (Colorado does not track the number of suicides related to gambling.)

Only a fraction of the state's cut of the casino revenue goes to police, fire, and social-service agencies to help soften the impact of gambling on the community. Last year, the district attorney's office of El Paso County, which borders Gilpin County, was awarded $414,050 from this fund. Of the 39,000 felony and juvenile cases seen by the district attorney's office in a year, 2,700 were "gaming related," says Glory Ortega, of the Colorado Department of Local Affairs. In other words, they involved suspects arrested going to or from casinos. El Paso County Court Appointed Special Advocates, which represents children in cases of abuse, neglect, and violence, received $60,395 for a caseload of 25 children (out of a total of 199) in gambling-related cases.

A portion of the state's gaming revenues also goes directly to the municipal governments of Black Hawk, Cripple Creek, and Central City. The allocation of these funds has been controversial, especially since "conflicted" Black Hawk officials have received hefty historic-preservation grants, according to Robert Brown, an agent with the Colorado Bureau of Investigation. In February 2004, the Black Hawk Board of Alderman agreed to use some of this grant money to purchase land owned by Alderman David Spellman for $625,000. CBI agents investigated the matter but declined to discuss it since, as spokesman Lance Clem explains, "it still has quite a bit of sensitivity to it."

"Nothing was ever charged, which would indicate that no wrongdoing was found," says City Manager Richard Lessner. In July 2006, the town voted Spellman in as mayor.

***

A neon sign outside of Isle of Capri Casino says, "GAMING EXCITEMENT," but that is in short supply here this evening. The place smells of coffee and clove cigarettes. A woman dressed in sweat pants stares at a Wild Cougar video slot machine, hitting "Bet" buttons with a bandaged finger. Other-wise, she remains motionless, tethered by a plastic tube to an oxygen tank on wheels. Customers wander the aisles, clutching plastic water bottles, or sit, alone and silent, at the slot machines. Yet for many the place is irresistible. As a cashier at the casino explains, people wait in line at 8 A.M. for the doors to open.

In 2003, Fran Fry wrote letters to Isle of Capri and the other Black Hawk casinos, asking them to ban her from their premises. Casino operators try to honor such requests, but, as a practical matter, it is difficult. Warning signs are posted: "Knowing Your Limit Is Your Best Bet," says a yellow sticker on an ATM machine at Isle of Capri.

But there are few formal mechanisms to ensure casino operators keep problem gamblers from coming back or provide resources to help them recover from addictions. When it comes to problem gambling, says Don Bermania, a spokesman for the Colorado Division of Gaming, "the industry pretty much regulates itself." Fry eventually succeeded in getting herself banned from Isle of Capri. But she and Michael kept going back to the other casinos. "When you're in retail, and you're dealing with the public, it's awful. I kiss people's butts all day," Michael says. "That's all we've done all our lives. I was up there at the casinos because I like the treatment."

Fran always wanted to stay longer, though, and Michael waited for her. "I'd sleep on the floor under the drapes where they wouldn't see me," he says. "I told her she was addicted to gambling, and I was addicted to her." At times, Fran says, she would stash credit cards in her panties so he would not see them. After a gambling binge, she says, "I would vomit and have anxiety attacks. I would wonder where I was going to get the money. But nothing would stop me from going."

Late in the evening at the Frys' condo, Fran places on the table a casino coupon: "$25, valid 12/16/07 -- 12/31/07. Free Snowman Cookie Jar and Plate Set." She lights another Marlboro. "They do not do anything to help the compulsive gambler and neither does the government because they're making a profit," she says. "It's sick."

Michael glances at the coupon. "What's sick is we're all buying into it."

See related articles Politicians Bet the Farm and Problem Gamblers In Their Own Words

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