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In Nevada, gaming is a high-stakes issue

January 18, 2008|Peter Wallsten and Peter Nicholas | Times Staff Writers

LAS VEGAS — Barack Obama has warned about the dangers of gambling -- that it carries a "moral and social cost" that could "devastate" poor communities. As a state senator in Illinois, he at times opposed plans to expand gambling, worrying that it could be especially harmful to low-income people.

Today, those views are posing a problem for Obama in the gambling mecca of Nevada, which holds its presidential nominating caucuses Saturday. While his top rival, Sen. Hillary Rodham Clinton, also talks often about aiding low-income Americans, she has embraced the gambling industry and its executives, and her campaign has used Obama's past statements in an effort to turn casino workers and other Nevada voters against him.

The split on gambling between the Democratic rivals is a little-noticed but meaningful development that could affect the caucus vote Saturday and the broader election, as Obama and Clinton try to raise money and win votes in what is likely to be a drawn-out fight for the presidential nomination.

The differences could also help shape the outcome of the primary election in California, where the Feb. 5 ballot will carry four high-profile initiatives that could either rescind or allow an expansion of slot machines at Indian casinos. Californians who turn out to vote on those initiatives may also be motivated by a candidate's position on gambling when they cast ballots in the presidential contest.

"There's a fundamental question here," said the Rev. Tom Grey, executive director of the National Coalition Against Legalized Gambling. "Until this point, Obama's statements seemed to suggest that he did not buy into the industry arguments that this is a product like golf or Starbucks that should just go on Main Street. And Hillary, by attacking him, seems to have come down clearly on the side of the industry that this is economic development."

Although critical of Clinton's stance, Grey and others who want to limit the gambling industry are now watching Obama with a wary eye. Obama is courting union workers at casinos and has calibrated his criticisms to declare Nevada a "model" for properly regulated casino gambling.

The issue has come into focus primarily due to the Clinton campaign, which has distributed a document to local reporters, headlined, "Obama Blasted Gambling as Socially Destructive and Economically Irresponsible," listing several of his past quotes.

Among them are a 2003 comment in the Chicago Defender, a black newspaper, in which Obama argued that the "moral and social cost of gambling, particularly in low-income communities, could be devastating."

In 2001, the Clinton memo states, Obama described himself as "generally skeptical" of gambling as an economic development tool and likened the expansion of slot machines to the state lottery, in which, he said, "you'll have a whole bunch of people who can't afford gambling their money away, yet they're going to do it."

As part of its efforts to publicize those statements, the Clinton campaign has secured the help of top industry players -- several of whom participated in a campaign-sponsored conference call with the media last week designed to chastise Obama.

Former Las Vegas Mayor Jan Jones, now a senior executive at Harrah's Entertainment, and Philip Satre, a former Harrah's executive and top industry spokesman, argued on the conference call that gambling had brought jobs and much-needed tax revenue to many communities, including economically challenged places in Obama's home state, such as Joliet, Ill., home to a casino.

They disputed the argument that gambling causes social problems and that those problems disproportionately affect lower-income people.

"People are not gambling away their mortgages," Jones said in an interview later, adding that she planned to raise campaign money for Clinton.

"We saw the caucus as an opportunity to really showcase how important this industry is to providing capital investment and jobs that give Nevada residents the opportunity to live the American dream," she said.

Former Nevada Gov. Bob Miller, an official in Clinton's campaign and a board member of International Game Technology and Wynn Resorts, said Obama's stance was reason for Nevada voters to choose Clinton.

Obama, said Miller, has been "critical not just of gaming in Illinois, but gaming as an industry. Sen. Clinton, to the contrary, has always been supportive and understanding of our industry." He said he was not speaking for Wynn Resorts or International Game when talking about the presidential contest.

Satre, former chairman and chief executive of Harrah's Entertainment, said he too would help raise money for Clinton. Obama, he said in an interview, "doesn't think gambling should expand. He thinks gambling has a moral and social corruption attached to it."

Satre and Jones are part of a group of Clinton supporters called the Nevada Business Leadership Council. Satre said the group's purpose is to act as a sounding board for the candidate on Nevada's business climate.

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