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The last decade was kind to riverboat gambling. In the late 1980s and early 1990s, six states — Iowa, Illinois, Indiana, Louisiana, Missouri and Mississippi — legalized these floating casinos in an effort to produce more jobs and tax revenue. By 2001, some 90 riverboat casinos operated in the United States — mainly along the Mississippi, Ohio and Missouri Rivers. But after this period of rapid growth, the industry’s popularity as a source of tax revenue has waned. Other states haven’t rushed to bring riverboat gambling to their waterways. Some states just don’t allow any form of gaming, and in others, competition from different types of gambling has squelched riverboats’ growth. Even among the states that allow riverboat gambling, only two, Missouri and Indiana, are looking to wring more money from the industry. And those efforts face plenty of opposition. The problem isn’t financial. According to the American Gaming Association, last year riverboats generated $4.2 billion in tax revenue for the states that permit it. The industry faces other roadblocks. In Kentucky, there’s been talk of allowing gambling on the Ohio River to combat tourism losses to riverboat casinos in nearby Indiana and Illinois. But Churchill Downs — home of the Kentucky Derby — is such a force in the state that observers say that it’s more likely that Kentucky first will allow the installation of slot machines at the racetrack before it considers riverboats. Last year, before then-governor of Pennsylvania Tom Ridge packed his bags to head off to Washington, D.C., to become the nation’s director of homeland security, he warned his state’s lawmakers against rushing to adopt riverboat gambling. First hold a referendum, he advised. Ridge, known for his clean-cut image and national political ambitions, defeated a proposal for riverboats in Pennsylvania in 1999 by insisting on a referendum. Still, there is some legislative action now in two of the states where riverboat gambling is permitted. Missouri and Indiana are exploring ways to substantially increase existing riverboat attendance, revenue and taxes. Missouri is the only gaming jurisdiction in the world that has a “loss-limit,” rule, which is designed to keep customers from losing more than $500 in a given two-hour period. Repealing this restriction is the top priority for the Missouri Riverboat Gaming Association (MRGA), according to Troy Stremming, chairman of the MRGA’s legislative affairs committee. So far, though, no dice. Some lawmakers want to raise the ceiling to $750. Missouri Gov. Bob Holden supports repealing the limit entirely — but says he’ll do it only in exchange for an increase in casino admission and taxes. MRGA’s Stremming is not biting; that’s too high a price, he says. The gambling forces are having more success in Indiana. That state might face a $1.3 billion deficit by mid-2003, according to Merrill Lynch. This probably explains why this January the Indiana senate passed a bill that would permit the state’s 10 cruising riverboats to convert to “dockside” gaming (the boats never leave the docks). A similar bill passed in the state house last year, and the senate bill must again pass that chamber before landing on the governor’s desk. The financial difference between dockside and cruising can be enormous. If Indiana were to make the switch, according to a study commissioned by the Casino Association of Indiana, there would be a bump in state gaming tax revenue of more than 30 percent — to $2.5 billion in 2002. The corresponding rise in state and local taxes? From $170 million today to as much as $300 million. Little wonder dockside’s chances in the state house leave Phillip Bainbridge, a lobbyist for a consortium of eight riverboat casinos, saying, “We’re hopeful.” Of course, nothing’s a sure thing, except maybe this: The industry, says Tom Grey, executive director of the National Coalition Against Legalized Gambling, “will always try to expand — and it will try to shed restrictions.” Related chart: The Heartland Fleet

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