Gaming pays off for communities as Legislature eyes expansion
GILLETTE — Jodie Warlow sat in Wyoming Downs on Wednesday afternoon, watching as various symbols spun across the screen. She hoped to win big.
It’s a weekly tradition for Warlow. She’ll spend half an hour to an hour trying her luck.
“I only do like $20 each time, and then I leave,” she said.
Warlow said she’s won $250 here and there. The most she’s ever hit at any one time is $650.
Before historic horse racing machines were legal in Wyoming, Warlow would go to Deadwood, South Dakota, to gamble. She wishes they would’ve been legal a long time ago.
“Keep our profits here instead of going to South Dakota,” she said about the economic benefit of the betting machines. “It’s good revenue.”
Strangely enough, games of chance (or skill, as some would rather claim) are a growth industry in Wyoming, not only for those who run the businesses, but for the governments that are increasingly relying on their tax revenue.
During a time when other revenues in Wyoming seem to be on a steady decline, gambling has only increased in popularity each year.
A total of $2.1 billion was wagered on historic horse racing in the Cowboy State, and $1.9 billion has been paid out to winners from 2017 through the first seven months of 2020.
Since the Wyoming Lottery’s inception in 2014, more than 5.3 million winning tickets have been sold, and about $83.3 million has been paid out to winners.
On Feb. 5, a Gillette man won big, placing a $3 bet and winning $490,685.58, the largest historic horse racing jackpot in state history.
Sarah Pittman, a lead teller at Wyoming Downs, was there that night. She paid out the winner, who she said was “kind of speechless” when he hit the jackpot.
“I’ve never seen somebody hit that much money, obviously,” she said. “I teared up, even.”
She knew that it was Wyoming Downs’ biggest jackpot, but she didn’t know it was a Wyoming record.
Ron Doty understands the popularity of historic horse racing. For him, the races are a chance to get away and relax, but the prospect to hit a jackpot is always nice.
“I come, like, once a month, put a hundred bucks in and see where I can go,” he said.
The most he’s won is $1,200. It was an “all right” feeling, he said. He’s won a lot more at various casinos, but “it’s always a good feeling to walk out (with) more than you walked in with. I just come to have a good time.”
Doty said if he ever won a half-million dollars like the recent jackpot winner did, he would still gamble on occasion.
“But I’d still do it like I always do. I wouldn’t change how I did things,” he said.
This past decade, legislators have worked to regulate gambling, which has turned into quite a moneymaker for the state.
As revenues from the energy industry, especially coal, continue to drop, state Sen. Ogden Driskill, R-Devils Tower, expects lawmakers to look at expanding gambling as one way to bring in more money to the state.
Historic horse racing began in 2013. The Wyoming Lottery launched in 2014. In 2020, the Wyoming Gaming Commission was created and the state began regulating skill-based amusement games.
This year, there is a bill, Senate File 56, which would continue the authorization of the skills games. It repeals the sunset date for the operation of skills games in Wyoming that was laid out in a 2020 bill. The measure passed the Senate and is going to the House.
“If they don’t affirmatively acknowledge skill games this year, they automatically go away,” Driskill said, adding that he believes it has a good chance of passing.
Legislators were “so-so” on skills games at first, he said, but have become “much more supportive” now that they see how much money is coming in.
“It’s shocking the amount of money that’s around there in gambling,” Driskill said.
In 2019, nearly $800 million was bet on historic horse racing alone, $732 million was paid out to winners and $7.9 million went to cities and counties.
In 2013, the state Legislature approved a bill that gives communities that had or have live horse racing the option to authorize historic horse racing. In fall 2015, historic horse racing machines were shut down after then-state Attorney General Peter Michael ruled they were not compliant with state law. The machines were down for 18 months but were reinstated.
There are three places in Gillette where people can bet on historic horse racing. Wyoming Downs has two locations, one on Westover Road and one in the former Mingles building, and Wyoming Horse Racing has a location in the Sundance Lounge.
As neighboring states expand their gambling options, “it starts making it a lot harder to not have it in Wyoming,” Driskill said.
“What you end up with is citizens crossing state lines to spend dollars,” he added. “If things are happening that are quasi-legal, either make them totally illegal or legalize them.”
State statute dictates where the money from gambling goes.
Historic horse racing operators must pay 1 percent of the total amount wagered to the city and county where the machines are located. The state treasurer gets 0.25 percent, and 0.25 percent goes to the state’s Legislative Stabilization Reserve Account. In 2020, $6.7 million was paid to counties and cities, and $3.93 million came in the second half of the year despite a pandemic.
In 2019, a total of $793.5 million was wagered on historic horse racing throughout the state, and 17 percent of that, or nearly $140 million, was wagered in Gillette. And through the first seven months of 2020, $61 million was wagered in Gillette. Both years, Gillette bet the second highest dollar amount in the state, trailing only Cheyenne.
“There was definitely a little bit of a lull (because of COVID-19), but people are pretty dedicated,” Pittman said.
In 2020, Gillette and Campbell County each received $597,308 from historic horse racing. That was despite all locations being closed from March 20 through May 8 because of the pandemic.
It was down from 2019, when the entities each got $699,414, but it’s still the second highest total ever.
From 2016-20, Gillette and Campbell County each received nearly $2.2 million, meaning about $4.4 million has gone to local government in the last five years.
The Wyoming Lottery is required to transfer at least 75 percent of its revenue to the state, which will distribute that to counties and municipalities based on the number of tickets sold. The quarterly transfers began in April 2016 and so far have totaled $21.5 million.
In total, Gillette’s received more than $1 million, and Campbell County has received more than half a million dollars through the lottery.
As for skills games, 45 percent goes to the county and municipality where the game is located. Another 45 percent will go to the School Foundation Program and 10 percent to the Wyoming Gaming Commission. In 2020, the games brought in $1.5 million in revenue to the state. Of that, $679,370 went to counties and municipalities, $679,370 to the School Foundation Program and $150,971 to the gaming commission.
In 2020, Campbell County received $31,366 in tax revenue from the skills games, while Gillette got $18,675 and Wright saw $4,718.
“It does provide a good revenue source for us, and if it’s controlled the way it is now, I think it’s a positive. It’s a plus for our county,” said Campbell County Commissioner Del Shelstad.
“The gambling aspect in our community is fairly unique, it’s never been known for that. Wyoming’s always been conservative like that,” he said. “I just think it’s a thing in this community that’s going to continue to grow.”
While it’s a good thing that money is coming to the state, Driskill said he’s always concerned about gambling getting out of control. That’s why he pushed for the creation of the Wyoming Gaming Commission.
“It wasn’t done to promote gambling, it was done to make sure the gambling was regulated,” Driskill said.
He’s not crazy about expanding gambling in Wyoming. Other legislators are leading the charge in that area, but in his opinion, “socially, it’s not a good deal for Wyoming. There’s some impacts that go with it,” Driskill said.
But it has had a big impact economically. Some businesses have grown to depend on gambling, whether through selling lottery tickets or having skills games.
“For a convenience store that’s struggling, that could make a difference in whether they operate,” Driskill said.
Driskill doesn’t think the state Legislature will legalize online sports betting this year, but it could happen in a few years.
“It could easily, over time, get there,” he said.
Warlow said she hopes the state legalizes slot machines next. The games have been ruled illegal because they don’t require any skill by the user, but she said a diversified gaming environment is “more entertaining.”
It’s unknown whether lawmakers will expand regulations enough to make that happen, but for now Warlow’s happy with what Wyoming has. If she ever hits a jackpot, don’t expect to hear from her. She’ll keep it a secret.
“I wouldn’t want anybody to know,” she said, because once it’s known you’re a winner, “the friends come out of the woodwork.”