March 13, 2003 – Dozens of community members stayed late into the night Thursday at the Legislature Building in Frederiksted waiting for a turn to speak at the first of two Senate hearings on legislation that allows video lottery gambling in the St. Thomas-St. John district.
The Committee of the Whole convened to hear testimony from key players in the controversy over Southland Gaming's video lottery machines. As issue were such questions as how the machines are regulated to ensure that minors do not play and that tourists do, and what effect the law, if allowed to stand, will have on St. Croix.
As the meeting began, about 50 people sat in folding chairs outside the Senate conference room watching the proceedings on television. Inside, the chambers were packed. Sen. Raymond "Usie" Richards asked that the members of the public be allowed to speak first. Senate President David Jones, who chaired the committee, denied the request. Upon a challenge to that ruling, the committee was split down the middle, with six for and six against, killing the motion.
Jones, who has long supported video lottery terminals, said the purpose of the meeting was to "present information based on the facts."
"There has been a lot of misinformation, and I'll use the term 'propaganda,' in the public domain," Jones said. "There have been massive public relations campaigns waged by certain members of this community."
He referred to the United Virgin Islands Action Coalition, a group that has been very vocal in its opposition to VLT's and which encouraged public attendance Thursday night.
Michael Jones, a consultant to the V.I. Lottery, said the machines are intended only for placement in areas of high tourist traffic and locations which are age controlled, such as bars.
He and Southland Gaming's president, Bob Huckabee, asserted in their testimony that the V.I. Lottery bears the onus in regulation of the games. "The rules and regulations are not incorporated in any legislation," Michael Jones stated. "They would be incorporated in the Lottery rules and regulations.
"The Virgin Islands can be producing much-needed revenue in weeks, not years, and it can be as tightly controlled as the Lottery wishes it to be," Michael Jones said. But the V.I. Lottery has been without a commission since the 1990s due to unfilled vacancies, and its executive director, Austin Andrews, was a no-show at the hearing.
Eileen Petersen, Casino Control Commission chair, has long posited that unregulated VLT's could deter casino investors from building on St. Croix. That assertion was bolstered by the recent announcement by one developer that he would cancel plans for a $500 million resort and casino if the law stands.
The developer, Curtis Robinson, was not present at the hearing and indicated via a letter that he had prior commitments. But he reiterated his position: that VLT's, no matter where they are placed, do not create new jobs in the territory.
"Video lottery in the United States Virgin Islands also means that my decision to invest over $5 million of my money in the Robin Bay project was not prudent," Robinson said, referring the planned Seven Hills Beach Resort and Casino.
Had he been able to attend the hearing, Robinson said, he would have asked for repeal of the law allowing VLT's. "I also ask that the Legislature begin working with me so that I can build the finest resort in the Caribbean on St. Croix," he wrote.
"Much information is misleading"
Michael Jones, quoting an article from the Gaming Law Review," argued that casino gambling and VLT gambling are "vastly different" and that the machines do not reduce casino play according to the findings of some studies. "Much information is misleading, and its intent is not based on the real-life experience of communities with casinos and VLTs," he said.
Huckabee said his company responded to a request for proposals back in 1997 and was subsequently invited to bid on the system. "We were invited to come to the territory by the government, as were probably 12 to 15 other companies," he said.
Tourists off the ships "understand VLT's and will play them," Huckabee said. "That's the reason video lottery was introduced, and the most important part is that it does generate new money for the territory." How much money? A conservative revenue estimate, Michael Jones said, is about $15 million per year.
But at what cost? Robinson has said his project will create at least 3,000 new jobs for people in the territory, as well as bring in innumerable tourists to St. Croix, where currently that industry is lagging.
Petersen said the argument remains as it did once word about the video lottery came out years ago: "They make it very difficult for one to encourage qualified, interested persons to invest in your community."
But Michael Jones said the machines operating on St. Thomas and St. John should have no effect on the success or failure of a casino on St. Croix. "I've never met a single casino owner who wanted any competition," he said, referring to Robinson. The idea that VLT's "somehow affect tourists visiting St. Croix is not a logical position."
Huckabee took much the same tack: "From a competitive standpoint, there is no evidence that shows VLT's would affect the success of a resort or casino at all," he said. "In fact, all the evidence points to casinos and VLT's existing together."
Paul Golden, the developer of the only other casino and resort project currently planned for St. Croix, agreed. Corresponding with the committee via his attorney, Lloyd Levenson, he told the senators that his $130 million project is moving forward. Levenson said the financing is being finalized and that his company, Golden Gaming, is obtaining the necessary zoning approvals.
Golden: VLT's okay except in hotels
Golden said he is not opposed to VLT's and believes that, if limited to tourist areas, they would not have "any real impact on the Golden Resort project." However, he said that VLT's in hotels would have a detrimental impact on the project.
Members of the local community, finally given an opportunity to speak around 11 p.m., said loss of the huge Robin Bay project would spell catastrophe for St. Croix.
Noel Loftus, representing St. Croix Alive, said the public has had no input on the VLT issue until Thursday. "And even then we have had to wait in excess of five hours," he added.
There is speculation that unemployment on St. Croix may be as high as 20 percent with recent layoffs at the Hovensa oil refinery. Recent V.I. Labor Department statistics put the figure at 12 percent, but that was counting only those unemployed people actively seeking work.
"All this is about is St. Croix needing hope," Loftus said. "It's about the people of St. Croix needing jobs. Really, what it all is about is an opportunity." He said he takes Robinson at his word and that the Seven Hills development is sorely needed on the island.
"We have people who need work, and Robin Bay is the only thing on the horizon that we see as real," he said. He said the people of St. Croix have been treated poorly by the government, "and I'm not going to tell you I find this very acceptable."
Yoki Hanley said VLT's provide no jobs for Crucians, whereas Robin Bay could employ thousands.
VLT proponents have said the gaming machines can bring $12 million a year in revenues into the territory's coffers. Hanley, however, said that "I don't see how $12 million is outweighing nearly $1 billion." She also said it would be "asinine to think that VLT's will benefit anyone, particularly the average man."
There was no indication Thursday night as to what the Committee of the Whole will do with the information obt
ained at that hearing and another set for Friday night on St. Thomas.
In announcing the hearings last month, Sen. Jones said that a bill co-authored by Sens. Adlah "Foncie" Donastorg and Raymond Richards to repeal the new law legalizing VLT's would be the basis for the hearings. The governor also has submitted a bill to repeal the law, which came into effect when the 24th Legislature in its final meeting, on Dec. 23, overrode Turnbull's third veto in two years of VLT enabling legislation.
Meanwhile, on Feb. 18, Southland asked the Territorial Court to uphold its contract, and three days later, the V.I. Justice Department countersued, asking the court to nullify the contract and order the VLT's in the territory removed.
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