New York Times
The States Bet Bigger on Betting
By ALEX BERENSON
5-18-03

First ... Comment Regarding This Article ...
Texas is currently attempting to legalize video lottery to increase revenues
for the state. So besides offering us a Lotto Texas game that players can't win,
Texas is "truly" attempting to expand gambling in a manner that benefits the state
at our expense ... As stated below ... "video lottery terminals provide almost
NO economic benefit to anyone but their owners and the states."

The article in the Albuquerque Journal is very sad - to say the least.

THE biggest game at the annual World Series of Poker, the no-limit Texas hold 'em
tournament, starts tomorrow at Binion's Horseshoe Hotel and Casino in Las Vegas.
The entry fee is $10,000, and by Friday a winner will take home a top prize expected
to top $2 million.

But while the eyes of poker players are focused on the Horseshoe, the real action in
the luck business this year is taking place in other, less glamorous locales.

States already raise $20 billion annually from lotteries and casinos, more than
4 percent of their total revenue. Now, in capitals from Albany, N.Y., to Springfield, Ill.,
to Salem, Ore., politicians are debating whether to rely even more on gambling to try
to balance their budgets without tax increases or service cuts.

Over the next several years, the result could well be a speeded-up expansion in gambling
nationally, making betting more accessible than ever before, and states and cities more
dependent on the willingness of lower-income people to gamble.

Since 1991, when the current wave of legalization began, the annual amount Americans
lose on all betting, including lotteries, casinos and racetracks, has risen from $27 billion
to $68 billion, according to Christiansen Capital Advisors, an investment bank specializing
in gambling and entertainment.

Americans now spend more on gambling than on movies, videos and DVD's, music
and books combined, and with an annual growth rate of about 9 percent since 1991,
gambling is growing substantially faster than the economy as a whole.

But so far, that growth does not seem to have caused a serious backlash. During the
1990's, opponents of legalization raised the specter of widespread bankruptcies
and broken homes. Those predictions have not come true, however, and
gaming — as the casino industry calls it — has increasingly become a part
of American life.

ESPN2 regularly shows poker tournaments, and "Positively Fifth Street," a book
about the World Series of Poker, is a best seller. Forty-seven states now have
some legalized gambling, and Tennessee, one of the holdouts, is considering
adopting a lottery.

But as states search desperately for more revenue, more of them are turning to
gambling, and specifically to a form of it that aims at people of modest means
and that is particularly harmful to those susceptible to becoming addicted
to gambling, experts say.

Last week, for example, in his plan to bail out New York City,
Gov. George E. Pataki said he would add as many as 4,500 video lottery
terminals to three large Off-Track Betting outlets in the city.

The latest expansion proposals mainly involve video lottery terminals, which are
widely agreed to be among the most addictive forms of gambling, and the least
likely to create jobs in a community or generate other positive economic effects.

But, not coincidentally, video lottery terminals can be taxed at extraordinarily high
rates, meaning that they are extremely efficient revenue collectors from the point of
view of state governments, as opposed to local economies.

In West Virginia, one of the poorest states, video terminals account for 12 percent
of the state government's revenue, said Frank J. Fahrenkopf Jr., president of
the American Gaming Association.

In Las Vegas, money won by casinos is taxed at 6.25 percent, noted Eugene M. Christiansen,
chairman of Christiansen Capital Advisers. On the other hand, in some states, video lottery
terminals are taxed at rates as high as 50 percent.

"The low-tax-rate, big-entertainment resort presents a different face to the community,"
Mr. Christiansen said. "It attracts different kinds of consumers. Storefront video poker
can be much tougher on low-income people." Experts agree that not all forms of
gambling are created equal.

Don Phares, an economist at the University of Missouri-St. Louis, said that, unlike casinos,
which create some jobs and foster businesses that cater to the casino-goers,
video lottery terminals provide almost no economic benefit to anyone but their
owners and the states.

In addition, experts on gambling addiction say that video terminals are especially
dangerous because they offer gamblers a very fast, highly stimulating, rate of play. Faster play
also means that bettors lose more money, because each bet a gambler makes is,
on average, a loser, so more bets translate into larger losses. Inside the gaming industry,
the terminals are sometimes called "video crack."

Making terminals more widely available will almost certainly increase the number
of problem gamblers, at least in the short run, said Dr. Rachel A. Volberg, president
of Gemini Research, which specializes in studies of gambling and problem gambling.
Several recent studies have shown, not surprisingly, that the more legalized
gambling in a state, the more problem gamblers it has, Dr. Volberg said.

But whether those problems will become severe enough to discourage
states from legalizing video terminals is not clear.

Even in states with lots of legalized gambling, no more than 1 percent to 2 percent
of the population is addicted to it, with an additional 2 percent to 3 percent
reporting gambling "problems."

In addition, studies show that the rise in the number of problem gamblers
flattens out after the first few years following legalization, Dr. Volberg said.

"There's a lot of different ways that people sort of move through what I think
of as a gambling career," she said. "Gambling availability, gambling participation
and gambling problem rates don't seem to march in lockstep."

For the moment, the march toward more gambling has stalled. Efforts to legalize
terminals at tracks have failed in several states this year, including Maryland,
although proposals are still alive in others, including Illinois and Pennsylvania.

That fact has heartened opponents of gambling, like Tom Grey, the
executive director of the National Coalition Against Gambling Expansion.
"Our best days are in front of us," he said.

But if the previous decade is any guide, Mr. Grey is wrong. The stock of
International Game Technology, the world's largest maker of slot machines and
video terminals, has risen fivefold since 1997. And by 2012, the company
expects that as many as 10 more states will legalize casinos or video terminals
at racetracks, said Robert McIver, its investor relations officer.

Mr. McIver may well be right, at least in an era when the states are
starving for cash. That's something gambling can be relied on to provide.

"One way or another, it's a tax revenue source," he said.

Albuquerque Journal

Tuesday, May 20, 2003

Cops Knew Investigator Ready to Self-Destruct

By Andy Lenderman
Journal Northern Bureau
Albuquerque Journal

SANTA FE — A Santa Fe lawyer warned police that Attorney General's Office Investigator
Karen Yontz had gambling problems and attempted suicide three weeks before she was
shot by police, the lawyer said Monday.

Laurie A. Knight says Yontz stole her identity and used it to rack up more than $5,700
credit card charges, mostly in the form of cash advances. Knight reported the fraud
allegations to the Santa Fe County Sheriff's Department on April 11, police records show.
Sheriff Greg Solano has said an investigation began May 2, the day Yontz died when
Albuquerque police shot and killed her after she robbed a bank there.

"I am not saying this is an issue of law enforcement protecting their own, in terms
of trying to cover up for her," Knight said Monday. "But I am saying the system
didn't take seriously enough the threat. ... I also don't think they responded quickly
enough." Solano said his office moved on the case within a few days of the report.
"I'm not sure there's anything we could have done to avoid this," he said.
Undersheriff Robert Garcia said the case "was handled like any other."
He confirmed an initial report was handled April 11. He added, "We receive
cases like this all the time. It doesn't necessarily mean that they'll be cleared and
arrested the next day. It's not realistic."

Yontz had gambling debts of $100,000 or more, her husband Jim Yontz has said.
After being cornered by police May 2, she told them they would have to shoot
her and pointed her gun at officers, court records show.

In early April, she mixed six to eight Benadryl pills and whiskey and was
hospitalized, Jim Yontz said Monday. "I don't know if it was a suicide
attempt or a cry for help," he said. Knight said Karen Yontz took Knight's name,
birth date and Social Security number and opened a credit card account with
MBNA America in May 2002.

Knight didn't find out about it until April 9, she says, when the credit card
company contacted her. Knight learned from MBNA fraud investigators that the
card was activated from the Yontzes' telephone number in Edgewood, and
statements were sent to a post office box there, she said.

Knight then called Jim Yontz, a friend she hadn't spoken to for "a couple of years."
Knight said she and Jim Yontz knew each other from legal work. He's a
prosecutor and she's a defense lawyer. "Later that night he called me back and told
me his wife had problems with drugs and gambling and alcohol, and that she had tried
to commit suicide about a week earlier," Knight said.

Knight said she passed these warnings onto the sheriff's department. She also notified
the U.S. Postal Service, which also contacted the U.S. Attorney's Office, she said.
Yontz needed help, she said. "It horrifies me that she committed the last bank robbery
still in her state-issued car, still with her state-issued gun," Knight said.

Knight said she was concerned when she read in news reports that Santa Fe
District Attorney Henry Valdez had been unaware of the credit card investigation.
"I trusted that the process would work," Knight said. "I struggled with feeling somewhat
responsible, even as a victim. I wonder what I could have done differently in terms of
reporting this." Valdez said a case was never presented to his office for review. And it's
not appropriate for him to interfere with police work, he added. "I don't think anybody
saw this at all coming with Karen," he said. Yontz formerly worked as an investigator
for Valdez's office.

"I understand Laurie's concerns," Jim Yontz said. "But at the same time, I've suffered
a loss. I don't see where anything Henry (Valdez) could have done or anything
the sheriff's office could have done may have changed anything."

"It just sounds like it was a white-collar case and it was going to move its
way through the system." Undersheriff Garcia said his detective contacted Karen Yontz
on May 1. She said she would cooperate, Garcia said. On May 2, the detective contacted
the state Attorney General's Office as part of the investigation, he said. The case hadn't
been sent to the district attorney because it wasn't completed yet, Garcia added.

Jim Yontz said he gave a statement to postal inspectors after Knight told him
of the credit card fraud allegations. He also said his late wife "never had a problem
with alcohol and she never had a problem with drugs." Today, Knight is still
sorting through a damaged credit profile, she says.

She's spent hours proving that the charges don't belong to her. Knight says she has
her own personal and business credit cards with MBNA, and uses a secret
password to activate those accounts.

But that didn't stop the fraudulent account from getting a green light.

"What's really scary to me is it points out system failures," she said.