February 11, 2010

THE ROLE OF GAMING INDUSTRY IN NEVADA POLITICS

THE ROLE OF GAMING INDUSTRY IN NEVADA POLITICS

Introduction

            The more than continental stretch of the American domain is given form and character as a federal union on fifty different states whose institutions order the American landscape.  The existence of these stages made possible the emergence of a continental nation where liberty, not despotism, reigns and where self-government is the first principle of order.  The great American republic was born in its states as its very name signifies.  America's first founding was repeated on thirteen separate occasions over 125 years. Most of the American states are larger and better developed than most of the world's nations.  Territorially, Nevada is one of the Union's larger states, but in terms of its population, it is still one of the smallest despite its rapid growth in recent decades (Elliott & Rowley 14).

 

            Nevada, though long considered an artificial entity established to secure Lincoln's majority in 1864 presidential election and subsequently an economic and social appendage of California, nevertheless has come to have its own personality and a distinctive way of life within the American context.  As in the case of each state, Nevada was first given political form and acquired these other characteristics.

            Each state has its own constitution, its own political culture, its own relationship to the federal union and to its sections, all of which give each state its own law and history and for most, the longer such history, the more distinctive the state. The political form of a certain state is affected by different industries within such state and since the gaming industry can be considered as the most dominant industry within Nevada, the main goal of this research is to determine the role that gaming industries play in the political form or functions of Nevada.

           

Nevada Politics

 

            The overall characteristic of the Nevada politics is on individualistic political culture which focuses on the centrality of private concerns. In addition, such culture places a premium on limiting community intervention, whether governmental or nongovernmental—into private activities to the minimum necessary to keep the marketplace in proper working order (Elazar 86, 87). This attitude is most visible nationally in the legalization of prostitution in much of Nevada. The "right of privacy" is important, too, to the average Nevadan, for 63 percent of the electorate voted in 1990 to restrict the legislature from making any changes in the 1973 abortion law. The statute basically concurs with the majority opinion in the Roe v. Wade (1973) decision of the U.S. Supreme Court.

Other features of the individualistic political culture include a "political life based on a system of mutual obligations rooted in personal relationships" and opposition to big government, big business, and big labor (Elazar 88). Personal relationships in Nevada plays important role on the state's political history, legislature, governor, and interest groups,

 

The statement of Elazar that, in an individualistic political culture, "politicians are interested in office as a means of controlling the distribution of favors or rewards of government rather than as a means of exercising governmental power for programmatic ends" and "since political corruption is not unexpected, there is relatively little popular excitement when any is found unless it is of an extraordinary character" describe the Nevada political scene (Elazar, 88-89).  The governor's most important impact on government is the apportionment of expenditures in the executive budget. Likewise, the preferred committee assignments in both houses of the legislature are seats on the money panels.

 

The average Nevadan's belief in an individualistic political culture is extended to belief in the rights of an individual state in its relationship with the federal government. This tenet has been strongly asserted recently in the nuclear waste depository controversy. Armed with polls showing that Nevadans were strongly opposed to a high-level nuclear waste site in the state, two governors and Nevada's entire congressional delegation have battled both the executive and legislative branches of the federal government for over a decade on the issue.

 

Nevada's history illustrates the important role that the federal government has played in the state and the types of questions that arise in a federal system, as can be noted by the following example: The admission of Nevada to the statehood was facilitated by President Lincoln's desire for more support in Congress for his views on issues related to the Civil war. The President believed, correctly that the representation of Nevada would support his views when they took seats in Congress.

 

 Nevada is unique among the states in that its constitution contains what is known as the "paramount allegiance clause," which states, "The paramount allegiance of every citizen is due to the federal government, in the exercise of all its constitutional powers, as the same have been, or may be, defined by the Supreme Court of the United States, and no power exists in the people of this or any other state of the federal union to dissolve their connection therewith, or perform any act tending to impair, subvert, or resist the supreme authority of the government of the United States."

 

This firm stand in favor of national supremacy is best understood in the

Context of the historical period in which it was written. Nevada's fundamental law was drawn up in the midst of the Civil War, and the framers were solidly on the side of the North and Lincoln. With feelings running high in the Nevada Territory against the South, it was not surprising that the constitution contained strong support for the concept of the supremacy of the federal government.

 

Overall, Nevada's fundamental law fits Daniel Eliza's "frame of government pattern" of classification of state constitutions. In this pattern, the "constitutions are frames of government first and foremost. They explicitly reflect the republican and democratic principles dominant in the nation in the late nineteenth century" (Elazar, 21).

 

Nevada's constitution is more than twice as long as the federal Constitution, but it is shorter than the fundamental law of twenty-six states (Book of the States, 20). As of 1995, the Nevada Constitution had been amended 116 times; 75 other proposed amendments had been rejected by the voters at the polls. From 1976 to 1994, inclusive, the Nevada electorate approved 60 percent of the 77 amendments that were proposed, excluding the four amendments proposed by initiative that were approved for the first time in 1994 and will be voted on again in 1996.

During the previous 112 years of the state's history, only 114 amendments had been proposed by the legislature or the initiative process. While recent legislatures have been much more active in proposing amendments, the electorate has not been any more inclined to approve the changes in the state's basic law. From 1878 through 1974, the voters approved approximately the same percentage (61.5) of proposed amendments as in the most recent eighteen-year period.

 

            The main theme of this study of Nevada politics and government has been that the highly individualistic political culture of Nevada has produced a conservative political philosophy in an open society. In addition, sub themes include the effects on the state's political system of the ever-increasing concentration of its population and the "love-hate" relationship with the federal government, which owns and manages 87 percent of the state's land. These concluding observations summarize the effects of these themes and comment on their importance—along with the potential impact of term limits— for the future of the state's politics.

 

Gaming Industries in Nevada

 

Legal casino gambling began in 1931 in Nevada. The actors involved in the casino policy process, and the beliefs and expectations of these actors, have very much evolved out of the history of the casino industry (Thompson 111). The image of casinos was linked for many years to the mob-controlled Las Vegas casinos such as the Flamingo, which was built in 1946 by "Bugsy" Siegel. In 1966, Howard Hughes "was a leading and respected businessman. His entry into Las Vegas and his purchase of several casinos was a watershed event in the transition of the Nevada gaming industry" (Dombrink & Thompson  22). By 1972, major corporate players—including Hilton, Hyatt, and Metro-Goldwyn-Mayer (MGM)—had invested heavily in Nevada and clearly helped to upgrade the image of casinos. Prior to that time, many of the sources of capital for Las Vegas casinos included "questionable" funding such as the Teamsters Central States Pension Fund (Skolnick, 58). The gaming industries in Nevada continuously grow and become an important part of the state's social, economical and political system.

 

Politics and Gaming Industries

           

            In Nevada, gaming was legalized in 1931.  And since its legalization, gaming industries has been able to influence different aspects, specifically the political aspects of the Nevadans. Part of the political form of Nevada is their legislators. Nevada prefer citizen legislature that meets in regular session for about six months during odd-numbered years (Bybee & Mayer 59). Thus, members have occupation which enable them the flexibility to be away for the lengths of the legislative sessions. In these legislators, agents from gaming industries are included or involved. These interest groups from gaming industry have tremendous influence in the political system of Nevada.

 

During the early years, Nevada politics was dominated by the mining and railroad interests; during the next fifty years, the most influential interests were those connected with the Wingfield, McCarran, and Biltz-Cord machines, which exercised considerable political clout because of the effectiveness of lobbyist John Mueller. In the 1960s, the gaming industry began to operate more responsibly and became the dominant interest group. Then, in the late 1980s and early 1990s, the influence of the Nevada State Education Association (NSEA) with both Governor Bob Miller and the legislature allowed the NSEA to challenge gaming for the position of the most powerful group.

 

One of the roles that gaming industries played in Nevada's politics is in terms of aiding political campaigns. The old adage that "money is the mother's milk" of politics has been true in Nevada from the days of the "bag men" who bought elections to the present, when large campaign donations from the gaming industry guarantee generally favorable treatment in the legislature. A "sting" operation in the mid-1980s did result in one Nevada legislator serving time in federal prison, but other politicians who accepted campaign donations from reputed mobsters in the gaming industry have been able to survive.

 

            Financial contributions to political campaigns are used by interest groups to gain access and influence at all levels of American politics. In Nevada, the gaming industry has been the major player in making contributions. In some gubernatorial campaigns, gaming has contributed more than half of the funds expended by the candidates. It is common practice for the major hotel casinos to contribute to both major party candidates in such elections, although the amounts will vary. Gaming also contributes heavily to the campaigns of key legislators.

 

In a survey of members of the 1983 legislature, the interest groups rated "most influential" were two gaming industry groups. The Nevada Resort Association, which represented the large hotel-casinos in Clark County at the time, was ranked first, with the Gaming Industry Association, representing northern Nevada casinos, being a close second (Driggs, 1988). Not surprisingly, the three lobbyists who were considered "most effective" by the legislators during the session— Jim Joyce, Harvey Whittemore, and Sam McMullen—all represented gaming interests.

 

            In the 1993 sessions, the gaming industry was the second most influential group at the 1993 session. Jim Joyce died during the 1993 session, and Harvey Whittemore, a member of the powerful Lionel, Sawyer, and Collins law firm, assumed the mantle of the most effective lobbyist at the 1993 and 1995 sessions. During the 1995 session, Whittemore and Richard Bunker, another gaming lobbyist, were informal advisers to Governor Miller and helped him in the legislature. 

           

            Further, in 1995, gaming profits hit all-time highs in terms of financial stability but, ominously, so did the influence of gamers in Carson City. The increased economic power of the Nevada casino or gaming industry and the rising tide of fiscal conservatism which in 1994 awarded republicans, who were heavily supported by the gaming control the state senate and a tie in the assembly, bodes ill for the public sector. These two factors are related, because in the past few years Nevada and especially Las Vegas casino interests have shifted their campaign contributions in the direction of Republican candidates for the state senate and assembly. They also have rewarded pliable Democrats such as Governor Bob Miller.

 

The recent growth of Nevada's gaming power and the Republicans' influence has dramatically strengthened the political economy of gambling. In the 1990s, more than at any other time in the state's modern history, the casino elite exerted a strong influence, if not control, over many lawmakers in Carson City. Nevada's chief executive was another reason for this. Although a professed Democrat, Miller came from a "well-connected" gaming family in Las Vegas, and enjoyed political support from nearly every major casino owner in the state. Not surprisingly, he saw many issues their way.

 

A clear barometer of that support was evident in 1994 when Steve Wynn openly supported Miller over Las Vegas Mayor Jan Laverty Jones in Nevada's Democratic gubernatorial primary. In the 1990s, Wynn became a political force to be reckoned with. He strongly encouraged voter registration among his thousands of employees, openly communicated his political concerns to them, and contributed heavily to pro-gaming candidates. As the local political consultant Don Williams recently observed, "[W]hen Steve Wynn picks up the telephone, most politicians jump. He doesn't get everything he wants, but he rarely loses. "

 

Governor Miller has been a prime beneficiary of Wynn's largesse. Thirteen of the fifteen top contributors to Miller's 1994 reelection campaign were gaming companies or their top executives. Wynn alone gave $70,000, exploiting a loophole in the state law limiting any corporation's gift to $20,000 by spreading separate donations across four subsidiaries, a move that drew the ire of Common Cause in Nevada. Miller also received thousands of dollars from two major slot and video poker machine manufacturers, Bally's and International Game Technology (IGT). Another major contributor was Barrick Gold, the state's largest gold mining company.

 

The political economy of gambling is alive and well not only in Nevada's executive mansion but in the state legislature (especially the Republican State Senate), both houses of which are dominated numerically by Las Vegas area politicians. During the 1995 session, the casino industry, led by two Republican state senators, Sue Lowden of Las Vegas and Reno's Bill Raggio, led the fight against any tax increases.

 

Lowden, the wife of the then prominent Las Vegas casino owner Paul Lowden (who, at the time of her election in 1992, owned the Sahara and Hacienda hotels on the Strip, as well as two others), became chair of the Senate Taxation Committee in 1995 with the support of Majority Leader Raggio (who, incidentally, was a member of Paul Lowden's board of directors). This marked the first time in Nevada history that a major casino executive (and practically a co-owner) had chaired the committee that decided the state's gaming and mining taxes—a dangerous precedent largely ignored by the state's print and electronic media.

 

            In addition, the gaming industry has been considered as one of the notable interest group in the Senatorial race in Nevada.  Herein, gaming interest play a vital part to both candidates and parties. The gaming interest who plays part in the 1998 senatorial race have devoted large amount of their resources (Anonymous, 1) in order to defeat a Californian initiative which would allow Las Vegas style casino gambling on Californian Native American reservations.

 

            This contribution has continued until the twentieth century. In 2002, the gaming industries have been able to contribute more than $14.4 million for political campaigns.  It is noted that the most essential context about gaming or involving money in politics is its pureness.  Such context flow without pretext or alleged reasons and there is not interest in influencing the results.  The gaming industries see giving money as an investment in terms of politicians (Smith 1).

 

            Another important role of gaming industry in the political system of Nevada is in terms of hiring the top lobbyists to make gaming cases in the legislature. Since, gaming industries continue to become economically stable, these industries are also trying to secure their place as the most influential group, hence, hiring the top lobbyist ensures gaming industries to gain competitive advantage. Lobbyists are individual who represents variety of interests, including gambling.

 

Lobbyists use many techniques to influence legislators. In 1971 Faun Dixon conducted a survey of legislators and lobbyists as to what they considered the most effective techniques. The two groups agreed that the four most important techniques were personal presentation of arguments, presenting research results, testifying at hearings, and contact by a constituent (Montara 48). These techniques would still be ranked highly in the 1990s, with perhaps the addition of "contributing work in a political campaign" to the list.

 

Joseph Crowley, who has testified at nine legislative sessions as president of the University of Nevada, Reno, has listed the following words as being important guidelines to effective lobbying: preparation, persistence, patience, credibility, and access. As most legislators would quickly point out, lobbyists play a vital role in the legislative process. Just as in the case of the individual legislator, an individual lobbyist cannot be effective unless his or her word can be trusted.

 

Conclusion

           

            It can be said that Nevada does have more open society and political system than other states.  Its political system has generally been conservative. Modern conservatism includes belief in the importance of family, an emphasis on property rights, a limited role for government, low taxation and skepticism about innovation.  Although gaming do not set well with some conservatives, they are still considered as a part of Nevada's tradition and do conform to the libertarian view of individual freedom. Economic and political aspects were mainly responsible for the legalization of gaming industries.

             

The legality of gaming industries in Nevada has become a very important factor why these industries can be considered as influential in different aspects of the state.  Aside from the economic growth and stability, gaming industries also plays an important role in the political system of Nevada.  The major function of gaming industries in terms of politics is in terms of giving financial assistance to candidates and parties who will run in the legislative position.  Because, gaming industries are the most profitable industry within the state, they have enough financial resources to help a candidate that they want to support in an election.

 

            Although, Nevada is more concerned about taxing gaming too much and driving an important segment of it out of business, what is perhaps more essential is the notion that gaming industry continues to play a vital role in the campaigns of gubernatorial and legislative candidates.  In addition, the gaming industry also has the funds to hire top lobbyists to make it case at the legislature. All in all, the financial assistance of gaming industries can be considered as the key factor why it becomes influential in the politics of Nevada.

 

Reference

Anonymous. Profile of Nevada Senate, Online available at [http://csed.byu.edu/Publications/Outside%20Money/NevadaSenate.pdf].  Accessed on [12/04/2006].

 

Book of the States, 1992-93. Lexingtonky: Council of State Governments, 1990, p.20

 

Bybee, S.L., & Mayer, K. Gaming's Impact upon a Local Economy: Greenville, Mississippi. Las Vegas: University of Nevada International Gaming Institute, 1998.

 

Driggs, Don W. "The 1974 Election in Nevada", NAPR April 1976.

 

 

Dombrink, J., & Thompson, W. The Last Resort: Success and Failure in Campaigns for Casinos. Reno, NV: University of Nevada Press, 1990.  

 

 

Elazar, Daniel J.  American Federalism: A View from the States, 2d Ed.  New York: Crowell, 1972.

 

Elazar, Daniel J. "The Principles and traditions Underlying American State Constitutions, Publius: The Journal of Federalism 12 (winter 1982), p. 21.

 

Elliott, Russell R. and Rowley, William D, History of Nevada, 2d ed. Lincoln: University of Nebraska Press, 1987.

 

Mortara, Faun. "Lobbying in Nevada", in Bushnell, Sagebrush and Neon, pp.41-57.

 

Skolnick, J.H. House of Cards: The Legalization and Control of Casino Gambling. Boston: Little, Brown, & Company, 1978.

 

Smith, R. Gaming Contributions: Political Gamble. Las Vegas Review Journal, 2003.

 

Thompson, W. Gambling in America: An Encyclopedia of History, Issues, and Society. Santa Barbara, CA: ABC-CLIO, 2001.


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