Video poker proceeds continue to rise

Closely mirroring a post-storm jump in Louisiana casino gambling, players are shoving more money into fewer video poker machines at fewer locations in Louisiana than before Hurricane Katrina – and leaving more cash behind.

For the first 11 months of the state’s 2006-07 fiscal year ending June 30, gamblers had lost $632 million while wagering on video poker machines, compared with $625.1 million for the first 11 months of 2005-06 – a year that included the double punch of Katrina and Hurricane Rita that disrupted the business.

In the last year before the storms – 2004-05 – the machines, on which gamblers take their chances with hands of electronically generated cards, took in $535.5 million for the first 11 months.

Over the same time, though, the number of machines in the state has fallen from 14,502 in 2005 to 13,918 in 2007. The number of locations hosting the machines – including bars, restaurants, hotels, off-track betting parlors and truck stops – has dropped from 2,742 in 2005 to the current 2,366. The figures do not include video poker machines in casinos.

A similar trend has been seen in Louisiana’s state-licensed casinos since the storms, according to state police figures. For the first 11 months of 2004-05, those gambling halls took in $2.03 billion. Gamblers lost $2.17 billion for the first 11 months of 2005-06, a figure that increased to $2.36 billion with a month to go in the current fiscal year – despite Louisiana having three fewer casinos than before the storm for most of that time.

Industry observers say the rise in gambling has been at least partially due to an influx of out-of-state hurricane workers with time and money on their hands. Another factor – both with the boom and its recent leveling off – was the wipeout of all casinos on the Mississippi Gulf Coast by Katrina. Since then, 11 casinos have reopened on the coast.

Along with casino interests, the video poker business doesn’t see a boom continuing over the long term amid revived competition.

“I think what you find is that the post-Katrina bump is settling down,” said video poker lobbyist Alton Ashy. “Things are going to stabilize to what they were pre-Katrina and probably stay a bit higher because the economy is better.”

Although the number of locations offering video poker took a plunge after the storms, particularly in southeastern Louisiana, the number of truck stop casinos increased from 155 in 2005 to 171 currently. However, Ashy believes the number of locations probably is close to the maximum that the market can support.

“Most of the activity is people either buying or selling locations,” he said. “There is very little new activity.”

Bars and restaurants can have up to three machines each. Depending upon fuel sales, truck stops can go up to 50 machines. Off-track betting parlors can have an unlimited number of devices. The games are legal in 31 parishes. The other 33 voted them out, effective in 1999, during local-option referendums in 1996.

This year, the Legislature passed bills allowing maximum jackpots to double to $1,000, along with an increase in the maximum video poker wager from $2 to $4. The machines take bets in 25-cent increments. The changes are waiting on Gov. Kathleen Blanco’s signature, which Ashy said he expects.

“We think this might generate some additional income for the locations,” Ashy said.

The horse racing industry, a major force behind the legalization of video poker in 1991 to provide purse supplements for tracks, has been turning to slot machine casinos. Tracks cannot have both slots and video poker. Louisiana Downs at Bossier City, Delta Downs at Vinton and Evangeline Downs at Opelousas have slot casinos and the New Orleans Fair Grounds is expected to have a temporary casino in operation by fall.

Ashy said video poker interests apparently have not been affected much by the track casinos. “In the Vinton area, with Delta Downs, my clients haven’t seen a dip because the track creates more traffic,” Ashy said.

Reece Middleton, executive director of the Louisiana Council on Compulsive Gambling, said slot machines and video poker were responsible for the majority of calls to the group’s help line. Recently, reported problems with slot gambling surpassed video poker – long considered the No. 1 crisis among problem gamblers.

“Those two are still far and away the biggest ones,” Middleton said. With standard casinos, track casinos and truck stops, “We now have quite an availability of slot machine and video poker gambling in this state.”

The council’s help line took 1,238 calls about machine gambling during the 2004-05 fiscal year, followed by 1,134 in 2005-06, a year in which the state was disrupted by the storms. This year, the tally had jumped to 1,283, Middleton said.

“Access, availability and acceptance have an impact on the development of gambling problems because these factors make it more possible to gamble,” he said. “The more people who gamble, the more who will get in trouble.”