Has European Gambling Commissions Gone Too Tough On Legal Online Gambling?

By Colin Tiernan Times-News

Jackpot

The eeriest part was how it snuffed out the lights.

“You don’t realize how much those lights really fill up the night sky,” Fatima Aguilar said.

Twenty-five-year-old Aguilar has always lived in Jackpot, Nevada. She started working at Cactus Petes as a cocktail server when she was 17. For almost every night of her life, the gambling town has been a small oasis of brightness in the middle-of-nowhere.

March 17 was a slow night at Cactus Petes, but Jackpot was still lit up and loud. At work, Aguilar carried trays of drinks with one arm, walking across the casino floor through a thin haze of smoke; past blackjack tables and rows of dinging neon slot machines.

Then, at midnight, Nevada closed all its casinos. Aguilar went home early, and the town went dark. She figured she’d be back in a couple of weeks. She hasn’t been back to work since.

The lights came back on when the casinos reopened in early June, but residents say the town has changed. It’s quiet.

Town leaders say they’re worried the pandemic’s impact on gaming could cripple the community. More than a dozen families have moved away from town to find jobs. In search of a solution, the town’s fighting harder than ever to land a marijuana dispensary. And bring it fast. Pot could bring jobs, tax revenue and desperately needed visitors.

“We need something now,” Jackpot Advisory Board member Monica Burt said. “We cannot wait until next year or two years.”

Gambling on gambling

In some ways, Jackpot’s pandemic experience mirrors that of many Magic Valley communities. The “ghost town” vibe that residents say spooked them in March and April — that vibe was present in much of Idaho’s Magic Valley, too, although it didn’t last as long.

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Burt said Jackpot was so quiet early on in the pandemic it was “creepy.” She stepped outside in March and noticed there wasn’t any bird song coming from the desert to break the silence.

Some Magic Valley towns were quiet, too. But in more ways, Jackpot has been hammered much harder by COVID-19.

Casinos — mostly Cactus Petes and Barton’s Club 93 — essentially make up Jackpot’s entire economy. They employ the vast majority (some estimate 85% or higher) of the town’s working adults. Many work multiple jobs at multiple casinos.

When the casinos closed, Aguilar and nearly everyone else lost their jobs. Residents say it’s likely that at bare minimum 80% of the town was unemployed between March and June. In the Magic Valley, where the economy is largely agriculture-based, most counties’ pandemic unemployment rates topped out in the 11% range. When casinos hurt, Jackpot hurts.

Jackpot didn’t have a food bank before the pandemic. The town scrambled to create one, and it’s been helping feed about 40 families — 89 people. That’s roughly a tenth of Jackpot’s population.

A lot of people in town struggled to get through to the Nevada unemployment office for benefits.

“I had to wait two weeks before I could get through on the phone,” Aguilar said, adding that she and her family worked together. “We’re using five different cellphones and we’re just calling, calling and calling. ... You’re doing that for at least two, three hours, seeing if you can get it.”

Aguilar changed her sleep schedule — normally she’d get off work at 2 a.m. and go to bed at 6 a.m. — so she could wake up early to make daily phone calls.

Residents coordinated on Facebook — when calls got dropped all at once they’d let everyone in town know to call immediately, to be first in the queue. When one person got through she might message her friends and they’d all try to get help while on a merged phone call.

It took a few months for Aguilar to get any unemployment payments. Paying bills was difficult.

“I wasn’t ready for it at all,” she said. “I didn’t have any emergency savings besides my 401(k). Luckily our company let us take out loans.”

Many Jackpot residents went months without getting unemployment money.

The casinos have reopened, and most residents have gone back to work — or at least got one of their jobs back. But not all.

“We know a lot of people who didn’t go back to work,” Four Jacks Casino co-owner Eldy Jack said. (The Four Jacks has been closed the past year due to fire damage, but Jack said the plan is to reopen in December.)

Jackpot’s precarious position hasn’t changed. The town’s as reliant on gaming as ever. And yet, the pandemic presents brick-and-mortar gaming with daunting challenges.

Business is down dramatically since the casinos reopened. Even if it wasn’t, the pandemic cost casinos billions. According to the American Gaming Association, nationwide gaming revenues fell 79% in the second quarter of 2020 compared to the previous year. The third quarter could be down compared to last year as well.

Nevada casinos can’t run at full capacity right now, for state-mandated safety reasons. For instance, gamblers can only use every other slot machine, and there are restrictions on the number of card players per table. Plus, casinos can’t have any big, in-person events.

Hard times on Highway 93

Even before the pandemic, the last decade hasn’t been especially kind to Jackpot. The Great Recession in 2008 was a severe blow to the entire gaming industry. People haven’t been gambling like they used to before the stock market collapse.

“(Gaming) was just starting to get back to pre-great recession levels,” said Bo Bernhard, CEO of the International Gaming Institute at the University of Nevada, Las Vegas.

Aguilar said she saw the decline in gamblers with her own eyes.

“Over the years it was less and less and less and less,” she said.

The town’s population dropped after the recession, too. The last U.S. Census Count in 2010 put Jackpot’s population at more than 1,200. Before the pandemic, that had fallen down in the 900 range, and Jackpot Public Works Superintendent Shawn Burt said since March about 20 families have left town, mainly for Twin Falls and Elko. Jackpot Fire Chief Brian Hugill said he’s lost eight of his volunteer firemen — that’s almost half the department.

The community has tried to attract new businesses, to diversify the economy. At times, it looked like the efforts would pay off. There was a new gas station coming next to Cactus Petes that would have replaced the abandoned, ramshackle building there now. Someone planned to build a dollar store.

“We’ve been trying to get people in here,” Monica Burt said. “But I think (businesses) are uncertain about how Jackpot’s going to go, so they’re a little bit nervous.”

Dotty’s is still building a slots-only casino on the north side of town. That will be a nice addition, residents say, but it doesn’t diversify the economy.

Lighting up?

The most lucrative, plausible new business possibility for Jackpot is probably a marijuana dispensary. It could be built quickly, employ a few dozen people and generate significant tax revenue. Nevada taxes marijuana much more heavily than, say, a coffee shop, and a cut of the extra tax money would go to Jackpot.

Some people in Jackpot have wanted to bring a dispensary to town since Nevada legalized recreational marijuana in 2016. There have been businessmen eager to open a dispensary, and there aren’t any state-level legal prohibitions to hurdle.

Until this week, Elko County had largely taken an anti-marijuana stance. Even though the state has legalized pot, the county hasn’t been eager to allow sales.

If Jackpot was an official city, the county’s feelings wouldn’t matter as much — a dispensary recently opened in West Wendover, on Elko County’s eastern border with Utah.

But Jackpot is not an official city. As an unincorporated community, it technically doesn’t govern itself. It has an advisory board, but that board doesn’t have the same authority that a city council would have. Also, Nevada only allows Elko County two dispensary licenses, and the county gets to decide which town gets them.

Jackpot Advisory Board members have explained the town’s plight at recent Elko County Commission meetings, and commissioners this week approved the first reading of an ordinance to allow a dispensary there.

A year ago, many in Jackpot had mixed feelings about marijuana sales in town. Plenty were on the fence; some were opposed.

“I personally don’t like marijuana,” Four Jacks Casino co-owner Derrick Jack said. “But at this point, really, what other options do you have? At this point, we’re willing to try anything.”

Jackpot Advisory Board chairwoman Teresa Hugill said getting a dispensary is a necessity. It would provide tax revenue, jobs, business diversification. On top of that, it would bring visitors, who in turn might do some gambling.

“If we can’t even try to get this lifted, we’re in trouble,” Hugill said at a July Advisory Board meeting, “and all we have left is two casinos.”

That sentiment is widespread.

“We’re dying right now,” resident Zack Wood said at the meeting. “We really do need this.”

High stakes

Regardless of how quickly gaming bounces back, it could be permanently changed. More gamblers have been moving to esports and online betting.

“Playing games, and specifically most often on your phone, has shot through the roof due to COVID-19,” Bernhard said.

Big casinos have been working on building their online presences. The shift toward online gaming could affect brick-and-mortar casinos. It’s tough to tell who will capitalize on the shift, and how much.

“That’s a billion-dollar question,” Bernhard said.

Dispensary or not, some people in town are still struggling. Aguilar doesn’t think she’ll get her Cactus Petes job back. She misses it.

She’s been making some money as a licensed cosmetologist, seeing clients in Twin Falls. It’s not enough to pay all the bills, though. Her friend got her another job, but it won’t start until the harvests begin in September. She says it’s stressful not having a full-time job.

“I’m still waiting on my stimulus check,” Aguilar said with a nervous laugh. “Hopefully it’ll come in time and I can pay my bills for the month. If not, I don’t know what I’m going to do.”

Editor’s note: The Times-News reached out to Cactus Petes, which deferred questions to its parent company, Penn National Gaming. Penn National did not respond to the Times-News‘ requests for comment. The Times-News was unable to reach Barton’s Club 93 ownership for comment in time for this story.

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