Vegas in the Rockies? Colorado's casino towns get ready for higher betting limits
Sunday 10th January 2021
Elected leaders in Black Hawk, Central City and Cripple Creek have voted to lift wager caps, open the door for new games, as allowed by recently passed Amendment 77
"Las Vegas-style gaming," that's what the city of Black Hawk says is coming to town this spring after Colorado voters approved Amendment 77 in November.
The amendment grants powers to voters in the state's three gambling towns -- Black Hawk, Central City and Cripple Creek -- to increase bet limits beyond the state's previous constitutionally mandated cap of $100 and approve new games, assuming those games are allowed by the state's Limited Gaming Control Commission.
The Black Hawk City Council wasted little time following through, voting on Dec. 1 to approve unlimited single-bet wagers and allowing casinos in the city to offer baccarat, keno, pai gow poker, and a number of other games pending state rulemaking. The changes will take effect as soon as allowed, May 1, per Amendment 77's ballot language.
"Soon, Coloradans won't have to hop on a plane to satisfy their appetite for Las Vegas-style gaming," a city news release put out that day proclaimed.
The changes put Colorado on a more level playing field with other states with legal gambling. Bet limits only existed in Colorado and, at a much higher level, in South Dakota prior the vote, according to Jessica Feil of the American Gaming Association.
And while the state's gambling towns are moving quickly to embrace the new freedom -- leaders in both Central City and Cripple Creek have followed Black Hawk, passing measures in recent weeks to lift bet limits and allow new games -- some casino managers and elected officials are pumping the breaks on just how big an impact Amendment 77 will have on those communities.
In other words, don't expect Colorado 119 to transform into the Vegas Strip.
"This is not a game changer for us," Sean Demeule, general manager of the Ameristar Casino Resort and Spa in Black Hawk, one of the state's largest casinos said this week. "When I say it's not a game changer I mean I don't expect it to grow revenue by hundreds of millions of dollars every year. It just allows us to have some parity with neighboring states."
But there are obvious advantages in not having to mount a campaign to amend the state constitution every time casinos want to add a new kind of felt-topped table or spinning wheel to their floors. It took the passage of Amendment 50 in 2008 to increase bet limits in the state to $100 from $5, add roulette and craps to the slate of permitted games and allow casinos to stay open 24 hours.
"To allow the local government and the local voters to kind of control the offerings allows us to react to industry trends more quickly and allows us to offer games that are available in other casinos around the country," said Demeule, who is also the secretary-treasurer of the Colorado Gaming Association.
Bacarrat is one game in particular Colorado casinos have been clamoring to add to their floors. The fast-paced, two-card game, a favorite of James Bond, is expected to be among the first added once the gaming commission considers a list of new games at an upcoming meeting.
When it comes to the rulemaking the state has to go through, department of revenue spokeswoman Suzanne Karrer said last month that largely has to do with cleaning up language, removing references in state rules to $100 bet limits that will no longer be in effect come May.
It won't be a total free-for-all. Dan Hartman, director of the Colorado Division of Gaming, has made it clear that "new games must be submitted to the commission for approval," Karrer said.
"Vegas-style" gaming is sure to appeal to at least some Coloradans, particularly those in the metro area, according to outgoing Gilpin County commissioner Ron Engels. Gilpin county is home to both Black Hawk and neighboring Central City.
"Denver is the second-largest feeder market for Las Vegas and the (casino) operators who are going to be extending their limit or removing them are certainly hoping some of those people stay here," Engels said. "But we're are also hoping that people will make this a primary destination as well, coming from elsewhere in the country to visit our mountain community."
Engels is wary of potential negative impacts of the county becoming more of a national or even international destination. He noted before Black Hawk and Central City became gambling towns, Gilpin county had a four-room jail. As of last month, the justice center was housing somewhere in the neighborhood of 75 to 80 inmates, and 85% of all jail activity was "gaming-related," he said.
"If (Amendment 77) adds impacts there, we might be at a $10 to $15 million expansion to our justice center," he said.
But Engels is hopeful the negative impacts will be minimal and he and other Gilpin County leaders "understand very clearly that it will improve our finances. Our portion of the tax distribution will be increasing as the market grows."
In the state's 2020 election voter guide, the fiscal analysis of Amendment 77 said the measure "will likely increase state and local revenue," noting that Amendment 50 resulted in a roughly $10 million increase in annual gambling tax income across the state.
Amendment 77 sticks with existing state gambling laws dedicating 78% of all tax revenue to community colleges.
The appeal of unlimited bet amounts is limited by just how much risk the average person is willing to take. Lifting bet limits doesn't mean $5,000-a-hand blackjack tables are going to be replacing the $25-a-hand ones.
Ameristar is owned by Penn National Gaming Inc., which has properties in more than 20 states, Demeule said. While most people don't want to gamble at the level reserved for high-stakes enthusiasts known as "whales" in casino parlance, Demeule is confident Penn has clients around the country who will now consider Colorado when bet limits may have kept them away before.
"We have a great product here in Colorado," he said.
Central City mayor Jeremy Fey knows that as gross wagers rise profits rise and that for him hits at what he hopes will be the key benefit for his community: attracting new operators to a town with 60% commercial vacancy rate.
Central City and Black Hawk border one another but they have taken drastically different approaches to being gambling towns. Casino operators can't build anything over four stories in Central City, Fey notes. Meanwhile, Black Hawk is home to the Ameristar tower and its 536 hotel rooms, the expanding Monarch Casino Resort Spa and other big-time properties.
But Fey supported the legislation as a tool of economic development anyway and after a recent sale of a historic building that has sat vacant for decades, he feels the future is bright.
"I never thought that some of our mom-and-pop casinos will be hosting the whales of America. They're welcome here. I'll have them over for dinner," Fey joked. "But (Amendment 77) was more important in enticing new operators to the market. I'm not sure the average person walking the street anticipated that effect, but I'm optimistic about those effects."
By the time the amendment takes effect in May, it's hard to tell what the situation will be when it comes to the COVID-19 pandemic. Despite the county being moved to Level Orange on the state's color-coded coronavirus restriction dial this week allowing casinos to seat people inside of their on-site restaurants, Gilpin County was still enforcing its own rules shutting down all table games. Even with the vaccine being rolled out as bet limits are rolled back, Demeule isn't counting on Amendment 77 undoing the damage done by a year of steep declines in visits and stays.
"I don't know that we'll ever make back fully what we lost in 2020," he said.