Gambling initiative is an assault on free enterprise

Jerry Kopel and David Kopel

Colorado Springs Gazette Telegraph, August 26, 1994

In Colorado, the traditional way to become a millionaire with government assistance is to win the lottery. But motel owner Harvey Blasdel and his buddies may have found a new way - get the government to give you a monopoly on your business. If Colorado voters approve this November, Blasdel may become the first person in Colorado history to become a millionaire thanks to a state constitutional amendment.

At issue is Amendment 13, which will be on the statewide November general election ballot. The proposed amendment legalizes "limited gaming" in Manitou Springs. While Colorado has seen some gambling proposals win (Cripple Creek, Blackhawk and Central City) and others fail, Amendment 13 is unique, because it gives one man and his cronies a complete monopoly on a town's gambling business.

Amendment 13 specifies that "only 10,000 limited gaming devices or tables" will be allowed in Manitou Springs. Of these 10,000 slot machines and blackjack tables, every single one of them will be owned by what Amendment 13 calls "ARPRT, LLC." This mysterious "ARPRT, LLC" happens to be a limited liability holding company owned by Harry Blasdel and his friends, the prime sponsors of Amendment 13.

If the authors of the Colorado Constitution could read Amendment 13, they would turn over in their graves. Provision after provision of the Colorado Constitution was written to prevent the government from giving special assistance to business in general or to particular businesses. The Colorado Constitution specifically prohibits "special legislation . . . granting to any corporation, association, or individual any special or exclusive privilege." (Article V, Section 25). A separate section of the Constitution outlaws any governmental assistance to "any corporation or company." (Article XI, Section 2).

Granting a special gambling monopoly to a particular company obviously violates the intent of the Colorado Constitution that business take care of itself, rather than expecting government handouts or favors.

Blasdel and his fellow monopolists-in-waiting need not worry about the Colorado Constitution, however. First of all, the majority of the Colorado Supreme Court has no interest in actually enforcing the constitutional provisions that prohibit corporate welfare. Ignoring the plain language and historical intent of the constitution, the Colorado Supreme Court in 1991 upheld (by a 4-3 vote) Gov. Roy Romer's plan to shovel money at United Airlines in order to induce the company to build an aircraft maintenance facility. (Fortunately for Colorado taxpayers, United found Indianapolis politicians to be even more willing to buy a "Brooklyn Bridge.")

The second reason that the Manitou monopolists need not worry about the Colorado Constitution is that their proposed monopoly grant is itself a constitutional amendment and so would override any other constitutional provision.

Thus, Amendment 13 will also override a constitutional amendment approved by Colorado voters in 1992. That amendment specifies that gambling will not be allowed in any area unless the people in the area vote in favor of it.

Amendment 13, however, simply exempts itself from the constitutional requirement for popular consent. Manitou Springs will get monopoly gambling whether or not the people of Manitou Springs want it.

While Amendment 13 tramples three separate provisions of the Colorado Constitution, the gambling proposal cannot trump the United States Constitution. Thus, if Colorado Amendment 13 should be enacted, it might face a challenge under the 14th Amendment to the United States Constitution, which requires that states afford all persons "equal protection of the laws."

Giving one company a monopoly to conduct a business obviously violates the plain language of the 14th Amendment. Whether the federal courts would actually enforce the 14th Amendment and declare the Manitou monopoly unconstitutional is more questionable.

Shortly after the 14th Amendment was ratified, the Supreme Court, in the Slaughter-House Cases, let New Orleans give a monopoly to the Crescent City Company to operate a slaughterhouse in a particular section of New Orleans. Many courts today continue to treat business freedoms as essentially unworthy of judicial attention.

So, whether monopoly gambling gets forced on Manitou Springs without its consent will be mostly up to the voters this November. The folks who stand to get rich from a government-created monopoly will probably not focus their advertising on how much money they'll make from monopoly gambling. Instead, the budding monopolists will emphasize their selfless concern with "education" because a large share of the profits from the monopoly setup are supposed to go to education.

Big deal. A rip-off monopoly that gives some of its profits to a good cause is still a rip-off monopoly.

Jerry Kopel was a Democratic state representative from Denver for 22 years. David Kopel is research director of the Independence Institute, a think tank in Golden. 

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