House Judiciary Committee, the end result of which was a hearing that completely distorted the issues raised by the legislation.

As my colleague, Senator Reid, points out, it is pretty hard on the face of it to object to a study, whether it is gaming or anything else. But unfortunately, with all due respect to my colleagues who support this legislation, their motives go well beyond just a study of the issue. They have reached a conclusion that gaming is wrong and they are opposed to the spread of gaming.

While Nevada, with its strong commitment to proper and thorough regulation, has made itself one of the premier tourist and entertainment destinations in the world through its gaming industry, I will be the first to point out that gaming is not for every city. It is not for every county. It is not for every State. I do not appear here today as an advocate for the expansion of gaming to other jurisdictions. Those are decisions that ought to be made, in my judgment, at the State or local level.

It is clear to me that the agenda of the sponsors of this legislation, as I have said, go beyond just the study itself. One of the legislation's most vociferous supporters who appeared here earlier, Congressman Wolf, has gone so far as asserting that gaming is, and I quote, "destroying the American family". Whatever one's view of gaming may be, such a broad, pejorative generalization is simply not true and, in my view, does not contribute to a reasonable debate on the issue before us.

Given the predisposition of the legislation's sponsors, I have very little hope that the industry would receive a fair and objective study. Mr. Chairman, let us, as we say in Nevada, put all the cards on the table. The sponsors of the legislation before the Committee today oppose gaming, as is their right. They would like to see the spread of gaming stopped and existing gaming operations either cut back or severely curtailed. They believe that gaming is morally wrong and that it is the Federal Government's role to step in and protect everyone from, as they view it, this vice.

The legislation before the Committee today is the first step in their effort to create, I fear, a new Federal bureaucracy which would be intrusive in terms of its regulation and intrusive in terms of its policy impact on State and local government.

Perhaps, I think, Mr. Chairman and Members of this Committee, more disturbing to me is the underlying assumption of this legislation, that the Federal Government has some role, some unique ability to evaluate and make recommendations as to appropriate policy making that the States themselves should make. While I do not subscribe to all of the positions taken by States' rights advocates, I do agree that there are many matters, particularly those relating to essentially moral questions, that are best decided at the State or local level.

There is a certain arrogance to the assumption that the Federal Government is the font of all knowledge and should be called upon to provide a one-size-fits-all evaluation of the merits of gaming for a particular community. I have spent most of my public service at the State level, first in the State legislature, then as attorney general, then as governor. We dealt with a wide variety of issues. Gaming was, of course, one of them. Not once do I remember it oc

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curring to us that the Federal Government needed to be consulted for its opinion on what we considered essentially local matters.

I think it is interesting to point out that this effort to create a national commission is being pushed by Members of Congress, not the Nation's mayors, not State legislators, and not State governors. In fact, voters and State legislatures have proven more than capable in making their own decisions regarding gaming.

There is no doubt that gaming has spread to a number of new jurisdictions in recent years. Voters in many of those States, however, have rejected numerous ballot questions and referendums. Let us just take November 1994, the previous election. Voters in Florida rejected casino gaming. In Iowa, Pope County voters turned down a referendum proposal to loosen controls on riverboat gaming. In Massachusetts, two communities, Springfield and Agawam, both rejected casino ballot propositions, and Rhode Island voters rejected 11 ballot questions involving casinos. The Navajo Indian Nation, covering enormous parts of the Southwest, rejected a casino referendum proposal.

The point that I make is both the history and the current practice tells us that States and local entities are capable of making decisions themselves as whether to permit gaming.

Just as a national debate is occurring redefining the roles of State and Federal Government, it seems strangely incongruous that there is now a movement and new initiative to get the Federal Government more involved in an area which, in my judgment, as you point out, Mr. Chairman, is properly an area for State and local government.

The issue of a study is obviously sensitive for us, Mr. Chairman. Nevada has worked long and hard and has invested enormous resources in creating an industry and an accompanying regulatory structure that stands as a worldwide model for the gaming industry. We have proved that State regulation of gaming can work and we have nothing to hide.

The legislation before this Committee today, however, makes me very uneasy. We only have to look at what happened in the hearing on this subject in the House Judiciary Committee, where an exgangster under the Federal witness protection program was brought in by the Committee as a surprise, secret witness. As an illegal bookmaker, this individual's testimony had absolutely no relevance, none whatsoever, to the subject of the spread of legal gaming. Nevertheless, his presence at the hearing eliminated any possibility of an objective analysis of the legislation before the Committee.

Mr. Chairman, I am convinced that this is simply not an effort to create an objective commission. I believe that the proponents, sincere as they are, have already reached their conclusion. Moreover, the Christian coalition and other religious conservative groups have identified gaming as a religious issue. In fact, Mr. Grey, one of the witnesses who will be testifying later this morning, receives financial support from such a group.

The sponsors of this legislation clearly intend to use this commission to carry forward their national anti-gaming agenda, a prospect which could, in the end, create a threat to a legitimate industry which is absolutely essential to the economy of Nevada.

Mr. Chairman, I urge this Committee reject the commission as being unnecessary and redundant, and I thank the Chair and the Members of the Committee.

Chairman STEVENS. Thank you, Senator. Congressman Ensign.

TESTIMONY OF HON. JOHN ENSIGN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEVADA

Mr. ENSIGN. Thank you, Mr. Chairman, and thank you for holding these hearings in the manner that you are holding these hearings.

I would like to make a couple of opening remarks about what has been said this morning. First of all, some of the remarks have been said about the ills of gambling and the gaming industry, spreading to new locations. Just a personal observation.

I think that State lotteries are the worst and most insidious form of gambling that there is. It is State sponsored. It goes after the poor. In casinos, you see all classes, income levels of people. You see poor, you see middle class, and you see the very wealthy in casinos. In lotteries, you see virtually only the very, very poor that play lotteries. This is State sponsored.

The billboards that were mentioned, "Your chance to get out", the part about getting people to not have the work ethic and getting ahead by their own hard work, that is all State-sponsored attacks on that through the advertising that State lotteries do, and I would be the first one to say that that is wrong. However, that is still the State's responsibility and the State's right to do that if they choose to do it.

I believe that it is wrong for a State to do that, but it is still that State's option and right to choose or not to choose to do that, and I would be the last one that would say that we should usurp the States' rights under the guise of some sort of far-reaching Federal authority that people in Congress seem to do and ignoring the Tenth Amendment to say that we should outlaw State lotteries.

Also, I think that some of the comments that Senator Brown and the question that Senator Brown alluded to on, do you think that this could lead to further legislation? I thought it was a very telling question, and especially the way that he asked it in that he seemed to be in favor of further legislation that would curtail gaming, that even though the Constitution would maybe preclude us from doing some of the things specifically, that indirectly we could go around the Constitution and end up basically with the same thing as doing it out front, which would be in violation of the Tenth Amendment. That is what we are afraid of. We are afraid that this Congress will go beyond the bounds of the Constitution, will go and say to the State of Nevada or to any other State that you do not have the right to regulate your own gaming industry. We are not only going to regulate it now but we are going to tax it, and that is what the people in the State of Nevada are afraid of the most.

As far as the spread of gambling, my parents are in the gaming industry. My father started out in the early 1960's, and so did my mother, carrying in change for making change at slot machines. My dad is now the Chief Operating Officer for Circus Circus and basically has lived the American dream, worked 70 to 80 hours a week

and became very, very successful in the efforts that he made over the years.

The casino industry itself has become a legitimate industry. The people like Senator Reid in the State of Nevada have eliminated organized crime from the previous influences that it used to have upon the gaming industry. Some of these States are not doing as good of a job, which I think that some people have alluded to, including the State of Louisiana.

When I was working for my father for a couple of years, I went down to the State of Louisiana and my comments to him were, stay away from this State. It is not good. It is going to be bad for the gaming industry.

There are things that we need to do from the State of Nevada's perspective to keep the gaming industry's reputation clean, because it is a legitimate industry when done properly.

Let me address some of the other points that people have talked about, about addictive gambling. Addictive gambling is bad for the gaming itself. That is not what the industry is after. The industry is after entertainment dollars, the same as any other industry is after entertainment dollars, the same as Disney World is after. It is something that you are going to spend $200, $300 a day on your vacation. Part of that is going to be gaming dollars.

You have seen the focus of Las Vegas and of Nevada change in that not only do you have an experience in front of a slot machine or at a blackjack table but you also have a more complete experience in the State of Nevada. These are healthy. These are what the industry and the private market is doing within the industry.

There are very many things that can be done to improve the industry, there is no question about it. I think the industry needs to attack addictive gambling much more aggressively, similar to what the beer industry has done for problem drinking and driving. I think that the ads that they have run-I have encouraged the industry to start running those ads for addictive gambling and I think the Promus, the Harris clubs, have been doing a very effective job and a very proactive job at trying to attack some of those. But having said some of the ills about the gaming industry, having said some of the ills about State lotteries, the bottom line is that a study like this can go and take the powers of this Congress beyond what it is intended to do, and I appreciate the spirit with which, Mr. Stevens, you uphold the Constitution and the Tenth Amendment and the illustration that you used on the ice pool. I think that is very illustrative of what you should not be doing, the Federal Government be getting into that.

But what Senator Brown talked about, about indirectly getting rid of that ice pool, to me is just as wrong for this Congress to be doing as doing it directly, a frontal attack, either legislation through regulation or legislation through taxation. Thank you, Mr. Chairman.

[The prepared statement of Mr. Ensign follows:]

PREPARED STATEMENT OF CONGRESSMAN JOHN ENSIGN

Mr. Chairman. I believe the State of Nevada's experience and record in the gaming industry speaks for itself so my message today will be very simple and brief.

The citizens of my State are proud and appreciative of the contributions that have been made by the casino industry to both the economic and social welfare of our communities.

I come from a gaming family myself. Most Nevadans depend upon the gaming industry for their livelihoods either directly or indirectly. My family is no exception. My dad is the perfect example of one who started as a change maker, and worked his way up to a CEO in the gaming casino. He is like many other Americans who worked long, and hard, and picked himself up by his own bootstraps.

Contrary to much of the dialogue that will undoubtedly take place in these hearings, the Nevada gaming industry works hand-in-hand with local and State authorities for the benefit of all citizens.

The Nevada gaming business is regulated not simply by a State government dictating terms under which an industry operates. Instead, there is a true partnership and spirit of cooperation between industry and government. Has it succeeded? Well, virtually every gaming jurisdiction in the United States-and many abroad-have patterned or are attempting to emulate the Nevada system.

The facts are simple and the most important fact is that we have achieved our present position by limiting unnecessary bureaucracy and regulation. It's a simple matter of States rights coupled with responsible cooperation between government and business. Allow me to share with you just a few results.

• The Nevada gaming industry provides 43 percent of the $1.2 billion annually going into the State's general fund.

• About $215 million from gaming revenue is dedicated to the State's university system.

• Some $396 million goes to Kindergarten through Grade 12 education programs.

• And another $316 million is devoted to State-sponsored human services programs.

Nevada isn't the only State that has turned its gaming proceeds into success for the overall community.

• In Missouri, taxes paid by the six boats produces $56 million for State universities and $98 million to elementary and secondary schools.

There are many other statistics that time does not allow. But the point is, the casino industry can operate successfully and responsibly without another costly, time consuming, and politically expedient array of studies.

Let's consider one final misperception. Nevada is not riddled with crime. In fact so-called organized crime in the gaming industry is virtually non-existent. FBI and other local, State or Federal statistics bear this out around the Nation. In a statement from Ron Asher, Director of the Division of Enforcement for the State of Nevada, Mr. Asher said, "Within the licensed gaming industry, there is no significant impact of organized crime".

I doubt that the people from your communities would voluntarily come to a dangerous or undesirable environment. The most important ingredient in the success of any business or industry is that they maintain integrity with their customs. The gaming industry in Nevada and elsewhere have done that and have succeeded. No Federal study can safeguard against that. It simply isn't necessary. Responsible State authorities can, will and are doing just that.

Thank you. I'd now be happy to entertain your questions.

Chairman STEVENS. Thank you. Senator Glenn.

Senator GLENN. Thank you, Mr. Chairman. I guess there are a lot of issues that have grown the last few years that I can go back and forth and make a case one way or the other for a Federal commission or not. I do not think they can do it on the budget the bill sponsors are talking about, make a study of gambling.

Senator Reid, you mentioned there are about 200 studies on the impact of gambling. Could you give us a list of those so the Committee staff could look it over? Could you provide those for us?

Senator REID. We will do that before the hearing is over.

Senator GLENN. If you would, I would appreciate it, and that way we can have the staff look at these studies and maybe get some background that would further illuminate this issue.

Senator REID. I would be happy to do that.