The New York Times THURSDAY, SEPTEMBER 7, 1995 Keno Game Ushers In New Era Quick-Pay Game, Long Opposed, Makes Its Debut Keno Ushers In a New Era of Gambling Continued From Page Bl in Atlantic City." "I won a dollar," she said. "I bet $7. I have no more money for the diapers and the milk. But I had fun." New York is the eighth state to offer keno, a game that Republicans and Democrats alike had opposed in Albany for years. But it was approved this year with apparent reluctance in the face of a nearly $5 billion deficit, as lawmakers scrambled to find money to prevent increases in college tuition or cuts in welfare and Medicaid. The game is expected to bring in $180 million in its first full year of operation. "There was a line we were drawing in the sand, and we had to be more open, I should say, to new additional revenue sources," said Patricia Lynch, a spokeswoman for Assembly Speaker Sheldon Silver, a Manhattan Democrat who had been a staunch opponent of keno. "That's the bottom line." Lawmakers, especially Democrats, were also courted aggressively by half a dozen lobbyists hired by the Gtech Corporation of West Greenwich, R.I., which runs the game on behalf of the lottery. The company will be paid 1.525 percent of the sales. Except for the pace and setting, Quick Draw is played like any other keno-style lottery game. A player picks 1 to 10 numbers from a field of 80, filling out a card that is fed into a lottery machine by the bartender or other employee. The player bets $1, $2, $3, $4, $5 or $10 each game and may play a maximum of 20 games or $100 on each card. But players can effectively bet whatever they like by simply filling out more than one card. Every five minutes, a central computer at the lottery's headquarters spits out 20 random numbers, which zip through phone lines and are displayed simultaneously on terminals around the state. Players win according to how many numbers they match and how much they bet: the highest prize for a $1 bet is $100,000, if the player bets on 10 numbers and matches all of them. If the player matches five numbers on that bet, he would be paid $2. Like any other lottery game, players can redeem prizes of up to $600 on site. For larger prizes, they must file a claims form and receive their winnings from the lottery depart ment. The businesses that install keno games receive 6 percent of the total sales, with no extra commission for any winning tickets they sell. That percentage is less than what many establishments earn for food and drinks, but many bars and restaurants agreed to the game in the hope of attracting customers both to gamble and, they hope, to spend more on food and drink as well. But many bars have turned down Quick Draw, both because of worries it may not pay off financially and because they feel it essentially turns their establishments into betting parlors. "I think it demeans my restaurant and bar," said Don Berger, owner of the Riverrun in TriBeCa. "It smacks of Atlantic City, honky-tonk and we don't do that. I am not interested in that one bit." In Massachusetts, which has run a keno game for a year and a half, a debate has ignited over placing keno terminals in convenience stores which critics say brings gambling into places where children can watch. In New York, the law was written to exclude most convenience stores by requiring outlets to have a minimum of 2,500 square feet. But the game is being installed in some liquor stores, supermarkets, pharmacies and other outlets that do meet the space requirements. It is too early to know whether any strong opposition to Quick Draw will emerge, but if the experience of other states is any guide, the game will probably be popular among those who play. "People are going to gamble anyway, if not in New York, then in New Jersey," said Gino Gulli, a retired barber, as he placed a losing $2 bet in Keenan's bar on 231st Street and Broadway. The profits to the state, he said, were "good for the state for a good cause." As he spoke, Bert Patel, a candy store owner, basked in the glow of a $10 win. "I just got my beer money back," he said. WEDNESDAY, APRIL 12, 1995 The Washington Post Sports Betting Rings Prosecutors Say Affluent Teenagers By Dale Russakoff Washington Post Staff Writer NUTLEY, N.J.-Standing tall above an impeccably manicured ball field, the biggest presence in a little downtown known for nickel parking meters and family owned shops like The Eight Ciccolini Brothers appliance store, Nutley High School looks as wholesome as the suburban community surrounding it. But when three Nutley High students forced a 14-year-old schoolmate into a car, drove him to a housing project in Newark and dumped him there in February as punishment for failing to pay $500 in gambing debts. authorities uncovered a sophisticated betting operation run by student bookges who not only mimicked the Mob, but also worked with it. Prosecutors have charged three students, two of them juveniles, with illegal gambling, kidnapping and theft by extortion. Three adults are charged with illegal gambling conspiracy for collecting debts and serving as intermediaries between student bookies and a New YorkNew Jersey crime family. The probe has moved beyond the students, prosecutors have said, and is heading "up the chain" of the crime family. More arrests are expected. Nutley is only the latest in what has become a pattern of cases of organized crime infiltrating high schools, particularly in affluent communities, to capitalize on teenage gambling, according to police in several jurisdictions. Teenage gambling is attracting growing attention as a national problem; the first formal conference on the subject will be held later this spring at Harvard University. "Sports betting is in every high school. It's just something kids do," said Durand F. Jacobs, a professor of psychiatry at Loma Linda University Medical School and an authority on teenage gambling. "And when there's big money, the big guys smell it and they come in." In recent years, police have bustnd Iarna hetting rings in several up scale suburbs around New York City-including Madison, Conn., and West Orange, Paramus and Maplewood in northern New Jersey-and officers in each case charged or suspected that organized crime families were involved. In Chicago. authorities uncovered a gambling ring at a private high school after an 18-year-old's arm was broken cr faung to pay. No charges were ued, according to the prosecutor who investigated the case, because student bettors refused to cooperate for fear of retaliation. Police in Montgomery and Fairfax counties, the two most affluent in the Washington area, said they knew of no such cases in their jurisdictions. In the New York area cases, students have run up debts in the tens of thousands of dollars, placing bets by telephone with bookies. In Nutley, bettors were given an 800 number to call for the "line" on football and basketball games, professional and college. They phoned in bets to student bookies, using the lingo of a gambling ring: "two times" was a $10 bet. "100 times" a $500 bet. Students could place bets all week without being asked to come up with cash. Monday was pay-up day. If they won, the bookies deliv ered the cash. If they lost, the bettors had to pay, and if they didn't student bookies were under pressure from the professional bookmakers to collect, investigators said. Police said bets totaled $7,500 a week from about 25 students and about 25 adults. In New Jersey, it is a crime to run a bookmaking ring, but bettors are not liable. A group of baseball players preparing for practice here the other day said the case has been blown out of proportion. "In reality, it was just some kids making a few bets, not some big thing like in New York," said team member Mike Greco. "If you didn't pay, they said, 'Make sure you do.'" Asked about the kidnapping, Greco and other players said the 14-year-old who But community and school lead- Edward Looney, who heads the compulsive gambling council, said the mother of one of the juveniles charged with kidnapping has enrolled her son in Gamblers Anonymous. "He owed the bookmaker $5,000," Looney said. “He was under a lot of pressure and he did something crazy." Essex County assistant prosecutor Fred Franco said that in an earher investigation elsewhere in New Jersey, a 16-year-old high school student was found to have prostituted his girinend around school to raise money to pay his debts. She was pawned around the school, willingly," he said. "They both talked to us, but absolutely refused to cooperate out of fear. She said she did it to help him. He was threatened, his family was threatened, he had to get the money and he felt this was the only way to get it." Franco said parents often pose a major obstacle to cracking such cases. "The parents, 99 percent of the Mr. HYDE. Our last opening statement is but certainly not in rank of quality at all-Senator Harry Reid of Nevada. STATEMENT OF HON. HARRY REID, A SENATOR IN CONGRESS FROM THE STATE OF NEVADA Mr. REID. Thank you very much, Mr. Chairman. Mr. Conyers, distinguished members of the committee, we have heard a great deal since the elections last November about States' rights. Time and again the word has gone forth throughout the land that the stated mission of this Congress is to return power to the people and to the government entities closest to them, the States; and yet with the bill under consideration of this committee we would appear to allow an exception to that creed. We seem to be suggesting here that the States do not know enough about their own needs to understand the effect of gaming on their economies and social structures, even though during the past decade we have had over 200 separate studies of the effects of gaming. Why has gaming proliferated across the country? The answer, Mr. Chairman, is very simple. The States themselves have chosen to allow it. The governments closest to the wishes of the people have chosen to allow gaming within their borders. More often than not, those decisions have come about because the people, through ballot questions or through their elected representatives, have approved gaming. Gaming is an area where the Federal Government has left the States alone. We in Nevada have fought for decades to keep the Federal Government out of what is unquestionably a State matter. Mr. Chairman, I can speak with experience about this industry. I was chairman of the Nevada Gaming Commission from 1977 through 1981, during a period of time when our State vigorously pursued and rooted out elements of organized crime in Nevada's gaming industry. During my tenure, we closed a major strip hotel and assessed at that time the largest administrative fine in the history of this Government as a result of the investigations. I repeat, this was the largest administrative fine in the history of our country. Nevada has prospered as a result of a proper State and I stress State-decisionmaking and involvement. My friend from Indiana's assertion that there is Federal control of Indian gaming and that is comparable to individual State gaming is illogical. Indian tribes are sovereign and can only come under State control with the tribe's permission. Keep in mind, Mr. Chairman, some who are in favor of this national study wish to make a moral argument against gaming. We have heard part of that here this morning. Well, we in this Congress have to legislate many things, but I would suggest that we should not be in the business of legislating morality. It simply cannot be done. Keep in mind, Mr. Chairman, that States themselves have scrutinized the impacts of gaming on their economies and social structure. In the past several years, I repeat, more than 200 separate studies on the impact of gaming have been conducted. Many of these have been conducted by State governments, local governments or on their behalf. Nevertheless, if this committee in its wisdom feels that another study of a national scope must be done, then I would hope that the answer does not come before the question. Pardon the pun, Mr. Chairman, but I hope that such a study would not be a stacked deck. I would urge the committee, if it chooses to move ahead, to give serious thought to the contributors to such a study. I would hope that law enforcement agents, attorneys general, and regulators in places like Nevada and Atlantic City who have proven experience would be included in this study. But in the final analysis I believe in the direction that the States themselves have chosen to take. They know what is best for their people. The States should not be preempted under decisionmaking regarding gaming by this Federal Government. Thank you very much, Mr. Chairman. Mr. HYDE. Thank you, Senator Reid, very much. And I thank the panel. You are all certainly welcome to stay and hear the next witness. Prior to calling the next witness, the Chair has an important announcement. The next witness is appearing voluntarily, but the Chair has been advised by the Department of Justice that the witness's appearance here presents a substantial risk to his personal security. Any depiction of the witness's face would substantially increase that risk. Therefore, in order to minimize the risk insofar as possible, the Chair directs all cameras, including television, video or still cameras, to be turned off or closed until the witness is seated. After the witness is seated, cameras that are in a position to capture only the back of the witness may be used. When the witness finishes testifying and before he gets up to leave, all cameras must be turned off or closed until the witness has left the room. Anyone failing to comply will be removed from the hearing room. Now, we expect votes on the floor around 11:30. We expect a cluster of three votes, and so if we are-and I am sure we will be well into this witness's testimony, he will have to be removed and then returned, so we will have to repeat the process. But I request urgently the press's cooperation in this request. It will take us a minute to rearrange the furniture. The witness will please be seated. Our next witness is William Jahoda, a former mob bookmaker from Chicago. At the outset, I want to thank you, Mr. Jahoda, for coming here today. I know you have done so at considerable risk to your personal safety, and I appreciate your determination to appear before us under these circumstances. Mr. Jahoda was a bookmaker for the Chicago mob from 1975 until 1989. During that time he has told us he has made as much as $400,000 a year from all manner of gambling operations. Estimates of the betting action that Mr. Jahoda handled during these years ranged from a quarter to half a billion dollars. According to Mr. Jahoda, his participation in this activity consisted of approximately 80 percent sports bookmaking and 20 percent casinos and other activities. In short, Mr. Jahoda will give us an insider's |