Cashing In 

City Hall is the big winner in the Bitteroot’s casino boom

If there’s a single growth industry in Hamilton, it’s probably gambling.

Like it or not—and many people don’t—gambling has become an integral part of the Hamilton cityscape.

Recently, the number of casinos in Hamilton increased by two. Two existing buildings—a former motel on the north side, and the old Kentucky Fried Chicken franchise on the south—were remodeled and remade as casinos, apparently a more lucrative concern than either motels or fast food.

For Dale Huhtanen, Hamilton’s finance officer, gambling is indeed lucrative—for the city at least.

In 1990, the first year the city began collecting its 10 percent tax from each of the city’s poker and keno machines, revenue was a mere $2,241.

A decade later, gambling revenue paid to the city has jumped to $408,544. And it’s not because city or state lawmakers increased the tax on machines. Rather, it’s the number of machines that have increased, though city officials say they have no idea how many there are in the city, and because the population has gone up as well.

Though some Bitterrooters roll their eyes and groan when they hear that yet another empty storefront has fallen to the gambling industry, Huhtanen is not one of them.

To Huhtanen, the incessant clamor of poker machines is music. In the years since that first paltry gambling tax collection in 1990 to this year’s whopping $408,000, revenues have continued to climb, and though Huhtanen keeps predicting that gambling will level off, it so far shows no signs of doing so.

“We keep saying, ‘It’s going to peak, it’s going to peak,’ but it doesn’t,” he says.

Adds City Administrator Mark Shrives, “We keep thinking it’s going to flatten out.”

Indeed, annual gambling revenue is about equal to the city’s property tax collections. This year, for instance, the city collected $408,840 in property taxes—just a few hundred dollars more than was raised by gambling taxes.

Though gambling revenue increases $30,000 to $40,000 each year, Huhtanen makes conservative projections for the following fiscal year. And every year he is pleasantly surprised to find that his projections are wrong. He predicts that next year gambling revenue will grow to $410,000, but if trends hold that revenue could easily reach $435,000 or more.

And make no mistake: The city needs that money, regardless of how distasteful it may seem to some, or how “tainted” gambling money may appear. And if it dried up, or was taken from the cities by the Legislature as lawmakers are wont to do every two years? “When you take that much money out of the general fund we’d really have to drastically cut a lot of services,” Huhtanen says, adding that lay-offs would probably follow. “I’d probably be one who was going.”

Neither Huhtanen nor Shrives nor their colleague Police Chief Allan Auch pass judgment on gambling taxes, nor are they overly concerned with the city’s growing dependence on gambling.

“Oh, we’ll get some calls about it,” Huhtanen says. “Some of the do-gooders or church groups will come in.” Early on, when the city first began collecting taxes from video poker and keno machines, City Hall would be visited by the disapproving “little old lady brigade.” But if anything has “flattened out” about gambling in Hamilton, it’s the complaints. Whether that’s because people have just gotten used to the presence of casinos, or whether it’s because they know that gambling taxes keep their property taxes low and services available and cheap is unclear.

“People keep complaining about taxes,” Huhtanen adds. “But damn it, they want police cars and paved streets and how can we provide those services [without gambling taxes]?”

That’s why Huhtanen cringes whenever the Legislature meets. Every session, he says, the Legislature tries to put its collective hands in the big gambling pot, taking money from cash-strapped cities and towns across Montana. This session is no different, Huhtanen says with a weary sigh. One pending piece of legislation would have the state, not the cities or towns, collect the gambling revenue. The state would redistribute that money back to the towns, but would keep a 30 percent share for itself.

Huhtanen says he’ll oppose this legislative attempt to streamline the cash-flow system, since, to his way of thinking, the city does very well collecting and spending the only tax that increases annually—and by healthy percentages—with nary a complaint from the taxpayer.

It is a dream of a tax, despite the social downside of gambling, and the broken families it can sometimes leave in its wake.

“I get a little concerned about it,” Huhtanen says about gambling as a growth industry in Hamilton. “But I know it’s going to peak out sometime.”

Though neither Huhtanen nor Shrives comes right out and says so, both imply that as long as there is no increase in gambling-related crime, then the city’s job begins with tax collection and ends with tax spending; it is not the city council’s job to investigate, mitigate or quell social problems associated with gambling addiction.

“I think there are some families who are hurting because of what mommy or daddy are putting in the machines, but I haven’t seen it affecting the city as a whole,” Huhtanen says. Police Chief Auch agrees. “There’s nothing that would indicate that casinos impact our crime rate,” he says. Though he says he has no statistics to prove it, Auch speculates that poker machines, like television, have a calming effect on users. “If people are busy at a machine, they’re too busy to hassle each other,” he says.

“If it wasn’t for this gambling tax,” Huhtanen says, “cities would really be hurting.”

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