Friday, December 9, 2022

Colorado: City leaders call on legislators to regulate “gray casinos” operating outside state law | Yogonet International

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So-called “gray casinos” have begun emerging in Colorado, leading city officials to push regulators for further control, with some describing the situation as a public safety issue, given a lack of consumer protections, reports The Denver Channel.

The establishments operate outside of Colorado’s gambling laws, which permit gaming as long as it occurs within casinos, under strict guidelines and supervision. A Denver7 Investigates team has found “adult gaming arcades” are open all over the state, and visited establishments of this kind across the Denver metro area, where the storefronts are often located in strip malls. 

“Gray casinos” staff told the cited local media that the businesses “typically pay out better than standard casinos.” The arcades operate in different ways: for instance, at one Lakewood location, players pay cash at the register and then a machine distributes winnings in cryptocurrency. Others offer cash for cash, with payouts at the register.

The situation has led to city officials taking notes. Aurora City Councilman Curtis Gardner told Denver7 he was considering introducing an ordinance to better regulate, or prohibit, “gray casinos.” “Their facilities are using casino-type slot machines, but they’re using a different power structure to kind of work around the state law,” he said.

However, the establishments argue their games are different from those of casinos, alleging they operate skill tables that fall under the arcade games category; while the use of cryptocurrency exploits a loophole in a 2018 state law, which bans gaming machines from paying out cash prizes outside of the state’s gambling towns.

Local media further reports these “gray casinos” have also begun popping up on Colorado’s Western Slope, with Montrose Police Chief Blaine Hall describing it as a public safety issue that has been linked to crime in the small community. This led Montrose City leaders to pass a temporary moratorium on any new adult gaming arcade in hopes that the state legislature takes a look at the issue and passes new regulations.

While it seems lawmakers will not take up the issue during the current legislative session, the Colorado Gaming Commission has taken notes. Executive Director Peggi O’Keefe told Denver7 Investigates that while state-approved gaming towns are operating by the rules, gray casinos outside of these jurisdictions are “providing games that are illegal.”

There are two ways, under existing Colorado law, that casino gambling can be permitted within the state. Native American tribes, operating under tribal sovereignty, may conduct gaming in their own casinos, such as the Ute Mountain Casino, Hotel & Resort in Towaoc, which is run by the Ute Mountain Ute Tribe.

Meanwhile, state law authorizes casino gambling in specific cities or towns: as of today, three such localities -Blackhawk, Central City, and Cripple Creek- have been authorized, through legalization that took place in 1991. Many other jurisdictions have proposed gambling since that year, but all proposals have systematically failed.

Gaming in Colorado is rendered illegal outside of the cities and jurisdictions deemed legal. Gaming occurring outside of these places does not have proper consumer protections or regulations in place.


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