On Christmas Eve 1870, two gamblers had a fatal dispute at the American Saloon in Hamilton, and Lebanon was dragged into the middle of it. You can read all about it in the yellowed, crumbling news clippings on the wall at the Golden Lamb Inn.

The murder trial was moved to Lebanon, and the defense lawyer was Clement Vallandigham, a notorious copperhead who was kicked out of Congress by President Lincoln and banished to the South as a traitor.

He died in a room at the Golden Lamb, trying to demonstrate how the dead gambler in Hamilton killed himself by firing a pistol he tried to draw from his pocket. He did such a good job of re-enacting the accident, he shot himself and bled to death.

This is history you can feel, like the lumpy floors that creak as if old bones are buried under the wine-red carpet; like banisters worn smooth as satin and dark as strong tea; like the ancient county map that has been stained tobacco-leaf brown by layers of smoke and years.

The Golden Lamb, 187 years old, is the landmark that gives Lebanon its patina of historic charm.

But the old stagecoach town may be at a crossroads. And most don't even know it.

If the quaint Rockwell Christmas-card Lebanon is its Bedford Falls hotel, the Pottersville of tomorrow is just a mile away at Lebanon Raceway, which could become one of Ohio's biggest casinos.

A bill in the Ohio General Assembly would install Video Lottery Terminals at seven racetracks in Ohio: River Downs in Cincinnati, two in Cleveland, two in Columbus, one in Toledo and Lebanon.

That means computer roulette, craps, poker, blackjack and slots.

Casinos.

Money so big it's not counted, it's weighed.

Lebanon sits halfway between Cincinnati and Dayton, sandwiched by I-71 and I-75, perfectly situated to be Ohio's Vegas in the Heartland.

Sen. Lou Blessing, R-Colerain Township, is sponsor of the VLT bill. He admits slots are "mindless'' and isn't thrilled about a casino in quiet Lebanon. "Is it a quaint little town? You're right. I guess I wouldn't mind including a local option (to say no),'' he said.

But he has counted the Ohio license plates at casinos in West Virginia and Indiana. "It was easily two-thirds. That's the reason they put them on the border. They're not stupid.''

Gov. Bob Taft opposes VLTs. But virtual gambling looks virtually inevitable. It could raise $500 million to help plug a $4 billion hole in the state budget.

"I would shut down all these border casinos if you could show me a way to do it,'' Sen. Blessing says. "But all that money is just leaving the state. We're losing $1.3 million every day we delay.''

If the bill passes as written, Lebanon Raceway would be required to open a virtual casino by next July. "We would be happy to get in on it,'' says John Carlo, director of off-track betting. He says Lebanon won't change. "We're a strong city.''

Others are not so sure. They say a casino doesn't fit.

"I would think most people wouldn't like it once it's here, but they're not paying attention,'' said John Zimkus, a middle-school teacher and Lebanon historian. "Our community is very touchy about what happens to it.''

Lebanon has grown from a farm town to a bedroom suburb of Dayton and Cincinnati. Growth and tourism are strong. But as Mr. Zimkus points out, "It's a different kind of tourism'' than gamblers.

It's Golden Lamb vs. golden calf.

Lebanon is being dragged into someone else's gambling fight again. If residents don't wake up, the small-town charm they love could be history.

E-mail pbronson@enquirer.com or call 768-8301.