Is casino gambling the answer to states' economic woes?
One would certainly think so, to hear the advocates make
the case. Of course, the advocates mostly fall into two categories:
Those who know they're going to get rich off the casinos (the
owners/operators/contractors) and those who hope they're
going to get rich. Or at least break even. Or maybe just not
lose too much, while having all the "fun" of sitting in a
space bigger than the average aircraft hanger, where the sun
never shines, the air is stale and dead, and the noise level
never goes down, endlessly pushing a button and watching little
numbers and symbols spin, for hours and hours.
Auntie fails to see the appeal in that "recreational
activity," but that doesn't mean I think all casino gambling
everywhere should be outlawed. But do I think it's "the answer
to states' economic woes?" Well, no. For one thing, twenty-six
states already have Indian owned/operated casinos, and another
eight or ten have other types of casinos. And from an economic
standpoint, that means it's going to be very hard for any
state to make a large enough net profit for the effort to
Lots of analysis has gone into this, because in the last
ten years or so at least seventeen states have seriously considered
legalizing casinos or allowing machine gambling (slots/video
poker) at other venues. And every state has gathered facts,
commissioned studies, done analyses, and assessed the potential
impact of gambling on their budgets.
Most of them have rejected the idea, because several things
keep recurring over and over again in all the studies, analyses,
Casinos generate a net inflow of new cash to a state
only when they are positioned near the borders of an adjacent
state where there are no casinos. If they are positioned elsewhere,
they are simply a tax mechanism that disproportionately preys
on the most economically vulnerable people in the state -
whose subsequent economic woes are likely to increase the
state's total expenditures for a variety of law enforcement,
social services, and physical infrastructure programs.
Restaurants, retail establishments, and entertainment
businesses in the vicinity of new casinos or gaming facilities
experience losses in business, which translates into state
tax losses of sales tax revenues and business income tax revenues.
Attempts to "keep gambling money inside" a state
that has casinos on its border in a neighboring state (Illinois
tried this) have suffered net economic losses in spite of
the 'recapture' of gambling cash.
Analyses of several states' ventures into gaming
are revealing that short-term economic boosts do not transfer
into long-term economic improvements. Towns that expected
"spinoff" benefits from casinos - job growth, tourism,
etc., have been disappointed, and many have experienced a
net loss after factoring in law enforcement and infrastructure
Without ever getting into the "moral arguments" or even
the "social service arguments," it's pretty clear that the
only reliable financial winners from gaming are the owners
and operators of the facilities. It's a frail reed, at best,
for cash-strapped states to rely on for rescue - especially
when the need is right now, and it may take several years
to pass legislation, develop appropriate regulatory controls,
fairly and transparently let contracts, construct and initiate
facilities, and collect actual revenues.
Auntie Pinko thinks that the hopeful gleam in the eyes of
many legislators who look to the supposed "cash cow"
of gambling for rescue is not unlike the gleam I've seen in
the eyes of people standing around in convenience stores,
hopefully scratching off ticket after ticket, thrilled to
pieces when their 23rd $1 ticket wins them $10.
Just as a disclaimer, so that you, Harry, and other readers
know where Auntie stands on the "moral issues" of gambling,
Auntie has been known on more than one occasion to engage
in cutthroat penny poker at family reunions, run multiple
cards at a local charity's bingo night, and won't necessarily
turn down a who-gets-to-pick-the-rental-movie bet on the outcome
of certain local political contests.
But I do get a little uncomfortable at the idea of my government
being in the business of exploiting financially vulnerable
citizens with the cruel chimera of hope for a multi-million
dollar jackpot. I don't know whether my feelings are influenced
in any substantial way by my political ideology - I suspect
this issue is one of those that cross such lines - but I do
know that I have many Democratic friends who have their own
reasons for being dubious about expanding the gaming industry.
Thanks for asking Auntie Pinko, Harry, and good luck on
your next lottery ticket (if you buy them!)
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