Gambling and the State
- Sep 1, 2005 - comment
In March 2003, the Taxpayers League of Minnesota published a list of reasons why states should say no to gambling. The following is their list, which is applicable to all states:
- The government should not be running profit-making enterprises, much less an entertainment industry.* If the state opens a casino, it will suddenly be in the gambling, restaurant, liquor, hotel, and concert business.
- Accountability in government demands that taxing and spending policies should be transparent, i.e., revenue should be collected through taxes and fees that taxpayers can see, and should be spent in ways that taxpayers can easily understand and keep track of.* Gambling revenues will undoubtedly find their way into “slush funds” to finance projects that would never make it through the normal process.
- Casinos and other profitable enterprises are seen as “easy money.”*That is why there are so many proposals today. How many new casinos will be necessary the next economic downturn, or to fund the next unpopular project? Soon enough there will be 4, 5, 6, or 10 casinos to fund pet projects the taxpayers would otherwise reject.
- The success of any state gambling enterprise will require millions of dollars to be spent on additional advertising.* Already, over $8 million is spent by the state lottery to convince taxpayers to waste their earnings on lottery tickets. How many millions of dollars will the state spend to separate citizens from their paychecks at casinos? $20 million? $50 million?
- Minnesota’s culture will be permanently altered when the state spends millions in advertising dollars, ensuring that our children are bombarded by messages about gambling’s virtues.* This would be a perversion of the basic role the state has in educating the next generation.
- The profits to the state from casinos are grossly overstated because the substantial increased law enforcement, judiciary, and welfare costs to the state are ignored.* How many more bankruptcies, embezzlements, and other personal tragedies caused by gambling addiction will the taxpayers be expected to bear the costs of?
- By its nature, the gambling industry makes its profits by stacking the odds against the little guy.* It has no product, and therefore cannot add to the overall economic growth of the state. It simply redistributes money from its poorest citizens to the government. It is certainly not the proper role of government to become a predator of its citizens, fleecing them in order to keep its appetite for spending growth fed.
Gambling: Why the State Should Say No,, March 23, 2003 [Accessed May 3, 2005]
More and more state politicians are looking to gambling revenues to feed the state coffers rather than raise taxes and incur the ire of the people. Once limited to the glitz and glamour of Las Vegas, Nevada and Atlantic City, New Jersey, gamblers can now find more than 440 casinos all the way from the Louisiana bayou to the Pacific Northwest. Forty riverboats and dockside casinos occupy Illinois, Indiana, Iowa, and Missouri. More than 400 Native American-run casinos ply their trade in 23 states from Connecticut to California. Lotteries are now found in 23 states rather than seven a few short years ago.
What is at stake? Billions of dollars in revenue. “States made $14 billion in profits on the $45 billion in lottery tickets they sold in fiscal 2003, according to the North American Association of State & Provincial Lotteries, a trade group that represents state lotteries. Non-Indian casinos pulled in $26.5 billion in revenues and paid more than $4.3 billion in taxes in 2003 to the 11 states and localities that allow them to operate. Indian-owned casinos in 29 states brought in $16.7 billion in revenues in 2003 and made $759 million in payments to state and local governments.
“These days, the hottest craze is to bring slot or video-poker machines to dog and horse racetracks. The country’s 23 ‘racinos’ already draw crowds in seven states and more are on the drawing board for Maine and Pennsylvania. Racinos forked over $776 million in taxes in a half-dozen states.”
Here are just a few examples of how states catered to America’s gambling fervor in 2004:
- Pennsylvania is counting on adding $1 billion to its coffers by bringing 61,000 slot machines to the Keystone State, a development that set off alarm bells for neighbors that likewise vie for gamblers’ dollars.
- California Gov. Arnold Schwarzenegger ® struck a deal with five California Indian tribes to pay the state $1 billion in exchange for allowing the tribes to maintain their monopoly on slots.
- Kansas kicked off what it calls the “world’s first interactive Internet lottery game.” The new online “e-Scratch” lottery game is expected to garner more than $500,000 in revenue the first year.
- Iowans gave the green light to blackjack and other card games at race tracks and gave the state authority to issue an unlimited number of casino licenses.
- Tennessee began a lottery and, along with North Dakota and Maine, joined Powerball, the twice-a-week game that now has spread across 27 states, the District of Columbia and the U.S. Virgin Islands. Despite the astronomical odds against hitting the jackpot – 120 million-to-1 – Americans snapped up $2.2 billion in tickets in fiscal 2004, and Powerball returned $660 million to state coffers.
Pamela M. Pah, States Cash In On America’s Love Affair with Gambling, (Stateline.org), January 6, 2005
In spite of growing dependence on gambling revenues by some state officials, some gambling initiatives are going down in defeat at the hands of a growing number of people who are dissatisfied with unfulfilled promises from gambling proponents. In 2004, new gambling initiatives were defeated in California, Nebraska, and Washington with Michigan residents approving an amendment to the state constitution that requires voter approval of any proposed gambling expansion in the future. Oklahoma was the only state to approve a new gambling initiative. These results came on the heels of 2003 in which voters turned back 43 of 46 attempts to expand gambling.
Tom Grey, executive director of the National Coalition Against Legalized Gambling, said that these results are indicative of a backlash against gambling among voters.
Barrett Duke, vice president for public policy and research for the Southern Baptist Ethics & Religious Liberty Commission Washington, said, “Most Americans know someone whose life has been significantly affected by a gambling problem. They are no longer interested in continuing to expand gambling and all the problems that go with it. The only people enriched by gambling are the gambling establishments and those few businesses that support them. Everyone else suffers. The American people were willing to give it a try but I think they’re finding out that there’s no content behind the promise.” Duke added, however, that the battle is far from over.
Ken Walker, Gambling Loses in 4 States; Backlash Cited of Empty Promises, (Baptist Press), November 3, 2004
According to statistics compiled by the National Coalition Against Legalized Gambling, Nevada is not a state that other states should attempt to emulate in many respects. Following are some categories of interest and where Nevada ranks among other states:
Adapted from So You Want to Be Like Nevada? (National Coalition Against Legalized Gambling) [Accessed May 4, 2005]
Further Learning
Learn more about: Family, Addictions, Gambling