Article May 27, 2015

The worst kind of legislation on gambling

Republican State Sen. Del Marsh introduced what has to be the worst piece of gambling-related legislation in the history of Alabama in early May. Marsh, who is president pro tempore of the Alabama Senate, flip-flopped on what observers thought were principled stands against legalized gambling and became its chief proponent. 
 
More importantly, Marsh is using the power of his office to lead efforts to have Alabama legalize a state lottery, approve full-blown casinos and form a compact with the Poarch Band of Creek Indians that would make American Indian gambling activities a permanent part of state life. 
 
Any one of these proposals is controversial by itself. That all would be considered at the same time would have been inconceivable until Marsh’s surprising and disappointing announcement. 
 
The catalyst for the proposal is Alabama’s economic crunch. State government is underfunded and has been for years. The Legislature has filled the income gap with borrowing and one-time funds, but those sources have been exhausted. 
 
With no other place to turn Gov. Robert Bentley proposed increasing certain taxes but Marsh and other legislators are so scared of any new taxes that the governor’s proposals could not even get a committee hearing until the legislative session was more than half over. 
 
Financial burden
 
Instead Marsh and others purpose gambling as the fix for the revenue shortfall. They would prefer to balance the budget on the backs of those least able to pay rather than adopt a fair and just tax system. Lotteries place the financial burden on the backs of poor and working class people rather than on capital and corporations. 
 
Pulitzer Prize-winning tax reporter David Cay Johnston points out that 11 states already raise more money per person through lotteries than they raise through corporate income taxes. That is not the direction Alabama should go. 
 
Economist Richard D. Wolff added, “Simply put, lotteries take the most from those who can least afford it. Instead of taking those most able to pay, state leaders use lotteries to disguise a regressive tax that falls on the middle and even more on the poor.” 
 
For example Lenoir County, N.C., is one of that state’s more economically depressed areas with 23.5 percent of the population living under the poverty line. Yet in 2010 enough scratch-off and lottery tickets were sold to account for $423.92 worth of purchases for every adult in the county. That is more than twice the state average of $200.11. 
 
The California Budget Project reported that in 2007 “the poor, nonwhite, urban and less educated spend a higher portion of their income on the lottery than other demographics.” 
 
A 2008 study by the Federal Reserve Bank of St. Louis found “a large portion of lottery profits come from people who receive some financial subsidy from the government, suggesting the lottery profits from those with the least disposable income.” 
 
One out of 4 children in Alabama already live in food insecure homes. One in five seniors in our state is food insecure. Poverty is above the national average. Surely the state Legislature can find a better policy to solve the state’s financial woes than to prey on these people. 
 
A state-sponsored lottery is one of the cruelest and most callous proposals the Legislature could make. A study by the Opinion Research Corporation for the Consumer Federation of America and the Financial Planning Association found that 38 percent of those earning less than $25,000 annually believed the lottery is the solution to accumulating wealth. Perhaps that is why David Just, behavioral economics expert and director of graduate studies at Cornell University in Ithaca, N.Y., said, “We find there are big jumps in lottery purchases when the poverty rate increases, when unemployment increases or when people enroll (in) welfare.” 
 
Unlikely odds
 
When the odds of winning a Powerball jackpot, according to The Mathematical Association of America, is one in 175 million, is that what state government should be promoting?
 
Should state government be like a sideshow huckster trying to separate hard-earned paychecks from its citizens? Should Alabama’s government encourage get-rich-quick schemes over the proven disciplines of work, thrift and responsibility? 
 
And what could be more callous than the state’s powerful decision makers purposely manipulating the vulnerable of society in order to avoid having to shoulder a fair and just portion of the expense of government? 
 
The casino proposal is equally misguided. Casino gambling cannibalizes the economy. That is because casinos divert spending that would have gone to buy cars, clothes, food and other goods and services. 
 
A year ago when the New Hampshire Legislature rejected building a casino in the Granite State, Paul Davies, the Maggie Walker fellow at the Institute for American Values, said, “Public policy built around inducing residents to gamble away their hard-earned money is a bad way to fund the government.” We agree.
 
Promises of gambling income are always exaggerated. In 2009, Ohio residents were told four proposed casinos would generate $1.9 billion in annual tax revenue for the state. The actual revenue for the first year was $839 million — off by more than $1 billion. That is a big “oops.”
 
That says nothing about the social problems ranging from increased criminal activity to suicides. In Gulfport, Miss., suicides skyrocketed 213 percent in the first two years after casinos opened there. In nearby Biloxi, suicides increased 1,000 percent in the first year alone. 
 
Why would Alabama want to start something that is declining nationwide? In Atlantic City gambling revenues are down more than 47 percent since 2006. Casinos are closing. Others are filing bankruptcy. In Maryland, Delaware, Pennsylvania, Connecticut, Indiana, Ohio, Wisconsin, Louisiana and other places the reports are the same — gambling revenue is declining with no stop in sight.
 
Marsh’s bill also places new casinos at the Birmingham Race Course, VictoryLand in Shorter, Greenetrack in Eutaw and the Mobile Greyhound Park. At least three of these facilities have been convicted of breaking Alabama gambling laws, some multiple times. Why would the state reward these lawbreakers with a casino site even if the proposal were adopted? Rewarding lawbreakers with casinos would be the wrong signal to send about the results of illegal conduct.
 
Sen. Marsh’s proposals are based on flawed economics. They are based on bad public policies and are unworthy of responsible legislative leadership like he has provided in the past. Senate Bill 453 embodies values contrary to the Christian faith. This bill is a threat to the welfare of the state of Alabama and should be soundly defeated.

Originally published here.

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