Buying Silence

Posted on June 11, 2013 by cagnyeditor

West Canada Creek 8648883400_05b7c72b4bwestcanada

NYS Legislature should not approve the pact between NYS and the Oneidas

The provisional deal (ref. 6, below) of 16 May between the State and the Oneida Nation of Indians, if not literally vote-buying, is arrant influence-peddling. Dead set on adding commercial casinos to his legacy for New York, Gov. Cuomo has sold out the rights of several parties for the contracted silence of the Nation about his proposed “casino amendment.” Those non-ONI parties, historically discordant, differ on why they object to the pact. They agree it is a bad deal for everyone except the ONI. Casino promoters elsewhere could also benefit; so might some residents of the proposed ten-county exclusivity area who sensibly don’t want another casino close to home but myopically don’t mind it somewhere else.

The county governments of Oneida and Madison Counties have acceded to the pact, under duress. (ref. 2) The NYS Legislature, the Attorney General and the Federal Government must also approve it. There are good grounds why they should not.

Opposition to all or some terms of the pact has come from the Cayuga Nation (ref. 5); from traditional Iroquois besides Cayugas (ref. 1); from the Conservative Party of NY; from Republican Assembly Member Claudia Tenney (ref. 3) ; and from the towns of Vernon and Verona. (ref. 5) For most of these entities, however, the implications for expanding predatory gambling are not the crux of their opposition.

To the Coalition Against Gambling in New York (CAGNY), a statewide organization, it is obvious that the pact was crafted just to prevent the ONI from using its money to fight the “casino amendment,” some outcomes of which could bring competition to Turning Stone. CAGNY totally opposes the proposed amendment. We thus oppose the ONI pact, which if ratified at all levels would make passage of the amendment more likely than if the ONI were against it. Our dismay with the pact, however, is less that it could smooth the path to more casinos in the state than that it gives further evidence our Governor will stop at nothing to gain his ends by any means.

To paraphrase Cornelius Murray, Esq. , attorney for Verona and Vernon, as he spoke in a press conference on June 4, “This is not about gambling. It’s about Constitutional law.” Mr. Murray’s concerns about the law are detailed in his letter to the NYS Attorney General (link in ref. 5). This is not a “win-win.” It’s a “win big-lose big.”

Read further for brief summary of the proposed terms of the pact is below and for the listed references.

Continue reading →

Invest in Recovery

Posted on June 6, 2013 by cagnyeditor

Dusk on the Neversink
8745715895_222d9cfde0_mNeversink

Dave Colavito, at a CAGNY press conference in Albany on 4 June 2013, presented this outline of a just scheme that would save NYS more than the hidden quantifiable socio-economic costs generated by legalized gambling each year.

The first step in helping local economies: Don’t make them worse. Yet the Gov.’s plan will do just that, because it ignores the financial cost of gambling disorders.
Socioeconomic costs of gambling in NYS are now estimated at $3.7 billion annually
- Exceeds revenues from all Atlantic City casinos in 2012
- 381,000 Problem and 172,500 Pathological gambler costs burden all NYers
- Gov.’s plan will produce more people (and costs) with gambling disorders.
- FISCALLY RESPONSIBLE ALTERNATIVE: NYS INVESTS in RECOVERY, not CASINOS
  - Stop Denying the Problem
  - State share of tribal casino proceeds isn’t restricted for education
    - § Dedicate $600 million escrow & future proceeds: Recovery, Prevention
Fund Professional Training, Staffing, and Siting to Address the Need
Fund Aggressive Marketing Campaign: Promote Addiction Prevention & Recovery

SOCIAL Implications

Gov. Cuomo Claims NYS is the Progressive Capital of the Nation

FIVE CONSIDERATIONS:

1. NYers afflicted with a disorder (Problem & Pathological gamblers) classified by the American Psychiatric Association exhibit measurably different brain function than the general population.

2. Predatory Gambling incites those differences in brain function

3. Symptoms of those afflicted worsen uncontrollably when re-exposed to Predatory Gambling

4.Vendors of Predatory Gambling derive 50% of their revenue from these afflicted persons and from those who trust(ed) them and lost their resources too.

5. NYS actively promotes predatory gambling via Lottery including video lottery terminals and electronic table games; Gov. Cuomo now wants to increase that promotion with added full-blown casinos.

New Yorkers could almost zero out the hidden costs of gambling if the State invested to guide all problem gamblers (and their families and friends) to become again the people they were before the first bet. This would save money and save lives, not take away money and take away lives.

The opinions expressed in this post are those of the author, Dave Colavito, and do not necessarily represent the opinion of any or all other members of CAGNY. Permission is granted to reproduce and distribute in whole or in part as long as the above permalink is cited.

Assets for Sale

Posted on June 6, 2013 by cagnyeditor

Peering over the Edge
Flickr CC

Governor Cuomo spoke in his press conference on May 9, 2013 (at minute 46:16) about setting tax rates on the new casinos he wants to see and the competition he expects among bidders. He continued “I think we have an asset to sell.”

He did not say what the asset is. It must be something big casino companies want.

Greek yogurt production capability?

Deep shale natural gas?

Apple production capability?

Olympic-quality winter sports settings?

Maple sugar production capability?

Nanotechnology infrastructure?

None of the above.

What else could that asset be other than a population to be trawled for customers? New York’s people are on the block.

Casinos depend for half their “gross gaming revenue” on the small minority of their customers who are pathological or problem gamblers.* These categories make up a very small fraction (about 4%) of the adult population. To reward owners richly, the casinos must maintain this small sector AND replace each person in it as he or she recovers, dies, goes to prison, gets deathly ill or moves out of range. The asset that’s really up for grabs, the mother lode, is current and future pathological and problem gamblers.

Yet this is not all that’s for sale. Each of these gambling addicts or problem gamblers has hidden assets that can be tapped through him or her. Those are the fiscal and emotional resources of many non-gamblers who enable the addiction while the gambler betrays their love or trust .

The casino companies don’t just buy the opportunity to capture or create compulsive gamblers, They buy a network of pipelines through each one of those afflicted gamblers to drain six, eight or a dozen other people. Lesieur* put the number at seventeen.

This is the asset for sale. What are we bid?

Grinols, Earl L. and J.D. Omorow. J Law and Commerce (1996-97) 16: 49-87

Lesieur, Henry The Chase, 1976

The above text was distributed by hand to the offices of all legislators on June 4 and read at a press conference held by CAGNY that morning in the legislative office building. It does not necessarily represent the opinion of all CAGNY members. Permission is granted by the author, Stephen Q. Shafer, to reproduce in whole or in part as long as the permalink above is cited.

Negative Expected Value

Posted on May 31, 2013 by cagnyeditor

Negative Expected Value: The Ultimate Triumph of Loss.

Summary: Though only one form of predatory gambling, lottery illustrates how and why predatory gambling drains not only the gambler but also everyone around each gambler from whom he or she can winkle or steal a dollar to pursue “the chase.” Using a simple model of lottery, this essay distinguishes “wins” from net gain, showing that unless a compulsive gambler quits, “extinction” is inevitable. Every rational person knows this. Sad to say, however, most people deny how badly trusting persons around the gambler will be hurt as the gambler fends off the inevitable. ”The gambler’s ruin” is not confined to him or her. This is the central evil of predatory gambling.

Adam Smith wrote about lottery “That the chance of gain is naturally overvalued we may learn from the universal success of lotteries. The world neither ever saw, nor ever will see, a perfectly fair lottery; or one in which the whole gain compensated the whole loss; because the undertaker could make nothing by it . . . There is not, however, a more certain proposition in mathematics than that the more tickets you adventure upon, the more likely you are to be a loser. Adventure upon all the tickets in the lottery, and you lose for certain; and the greater the number of your tickets the nearer you approach to that certainty.” Wealth of Nations book I Chapter 10 p 153

Continue reading →

Two Downstate Racinos Are Downstate Casinos Now

Posted on May 17, 2013 by cagnyeditor

spin

For practical purposes, there are at least two non-tribal full-service casinos operating today in New York State. If that surprises you, read on. The facilities at Aqueduct and at Yonkers call themselves casinos yet pose as “racinos.” In my opinion they are real casinos, cleverly disguised as “racinos.” They don’t have human croupiers or dealers, but offer table games in which the outcome of a play is governed by the same laws of physics that determine the outcome of a throw or spin by a human being. Such table games are billed as part of lottery. I say they are illegal. What’s your opinion?

An editorial in the New York Daily News May 5 showed that at Resorts World Casino (Aqueduct Racino) “electronic table games” of craps, Bo-Sic, roulette, and baccarat are bringing in a good part of the “video gaming” revenues.

http://www.nydailynews.com/opinion/playing-games-law-article-1.1334713

I am not a lawyer, but was persuaded by the carefully-researched editorial and by my own reading of the opinion of the Appeals Court in 2005 that these games are not permitted under the present New York State Constitution. Though operated by NYS Lottery, they do not meet the definition of “lottery” in the same way as do video lottery terminals (VLTs).

Continue reading →

Robbing Peter to pay Paul

Posted on April 15, 2013 by cagnyeditor

St Paul's from flickr 5172661797_d7003e47a8_m

St Paul’s flickr 5172661797_d7003e47a8_m

St Peter’s , photo from Flickr

Some cynic wrote “Whoever robs Peter to pay Paul can always count on Paul’s support.” Too many people, though they might hesitate to call gambling robbery, are comfortable with government’s taking gambling-derived revenues from Peter (the gambler) and converting them into what looks like a fiscal benefit to Paul. Paul here is the citizen whose tax rates were not perceptibly increased when government got revenue another way, from its share of Peter’s losses at legalized gambling. Paul is expected to be grateful for government’s easing up on him thanks to Peter’s losses. To feel that way in good conscience, though, he has to think it’s really not “robbery,” merely “parting a fool from his money.”

In NY we are most all Pauls, thanking government for fending off tax rate increases by reaping Lottery money. There are two things wrong with this state of affairs that should make us change it, hard as that would be. First, about half the revenue to government from gambling it sanctions is from the losses of addicted and problem gamblers. To keep “playing,” these people almost always have to take money from others who trust them. Whether predatory gambling literally robs the gambler himself or herself can be disputed. (See discussion below the “read more“ break.) That it robs others via the gambler cannot be disputed. It robs them not only of savings accounts, vehicles, retirement funds, lunch money, furniture etc., but of reputation, affection and self-esteem. These others number, for each affected gambler, as many as 10 to 17 [Politzer et al, 1992 citing Lesieur 1977].

Then there is robbery going on to keep Paul’s tax rate from rising. Paul can still be comfortable with that, if the identity of the victims is abstract enough. He ought also to realize, however, that he is not really benefiting by the apparent flatness of his tax rate. The money Peter cozened from his trusting family and associates (referred to as “abused dollars”) are only a piece of the hidden quantifiable socioeconomic costs of gambling. Counting in all those hidden costs doubles what it costs society to raise a dollar by tax-on-casino instead of by stepping up the rate of a conventional distortionary tax like sales tax or income tax. [Earl Grinols (2004), Gambling in America pp 180-181]

If Paul feels no compunction about seeming to get a break on his taxes due to revenue to government from gambling, still insists it’s a free lunch, it’s not. He gave at the office without knowing it. Some of his tax money went to criminal justice administration or social services triggered by events in the gambling exchange. He is also part of an economy hurt by lost productivity and lost creativity due to gambling. This is a touch of rot. Continue reading →

The Albany Gambling Diet

Posted on April 5, 2013 by cagnyeditor

The Albany Gambling Diet

Thoughts on Healthier Eating

David Colavito

When you consider how injurious the socioeconomic consequences of state-sponsored gambling are, compared to its benefits, you have to ask why Governor Cuomo is promoting the expansion of casino gambling, let alone as economic development. Sure, “gambling is already here” and “New York needs jobs” – neither is in dispute. And used as they are to promote the Governor’s plan, they’re certainly appealing. That’s the sweet side of half-truths many of us prefer to our vegetables. But if Albany isn’t serving a balanced meal, it’s in our interests to understand why. I’m suggesting it’s a failure of imagination.

The thesis has been with me for some time and came into sharper focus recently while reading False Idyll, an essay by J.B. MacKinnon. Dealing with an unrelated topic, MacKinnon’s words struck me as eerily apropos to the social injustice inherent to the casino economy – “… the way you see the world determines much about the world you are willing to live in …“

And because I choose to be generous in spirit, I choose to believe Governor Cuomo’s promotion of the casino economy is rooted more in how he sees the world rather than in the belief he can make it better. It’s an unfortunate conclusion, considering what life would still be like if others before him had constrained their own imaginations when confronted with the same choice on important public policy matters: emancipation and suffrage to name just two.

And though you might argue Mr. Cuomo’s recent policy commitments to gun control and gay marriage render my thesis flawed, I’d respond by saying perhaps you’re correct, but unlike for example integration in the south, I don’t think either would have occurred without strong political winds blowing at Mr. Cuomo’s back. Regardless, what really matters is the facts of the casino economy, their implications for social injustice, and Mr. Cuomo’s refusal to acknowledge either in his pursuit to fill state coffers. All of which is also to say, his fixation on the gambling economy is apt subject material for an as-yet conceived book to be titled after MacKinnon’s essay.

So, what might we imagine if enough people in Albany saw the world more through the lens of what it could be rather than the way it is? Given that the majority of casino gambling revenue dollars come from the minority of gamblers with serious gambling disorders, would lawmakers continue to endorse expanding that predatory business model to increase state revenues? And given the well-established relationship that increased opportunity to gamble produces more people with serious gambling disorders, would they continue promoting state policies that cultivate making people sick to balance budgets? Or, might they instead work to formulate policies that mitigate the interstate impacts of gambling so often used to conscript state residents in a race-to-the-bottom casino economy? I think we know what they’d choose. And there’s also recent precedence for pursing equally important objectives. Consider, for example, NYC Mayor Michael Bloomberg. Regardless of where you come down on the 2^nd amendment debate, Mayor Bloomberg doesn’t just believe in the need for federal gun policies that don’t undermine those of states; he’s a fierce advocate for them in Washington.

Still shooting for the stars you say? How about then just punting for the moon? Albany could acknowledge a false premise it uses to pursue expanding the failed policy of state-sponsored gambling, though I suspect it isn’t spoken aloud there often. It’s the keystone for the arch of my thesis – “we’re desperate; what else can we do if we don’t promote gambling?”

The answer is, plenty.

Continue reading →

“Job Creation” by Casinos not a Net Boon

Posted on March 27, 2013 by cagnyeditor

“ JOB CREATION ” BY CASINOS MAY NOT BE A BOON FOR THE COMMUNITY

Building a new casino complex opens job lines in the locality. This is often trumpeted as “job creation.” Job creation is widely desired at a national level. On a local or regional level, however, it may be more job substitution. Persons newly hired at the casino complex will often have quit another job nearby for what they hope will be better conditions. In a rural area a new casino complex will abruptly have hundreds more openings than there are ready able and willing workers in the community. It will have to import staff, many of whom have left their jobs elsewhere. The check list below refers to a medium-sized non-tribal casino complex in a mostly rural area. Opening and filling job titles novel to a community is not necessarily True job creation, widely desired at a national level, is not necessarily a net benefit to the community or county .

	YES	MAYBE	N0
Construction jobs building casino complex	●
New construction or renovation outside casino complex		●
Local skilled unionized work force enough for construction			●
Non-resident skilled workers needed for construction	●
Most new job lines can be filled by local unemployed			●
Most new lines can be filled by local people who switch jobs			●
Some local workers will switch job to casino complex	●
All casino job lines can be filled by local residents			●
Interest in hiring disabled persons	●
↑sales local gas stations	●
↓ sales local stores and restaurants	●
Net ↓in total property tax roll due to devalued businesses		●
Casino employees in rental housing will pay school taxes			●
Casino will pay school taxes	●
School budget overall definitely bettered by casino			●
Existing stock of rental housing for casino employees good		●
County-wide unemployment definitely decreasedOpinions in this piece are those of the writer, Stephen Q. Shafer MD, MA,MPH and are not necessarily shared by any or all members of CAGNY. Photo of schoolbuses in the fall from flickr commons 5111493374_ca620e7837schoolbuses			●

●

Five Arguments against Legalizing Casinos in NY

Posted on March 24, 2013 by cagnyeditor

The Great Seal of the State of New York

Five current arguments about legalizing non-tribal casinos in New York State in the light of the keystone estimate for casino revenues shown in bold below.

52% of revenues at the average casino are from problem or pathological gamblers. (Grinols and Omorow 16 J. Law and Commerce 1996-97 p. 59) Together, these types of gamblers are 4% of adults, about 7% of casino clients.

PRO: Would send new revenue to Albany without raising tax rates.

CON: Half that revenue would have been diverted, to their lasting harm, from the families and associates of addicted and problem gamblers, or would be proceeds of outright crime.

CON: If quantifiable social costs are considered, raising $1 via tax on casinos costs the private sector twice what it costs to gain that $1 by a step-up in a conventional tax rate. (*Grinols pp. 180-181)

PRO: All or nearly all that revenue would be dedicated to “education.”

CON: Simply allows $$ that would have gone to education to be spent elsewhere in state budget.

CON: Creates a pretext for annual increases. Who’s against “more money for education?”

PRO: Would be regulated to cut out underworld and instructed to “prevent problem gambling.”

CON: See keystone estimate. Casinos get 50 % of revenues from < 7 % of clients. Steering those clients into lasting recovery and halting their replacement would ↓↓ high profit margins. What for-profit business wants to cooperate in drying up the 7% of customers that leave half its take ? No business.

CON: Promoting “responsible gaming” is a sham. Seriously-affected gamblers seldom benefit by government-sponsored treatment programs until terrible damage has come to them and those close to them.

PRO: “Creates jobs.”

CON: May hurt other businesses by taking workers from them (“cannibalization” ).

CON: Importing workers can burden host community (housing stock, schools).

PRO: “Economic development”

CON: Increased local cash throughput ≠ (does not equal) economic development.

CON: Local property taxes promised by casinos ≠ economic development.

Then what is economic development ? “The creation of greater value by society from its available resources” (*Grinols p. 57)

*footnotes refer to Gambling in America: Costs and Benefits by Earl L. Grinols (Cambridge University Press, 2004). Earl Grinols is Distinguished Professor of Economics at Baylor University.

The opinions in this piece are those of the author, Stephen Q. Shafer MD MPH and are not necessarily shared by any or all members of CAGNY. Permission is hereby granted to quote from this piece at any length if the source is cited using the permalink.

“Sorry, So Sorry”

Posted on March 18, 2013 by cagnyeditor

A real-life narrative about Quick Draw

In describing certain measures the nascent Responsible Play Partnership proposes to police gambling by under-age persons, the RPP states tamely “violations could result in fines, suspensions or revocation of an entity’s license.” The verb is “could,” not even “may,” much less “will.” The url for the press release about the RPP is shown below. http://www.gaming.ny.gov/pdf/press_022013.pdf

The following true story instances a shocking lack of oversight circa 2002-2008 of the lucrative New York State Lottery “game” Quick Draw in one small city. It could be entitled “ ‘Regulation’ In Action;” alternatively, “Regulation Inaction.” Considering that legislation is pending as of March 2013 to relax rules about Quick Draw, more stories like this – if not quite as infamous – may be expected unless regulatory policy can get out of the conditional mood.

Summary: a Quick Draw addict with unfettered access to his stepdaughter’s earned fortune gambled away a large part of it “playing” at a favorite bar. The local newspaper investigated how the bar’s owner could have permitted this abuse of trust to run for years. The owner then surrendered the QD license. This ended official enquiry. Three years later he told the Lottery Licensing authorities that the newspaper had maligned him for political purposes. The license was restored without investigation.

From mid-1998 well into 2002 the Speak Easy Bar at 557 Pearl St. Watertown NY had an habitué who played Quick Draw there over and over and over – and over. A real estate agent, he was locally famous as the stepfather of a high-paid supermodel who had grown up in Watertown. Not everyone in town, however, knew he had induced her in 1998 to have him replace the outside financial manager she had recently taken on.

In 2002, after four years of near-daily multi-hour “play” the Quick Draw aficionado started to bounce checks. According to the local newspaper, instead of warning him to stop playing or (within their rights) prosecuting him, the owners of the Speak Easy Bar and of other Quick Draw locales in town borrowed money from their friends to let him keep “playing” until he could cover the bad checks. They of course were profiting from his losses. In fact the owner of the Speak Easy had received a “Top Agent Award” from Lottery in 2001.

In January 2003 the Quick Draw addict told his stepdaughter that he had been using her money to “play” and had lost a lot of it. He was prosecuted for writing bad checks. When he pled guilty to that charge and others in October 2004, his stepdaughter’s losses 1998-2002 were estimated in documents submitted to the court at 7 million dollars, nearly all of her assets. In early 2005 the stepfather was sentenced to prison. After the newspaper ran a story on the bar-owner’s role in enabling the stepfather’s addiction and consequent abuse of entrusted funds, the bar owner “opted to surrender” his Quick Draw license as of March 2005. This ended investigation by Lottery.

In May 2005, the model brought suit against her stepfather and the bar owner. After more than a year, the latter was removed as a party. Later, he changed the name of the bar and applied to get the Quick Draw license back.

Writing in 2007 to the Licensing Director of the NY Lottery, the owner of the Speak Easy Bar said that all published charges of his enabling the gambler’s addiction after bad checks began were false. His letter, published in the Watertown Daily Times of May 18 stated “I cut him off [from Quick Draw at the Speak Easy].” He did add a sort of apology (quoted below) which implies in the passive voice that someone had failed in a duty to “cut off service.” This contradicts his assertion that he had refused to allow the habitué to continue Quick Draw at his establishment.

“Clearly there is a lot to be learned from such an incident, including the need to impose restraint on customers in the same way we would cut off service of alcohol to the obviously compulsive drinker. There is also a need for those who sell tickets not to get caught up in playing such games. I understand that. “

After no investigation Quick Draw was re-installed at 557 Pearl Street in early May 2008. Just ask in town for “The Mayor’s Bar.”

Notes: For a description of keno (the generic name of Quick Draw) go to http://preview.tinyurl.com/awf3yvb

The opinions in this post are those of the writer, Stephen Q. Shafer MD MPH, and are not necessariy shared by any or all other members of CAGNY. Permission is given here to quote from this piece at any length as long as the source is made clear using the permalink address above.

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Buying Silence

Invest in Recovery

Assets for Sale

Negative Expected Value

Two Downstate Racinos Are Downstate Casinos Now

Robbing Peter to pay Paul

The Albany Gambling Diet

“Job Creation” by Casinos not a Net Boon

Five Arguments against Legalizing Casinos in NY

“Sorry, So Sorry”