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.