Five Arguments against Legalizing Casinos in NY

 

The Great Seal of the Sate of New York

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.

 

No Place for Casinos

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     Every week CAGNY (courtesy of our anti-gambling allies  at NYCF) distributes a one-page handout to the offices of all legislators.  In the  bulletin to legislators of March 5 (posted last week on this site as “Central Statistic”), we stated that it is the practice of the casino cartel, which gets  35-50%  of  its profits from out-of-control gamblers,  to foster  irresponsible gambling while pretending not to.  To learn how the fostering is done, read Addiction by Design (Natasha Schull, 2012, Princeton University Press). 

     This post, which will be the  CAGNY bulletin for March 12,   is not on that crucial topic.  It is  about the façade that gambling promoters (private and governmental) put up to look sincere and caring. Part of the act is token sums for research (e.g. to National Center for Responsible Gaming); also for secondary* and tertiary**  prevention to  good, small  advocacy agencies like the National Council on Problem Gambling.  [Most tertiary prevention in this country is provided by GA and Gam-Anon, both all-volunteer organizations.  Neither accepts any outside support. ]

     In New York State most of the meager (near-zero, now) funding to prevent problem gambling has come from legislative appropriations to agencies like Office of Alcoholism and Substance Abuse Services (OASAS).   Lottery and tribal casinos don’t contribute directly to statewide treatment and prevention. 

     If the constitution gets amended,  a legislator will surely  ask on behalf of OASAS and the NYS Council on Problem Gambling that some money coming  to the state from the new casinos go to “treatment and prevention of problem gambling.”   Likely some would, at least for a while.  How much, who knows?  Consider, though, that the revenues projected from casinos for 2016 have a much nobler-sounding destiny than treating gambling addicts.  They are supposed to be 90% “to support education”  and 10% to relieve property tax burdens.  If legislators must choose between allocating (say) $5M of the projected $150M  to counseling for problem gamblers or to “education,”  the addicts and their families will lose.  They always have.  Massachusetts announces intent to spend more than any other state. http://preview.tinyurl.com/ckkhy8p  Good luck, Bay State!

     Even if a huge revenue stream dedicated forever to treatment and prevention of problem gambling could be legislated, it would still be too little and too late to undo the mayhem of gambling. When do addicts enter treatment if not compelled by a judge?  When  they’ve  lost  everything.  Lives can be improved by treatment of  problem  gambling, but the clock does not run backwards.

     The best prevention of problem gambling is primary  prevention . A practical facet of this is an ecological strategy — no new casinos.  We have too many “slots”  now.  Vote  NAY on second passage.

     * This writer defines secondary prevention as keeping someone experienced in gambling who is not yet a problem gambler from turning into one (e.g. “Responsible Gaming” education, HOPEline signs). **Tertiary prevention is defined as steps (e.g. private counseling with or without 12-step program) to begin and sustain recovery from situations that meet at least some criteria for pathological or problem gambling.

    The opinions in this post are those of the writer,  Stephen Q. Shafer MD MPH,  and do not necessarily reflect those of any or all members of CAGNY. Permission is granted to reproduce in whole or part while acknowledging the source using the permalink above.

Betting on Sports: not Victimless by a Long Shot

futbol from flickr cc4138211812_9c2f66efbd

futbol from flickr cc
4138211812_9c2f66efbd

 

Comment on a column by James Surowecki  in the New Yorker Feb 11 and 18 2013. I wrote to the magazine on Feb 9.  They have not run it. 

James Surowiecki (Feb 11 and 18) argues that governments should get a piece of the action from betting on sports, now a “crime” with no “real victims.”  In truth there are millions of  victims.   Nine million adults in the U.S. are pathological or problem gamblers.  If  10%  are primarily involved in sports betting,  that makes 900,000 such.  Around each are (say) eight family members or close associates victimized by the gambler’s behaviors.  Some have had their savings diverted; some have had their deepest needs neglected or their bodies abused.  Some have been murdered,  or had their lives torn up by the suicide of a gambling parent or spouse.  Not even counting the gamblers,  then, there are millions of victims.  It is woeful  that sophisticated commentators ignore them.

When government “regulates” gambling to take  the cut that used to go to bookies and bagmen, it is the boss of  a once-illegal exchange that still gets half its profits from hurting innocent (if sometimes co-dependent) people while  it exploits loose-cannon gamblers.  Worse:  always needing revenue, government must grow that now-“legal” exchange.  It must foster new pathological and problem gamblers to boost revenue or at least maintain it by replacing those now out of  the  life.

Proponents of Government-in-Gambling note  that tobacco and alcohol are regulated, Pigovian taxes collected.  “How is ‘regulated’ gambling different?” they ask.  This way: Most governments do not encourage smoking on the grounds it will make the government richer.  They do not urge more alcohol consumption to spare the virtuous a tax increase.   They do not advise parking by hydrants or driving 90 mph to raise more funds.

They do push big-time predatory gambling, hard.  That’s the  difference,  and it is a social injustice.

 

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“Lottery for Education” Steals a Good Name

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The New York State Lottery generates revenue to government outside the tax stream that goes directly “to education.”  This special fund, however, is not as most people thought in 1966 it would be, to enhance “education” above subsistence level.  It’s more like a reserve called  every year.  Used thus, it frees for  other expense sectors (e.g. pensions, welfare) money from taxes put into the General Fund that would have gone to “education.”  This can be called “total budget fungibility.”   

Compare government-sponsored lottery to the unpopular revenue-booster  of  increase in conventional taxes:  it looks to the average tax-payer like finding money in the street.  It is not.  It is socially unjust in taking money disproportionately from the less affluent.   It is two or three-fold  more expensive when hidden quantifiable socioeconomic costs are factored in.  Big-time predatory gambling like NYSL also leaves in its path untold harm that cannot be quantified, including family breakup and suicide.   In 2013 we face the spectre that newly-legalized casinos will be hailed, like Lottery, as benefactors to “education” and therefore to NY residents.   They would  be wolves in sheep’s clothing.   Continue reading

Letter to Legislators about Proposed Amendment

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The letter below was written to be distributed to all NYS legislators on the morning before the Governor’s State of the State Message.  The three casinos “upstate”  he projected in the SOSM   we can see would create fewer gambling addicts than (say) five in the Metropolitan area.  This “phase I ” scenario, however, does not rule out a second phase with  four casinos south of “upstate.”   to compete with casinos in neighboring states.  Nothing is off the table.  The Governor’s discussion of the amendment  was a trial balloon..  The amendment is a terrible idea, but if it is to go  to referendum the Governor and his appointees should not be calling the shots.

 Dear Legislator:                                                                                                          

Even if new to the Legislature, you don’t need an alert or reminder to know that soon you will consider in committee or on the floor “second passage” of S06734.  Enacted on March 14, 2012, this was a proposal to amend Article 1, Sec. 9 of the NYS Constitution to allow “no more than seven” casinos to be built “as prescribed by the Legislature.”  If a like bill is passed by both chambers in 2013, the proposal to amend will be put to public referendum.

 Coalition Against Gambling in New York (CAGNY) believes this amendment would create tens of thousands of new addicted gamblers and problem gamblers.  The figures for this forecast can be seen and downloaded at    http://tinyurl.com/aas2tew The harm to each person so affected would be multiplied by eight or ten times as family, friends, and associates are inextricably caught up in the misery…. or have to flee it!

CAGNY observes  that the Governor, who urged this amendment early in 2012, has ignored the collateral damage from “recapturing,” by new in-state casinos, gamblers who have been going out of state.  In not acknowledging  this collateral damage, he says in effect that thousands of NYS residents are expendable.  Do you believe that too?

You will hear over and over that “the State needs the money.”  CAGNY does not deny that the State needs money.  We don’t deny, either,  that governments at times  lay out money putting  lives at risk—soldiers and first responders, for example.  We do hold that government should never plan a revenue-raising strategy that exploits illness and misery in its people !  Government  should never on purpose enable life-threatening addictions!

 We don’t know when the vote will be.  In the days to come, however, we will return to your door often with more handbills that show why a “no” on second passage is a vote for truly good government.  We’ll try to meet with you in person. We welcome your questions and your requests for detailed background.  Feel free to call 917-453-7371 or e-mail our Chairperson at sqs@columbia.edu.

States Playing “Race to the Bottom” with Casinos

Image Source: (Syracuse Journal, September 18, 1891) “A romanticized cutaway sketch of an early Erie Canal packet boat.”http://stagecoachdays.blogspot.com/

That the amendment proposed to the NYS Constitution for 2013 would greatly increase the occurrence of problem gambling and gambling addiction in New York is a strong argument against its utility.  Another is that it would if passed set neighborhoods and other community levels against each other in hostile and envious competion  where everyone loses in the end.  This can be framed as a Prisoner’s Dilemma, a staple in game theory.

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Opposing the amendment is not “prohibitionist.” It is protective.

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Photo by Alain Maury,  found through Creative Commons

 

 

 

 

On  January 2,  2013 I told a friend about the petition started recently by A.K. France,  Vice-Chairperson of Coalition Against Gambling in New York (CAGNY), against the proposed constitutional amendment that would  allow < 8 new commercial casinos in NYS.   I sent the link by http://tinyurl.com/cj2v5bj.  It was disappointing to get the following response by e-mail:

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Is This An Acceptable Way to Govern?

 

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Editor’s note: This short essay by Joel Rose, Founder and Chairperson of CAGNY, was  distributed to members of the press in Albany May 29, 2012 and to legislators visited  by CAGNY members May 29-30.  It  reviews the  abuse of due process by which the legislature has handled certain bills related to gambling.  The March 14,  2012 vote for “first passage”  is a case in point. 

In his state of the state message this year, Governor Cuomo noted that “It’s time we confronted reality. It’s not a question of whether we should have gaming in New York — the fact is we already do.” He went on to urge a constitutional amendment so that “we can do gaming right,” whatever that means. Notice that gambling promoters always use the term gaming rather than gambling to try to create the impression that they are promoting something innocuous.

So the merits of the pro-gambling case come down to this: We’ve already used every trick in the book to get around the law in order to have gambling in this state. So now, let’s just take the gloves off and remove any remaining restrictions on casino gambling.

We note that New York been so successful in finding ways to allow gambling that according to its own study, New York already leads the nation in annual revenue from gambling. But no amount of gambling will ever be enough. If casinos are allowed, the argument will then turn to sports betting and Internet gambling.

Governor Cuomo and Speaker Silver have already let it be known that they do not want any casinos in Manhattan. They just want access to the revenue to be derived by putting them everywhere else in the state. If this activity would be beneficial for upstate, why not enjoy its benefits everywhere in the state?

So the Legislature, performing what passes for due diligence in this state, passed this amendment in the middle of the night. There were no hearings, so opponents were never able to testify. In fact, there was no debate. Article III, Section 14 of the Constitution specifies that every bill be held for final passage for three legislative days so that legislators may have time to read it and understand its ramifications, unless the Governor issues a “message of necessity,” indicating the reasons why it is necessary to waive the three-day requirement. Of course, governors routinely issue such messages, and legislatures routinely meekly accept them. And that was done in this case.

Now here we have a bill which could be passed anytime during this legislative session, with final passage not possible before January 2013. How could it possibly have been “necessary” to vote on it right away?

The final indignity to good legislative process: in the Senate, the Democrats, angered by the extreme gerrymandering of the majority redistricting plan, walked out, all except for four “independent” Democrats who generally vote with the Republicans, and were absent for all the votes taken that night. Thus, this important vote on casino gambling was taken with only 36 of the 60 Senators present.

So our question to our fellow citizens, and particularly to our legislators, is this: Is this an acceptable way to govern?

The opinions expressed in this piece are those of the author, Joel Rose, and do not necessarily represent the opinions of any or all other members of CAGNY.

 

New Commercial Casinos Will Mean Thousands of New Gambling Addicts

Adverse Impact of New In-state Casinos on Prevalence of Pathological and Problem Gamblers in New York State

by
Stephen Q. Shafer, M.D., M.A., M.P.H.

Summary: Up to seven new commercial casinos would be allowed by a proposed amendment to the State Constitution, risking the creation of eighty thousand new gambling addicts and two hundred thousand new problem gamblers in New York State. The quantifiable costs related just to these new out-of-control gamblers would far outweigh the tax revenues New York State would see from “recapturing” gamblers who  had been crossing state lines and also taxing new in-state casinos on their take from new gamblers. The number of pathological (addicted) gamblers and problem gamblers created would exceed the number of new hires at the casinos by a factor of ten or more.

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