NY Legislature has no power to authorize casinos

First US Constitutional Convention

First US Constitutional Convention

 

Memo from Cornelius Murray, Esq.    20 June 2013   sent earlier today to journalists interested in New York State government

Re Upstate New York Gaming Economic Development Act of 2013

 

Art I section 9 of the Constitution CURRENTLY states that, except for circumstances not pertinent here, no gambling shall be AUTHORIZED or allowed and the Legislature is mandated by the very same provision in the Constitution to “pass appropriate laws to prevent offenses against any of the provision of this section.”

Yet the bill that will most likely pass the Legislature tomorrow does exactly the opposite. It purports to authorize such gambling with an elaborate regulatory scheme.  To be sure, the last paragraph states that it will become effective only if and when the Constitutional Amendment passes.  But it hasn’t, and until it does, the current sitting Legislature can’t pass a bill to take effect in the future on the supposition that the Amendment will be approved by the voters in November.  Don’t get me wrong.  I’m fully cognizant of the fact that a Legislature can pass bills to take effect in the future and does so all the time.  But that occurs where the Legislature has the power to act on a given subject to begin with.  Here it has no such power.  The Legislature can get into the business of authorizing and regulating casino gambling only after the People authorize it to do so, which won’t/can’t happen – if at all—until November.  If and when it does, then the Legislature would have the power to act.  But it can’t put the proverbial cart before the horse.  The Legislature has no power to act to authorize gambling currently prohibited by the Constitution.  It is – at least I hope it is – axiomatic that a Legislature can only exercise such power as the People give it.

Imagine if you will that the Legislature in its infinite wisdom (don’t laugh too hard) decided that slavery ought to be reinstated and passed laws now to regulate it which would take effect in the future once the 13th Amendment to the US Constitution and the corresponding prohibition in our State Constitution were repealed.

Cornelius Murray, Esq.  was lead counsel for the plaintiffs in Dalton v. Pataki

http://www.governor.ny.gov/sites/default/files/documents/GPB-33-UPSTATE-MEMO.pdf is a 4-page outline of Program Bill 33.  The whole bill is more than 220 pages

The picture shows the first US Constitutional Convention, not a NYS one.  credit Robinphillips.blogspot.com

Buying Silence

    

West Canada Creek 8648883400_05b7c72b4bwestcanada

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.

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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

Dawn over Hudson River 12/25/2010DIGITAL CAMERA

 

 

 

 

 

 

     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.

The Central Statistic of Casino Profits

The_Goose_That_Laid_the_Golden_Eggs_-_Project_Gutenberg_etext_19994.jpg  from Wiki

The_Goose_That_Laid_the_Golden_Eggs_-_Project_Gutenberg_etext_19994.jpg from Wiki

When Governor Cuomo in 2012  proposed  new commercial casinos he said they would need regulation.  Casino promoters can’t dismiss the concept,  which  has several aims.  One specific to casinos is to mitigate gambling addiction and problem gambling.*  Promoters don’t deny these  can be outcomes of   “gaming.”  Another goal of regulation, applied also to the banking or securities industries, is to protect investors and tax-collecting entities against in-house predatory practices, organized crime and tax dodges.

Casino owners want regulation of how they handle consumers and accounting about as much as do big banks or brokerages: the least possible.   In any business, regulation hurts profits by constraining practices (say, payday loans) and limiting externalities.  For example, a company no longer free to discharge waste into a waterway faces new costs; raising prices may lose it business if competitors don’t raise theirs too.   Casinos are uniquely  intent on profit for its own sake. For them, that’s the be-all and the end-all.   Typical  industries, even those as controversial as “Big Pharma” or “Big Oil” make a product of real use to someone.  The casino business has only one tangible product,  in which it cannot take pride:  addicted and problem gamblers.  That product fuels it.

The central  statistic  of  casinos:  a  large proportion  (Grinols and Omorow** estimated 35-50%)  of  the  gross returns after winnings are paid out comes from compulsive and  problem gamblers — about 4% of the adult population — who comprise maybe 12.5%  of casino users.  Most of that 35-50% is from addicted gamblers.   From this statistic comes

The central dilemma :  if  casino owners  acted effectively to steer  into lasting recovery all pathological and problem gamblers in their sphere and  to prevent the creation of new ones,  profits would  drop by at least 35%.  How would that play on the bottom line?  Not well at all.

Resolution: publicly express concern on problem gambling but make it go on  under a façade of “prevention”  methods structured to fail.   Accede to customized and toothless “regulation” that won’t interfere with the real business.

Recall the goose that laid the golden eggs.  Casinos do not lay the golden eggs their promoters claim; they are gilded base metal.  Whether the bird’s owner knows this or not,  whether  he stores or markets the eggs,  the owner (assuming  he has more common sense than the yokel in the story, who killed it) will cosset the bird.  He won’t let  anyone  change her diet or re-house her.  To an owner eager for  eggs that look golden, regulation threatens the health of  the goose,  jeopardizing  her output.

Legislators weighing the proposed amendment in New York State to legalize new casinos must ask three questions. “Would those casinos knock themselves out  to profit 35%-50% less than many others do?” That’s obvious: No

“Do I really believe NYS can and will properly regulate casinos if they don’t want it?”    Someone very credulous might say so.  No one else will.

“Is it fair to NYS residents to commend to them, by an “Aye” on second passage,  a sham I don’t believe in.”  The response to that should be a third NO.

*These two categories of  “disordered gambling behavior”  are distinct.  About 1% of North American adults are past-year pathological (addicted)  gamblers, another 3% or so past-year problem gamblers. Sometimes for brevity (not clarity) the two categories are lumped into “Problem Gambling.”

** Grinols, Earl L. and J.D. Omorow (1997) “Development or Dreamfield Delusions? Assessing Casino Gambling’s Costs and Benefits.”   Journal of Law and Commerce 16, 1, 49-87.

The opinions are those of the writer, Stephen Q. Shafer and do not necessarily reflect those of all members of Coalition Against Gambling in New York.  Permission is granted to quote from this post at any length or to reproduce the entire post as long as the source is cited using the permalink above.

 

 

 

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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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CAGNY’s Message to Legislators on One Page

 

Goya: El Sueno de Razon

Goya: El Sueno de Razon

      When CAGNY members visit legislators in Albany on Feb 5, here is what we will say about the Governor’s proposal  to amend the state constitution (Article I sec 9 and allow up to seven new commercial casinos: 

     Half  the revenue of casinos and large lotteries is from pathological ( addicted) and problem gamblers.  They  seldom own what they drop.  It has usually been diverted from someone else (e.g. spouse) who has equal or better right to it (e.g. mortgage payment).  These are  “abused dollars.”  Some of the money lost by these gamblers comes from outright crime, a later recourse for many pathological gamblers beyond taking from intimates or dependents  who might not prosecute.

    Thus half the revenue government gets from gambling is passed to it from gamblers’ losses,  staked by deceitful diversion or outright thefts from someone other than the gambler.  The multiplier for “other”  is 8-fold.  For every pathological or problem gambler, 8 other people, often  children,  are deprived of something valuable, not limited to money.

    When government facilitates or sponsors gambling to balance the budget,  it exploits not only the dis-control of  some  gamblers but the miserable situation of their families and close associates.  For government to overlook  this  injury to persons —including children— around the gambler treats  them as expendable.

    Even if someone thinks gambling addicts deserve to live damaged lives or to self-end them, he or she cannot wish the same fate on the gambler’s near and once-dear.  More than dollars are abused.  Domestic violence, physical, and emotional injury are common in the circles of gambling addicts and problem gamblers.  Suicide harms, not one person, but many.

    Fear, distance, abstraction can make other humans expendable to the best of us.  The story should be different, however, when the people to be made expendable are not remote and when the people doing the expending are in our state government.  We who oppose the constitutional amendment  say “No  New Yorker is expendable.”  

                                               VOTE  NAY  ON SECOND PASSAGE

    The text of the amendment of Art I §9 that would go to referendum must be the same as S 6734.  Implementing language must be approved by the legislature, though who will draft it and when is not clear.  A vote for second passage gives no security to a legislator or to the voters at referendum on these key points, any or all of which could be changed in a later session:

  • Timetable of building the “no more than seven” casinos
  • Locations and size  Could a new casino double its gambling floorspace three years later?
  • “Home Rule” What level of social organization (e.g. village, town, county, state) will make decisions about same or different levels close by (e.g. village inside a town).  Who speaks, who votes?
  • Rate for property tax and for tax on casino income payable  to state and sub-state levels.
  • Funding for “prevention and treatment.”  

    The sleep of reason brings forth nightmares:  a worst case scenario could put five or six big casinos in or very near the Greater Metropolitan Area, leading to eighty thousand new gambling addicts  and 200,000 new problem gamblers.  Or, think of this:  Would it be socially just,  if all the town boards in a county but one voted against a casino,   to  put one in the lone holdout township? 

                                         VOTE  NAY  ON SECOND  PASSAGE

 

Albany and Art of Deception

Albany and Art of Deception: From the Land Where No Means Yes

by David Colavito

"Peering over the edge" Flickr CC

“Peering over the edge” Flickr CC

Question:  When can state government promote responsible policies without leveling with voters?

Answer:  It can’t.

Question:  Has Governor Cuomo leveled with New Yorkers about his proposal to amend the state constitution to permit casino gaming?

Answer: No

Beyond special interests and hidden agendas, it’s simple.  Public policy initiatives designed to mislead the public aren’t responsible, and when they’re promoted, hang on to your wallet, because you can be sure that same public will eventually be picking up the tab.

In his 2012 state of the state address, Governor Cuomo rolled out his economic development plan that featured, among other things, his proposal to amend the New York State constitution to permit casino gaming.  He implied that those who question whether we should be in the gaming business are the equivalent of delusional because, as he put it, New York is already in the gaming business.  He referred to horse racing and video lottery terminal locations throughout the state as bedrock justification for his assertion.  He waxed, perhaps not eloquently, about the benefits casino gaming would bring to the Empire state.  And he cited, as common-sense, the need to rethink how our state manages gaming, if it’s to stem losses of potential revenue flowing like water out of New York into neighboring casino-permissive states in what might be thought of as a casino siphon.  The Governor came as close to saying as one could without actually saying it: New Yorkers are fools if they don’t get with his program to legalize casino gaming in the Empire State.

And so it was that Mr. Cuomo chose to bury the lead, raising the same tired red flags proponents of similar proposals hope go unnoticed.  It was deeply disappointing for people who took seriously the commitments to transparency and disclosure he’d laid claim to throughout much of his political career.

 Casino gaming is fiction, because casino gambling isn’t a game.  It’s the antithesis of a game, because games aren’t reliant upon participants incurring personal and economic hardships, an immutable aspect of betting against the house.  Medical and law enforcement professionals have long acknowledged that gambling disorders are real and incur substantial costs for society, just as substance abuse and tobacco related diseases do, though you’d never know it from Mr. Cuomo.  And although federal and state governments have for decades derived substantial revenue through taxation on tobacco and alcohol products, they aren’t in the business of promoting either.  But this isn’t about ideological purity; it’s about Mr. Cuomo playing it straight with New York voters, the same ones he needs to ratify changes to the state constitution in order to have his way.  So it’s also about what paths he’ll travel to get his way.

Casino gambling epitomizes wagering against the house, where the house’s odds of winning ensure everyone else must eventually lose, and as every casino owner knows, that’s a very different paradigm than Saturday night card games among friends.   All this isn’t to suggest everyone entering a casino becomes addicted to gambling, anymore than it’s to suggest everyone consuming alcohol becomes an alcoholic.  What it’s saying and not just suggesting is trained professionals tell us gambling disorders are real, and they come with hefty costs to our communities that can greatly exceed benefits.  And if this was intended to be a scholarly work it would also cite documentation of the disproportionately high level of casino revenues obtained from people with serious gambling disorders, sick people in need of help not exploitation from state government.  It’s a predatory business model, because in a variety of ways it arguably cultivates those disorders to facilitate preying upon those so afflicted.  Sound familiar?  It should, at least for those of sufficient age to recall the earlier days of lawsuits against cigarette manufacturers, but with one important twist: the government was party to some of those smoking related lawsuits.   

So appreciating the first red flag raised by the governor is to appreciate gaming for what it is, his euphemism of choice intended to inoculate voters against making an informed decision.

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What We Didn’t See Is What We Got

                                          What We Didn’t See Is What We Got

 

8410159320_9203082701I recently posted on  how the NYS Lottery has made itself a role in balancing the State budget. The role is supporter of “education.”   The Governor thinks a like role will make acceptable to the voters the  new casinos he wants as one of his legacies to the State.  Voters know more about the downside of casinos in 2013 than we did about the future of State Lottery in 1966.  That makes for a harder sell. The magic words “for education” could still charm it through.  This 700-word essay has two parts:  (1) a history of  amendments in Article I § 9  starting with the one in 1966 that launched NYS Lottery (2) figures on  NYSL  as of  FY 2012.

             Between 1967 and 1993 there were 485 bills introduced to the legislature to amend Article I, an average of 18/year.  This made Article I one of the most targeted articles. Almost half the proposed changes were to do with gambling, which is in §9 but is not the entirety of that section.   Only two proposals in those 18 years to amend Article I passed both chambers in two legislatures.   Both concerned “charitable” gambling; both were approved by referendum.  In that same era, a total of 61 (1.4%) proposed amendments on all topics passed both chambers in two successively-elected legislatures .  Forty-one (67%) of these 61 passed in a referendum.  

Benjamin and Cusa* mention a total of six amendments to Section 9 between 1939 and 2001.  I reviewed those between 1966 and 2001 in McKinney’s.

1939 pari-mutuel (OTB legalized 1970)

1957 charitable gambling with many restrictions

  • 1966 State Lottery “implementing language” followed
  • 1975 amendment of wording on charitable gambling
  • 1984 further rewrites about wording on charitable gambling
  • 2001 small change in § 9 “fireman” to” firefighter.”  Many such small changes throughout entire Constitution, most of which were to replace gender specifying pronouns or titles.

 

*An excellent article on the amendment process for the years 1967-1993 is by Gerald Benjamin and Melissa Cusa  “Amending the New York State Constitution Through  the Legislature” pp 55-73 at the following web site:

http://www.rockinst.org/pdf/government_reform/1994-nys_constitution_a_briefing_book.pdf    

         As of now, the NYS Lottery operates about 13,000 virtual slot machines at nine racinos (Hamburg, Aqueduct, Monticello, Saratoga, Yonkers, Finger Lakes, Vernon Downs, Batavia and Tioga).  Chapter 383 of the Laws of October 2001 allowed the State Lottery to join with Mega Millions (2002).  In 2010 Powerball, another multistate lottery with stupendous prizes, was allowed.  Both these events have very frequent drawings, not daily, with the jackpot rising when there is no winner yet.  Two  other Jackpot “Games” wholly under State Lottery are Lotto (draws not daily, prize rises until winner known) and Sweet Million (draws not daily,  fixed prize $1M). There are four Daily “games”  Take 5, Numbers, Win 4 and Pick 10.  There are at least 8000 Quick Draw settings, with a result every 4 minutes,  23.5 hours a day.  There are scratchoff   instant games for bets ranging from one dollar to thirty dollars.  Here are the returns for FY 2012 (thru March 31) for each category. Column 2 and 3 in $millions.

Category                                Intake               “To Education”          % “To Education”

Jackpot 923 395   43
Daily 2010 808   40
Instant 3579 816   23
Social (Quick Draw) 502 156   31
“Casinos” (Video Gaming) 1426 696   48

 

      The first four rows, inexplicably referred to as  “Traditional,”  returned to the Lottery 7.01 billion   before prize payouts.   Most of the return went to prizes.  “To Education” went 2.10 billion, or 31% .  The racinos (AKA “Video Gaming Casinos”) saw a total amount bet of 19.48 billion, with a net of  1.426 billion after payouts to  bettors.   “To Education”   went 696 million (48%). Because these establishments must by law contribute to horse racing and to the support of the privately-owned tracks at which they are situated,  slightly less than half their net passed “to Education.”   In summary, Lottery as a whole sent “to Education” 2.89 billion in FY 2012.  This figure will likely be more in FY 2013, with Aqueduct’s share up and that of Yonkers,  down.

 http://nylottery.ny.gov/wps/wcm/connect/2aaf628044bec0b08c5d8c3b1ada7a32/YearEndReport12.pdf?MOD=AJPERES&Annual%20Report

Opinions are my own, do not necessarily relect those of other members of CAGNY.   Photo from flickrCC “scratchoff cards”

“Lottery for Education” Steals a Good Name

6007594833_b6983433f0rockhorse photo FlickrCC 6007594833_b6893433f0rockhorse.jpg 

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