“Poison pill” in Upstate Gaming Act of 2013

5329333422_f79c211100_m alien            Surrender ! Resistance is futile !

The upcoming referendum on whether to amend the NYS constitution and allow “up to seven casinos as prescribed by the legislature” has been subverted by  Governor Cuomo, turned into  an  ultimatum  to all who oppose the  amendment for its expansion of  predatory gambling.  ” Heads I win, tails you lose.”    New Yorkers, even those who favor the amendment,  should be  horrified.  This behavior  belongs to a despot or a cartoon  alien invading the planet, not to a Governor who proclaimed he wants  the people to say yes or no to amending the constitution.  What  happened ?  

Simply put, if the amendment fails, Lottery gets carte blanche to expand instead.   The “Upstate New York Gaming Economic Development Act of 2013,”  passed on 21 June as S 5883 (same as  A 8101), provides in section 32 a. (3)  that if the amendment does not pass referendum, Lottery is authorized to operate  an unspecified number of new Video Lottery Terminal (VLT)   facilities of unspecified size,  not necessarily at race tracks.  The VLT facilities provided for in this  hedge plan would go into the three “regions” of “zone 2” that are not excluded by compacts with Indians, viz. Catskills + Hudson Valley,   Eastern Southern Tier and  Capital Region.  An article originating with AP in Albany  http://online.wsj.com/article/APbabc9a4fefdc488cb8a30eb9ec800e12.html    cites possible numbers (three or four upstate) and possible sizes (up to five thousand VLTs each).  These numbers are not in the bill, but were softly confirmed by a spokesperson for the Governor on June 19. 

Thus a successful  fight against  the amendment would be punished by the imposition of a gambling system probably no better  for New York’s people than  “up to seven” casinos.  [There is no reason to think Lottery would stop at four new slot barns; that was a trial balloon on one day in June.]

The hedge plan unveiled in June was probably  mostly  a “poison pill” for two readily identifiable groups to which  the amendment could bring damaging competition.  One was the Seneca Nation, which as of June 12 was  not yet  “in good standing.”  The next day, however,  the Nation  moved into that status. http://www.indianz.com/IndianGaming/2013/026500.asp    Now assured of no new competition in their territory,  they would cease to  threaten  the amendment.  The  pill was no longer toxic to them.  The other group, the  New York Gaming Association (the racino lobby)   had come out on June 10th  against the Governor’s Program Bill, as it was then called.  [To see that press release, which on the web site is undated,  go to their web site and click on press releases .  http://www.newyorkgaming.org/Home.aspx    ]  NYGA  voiced fears that new casinos would take away 85% of their action.  They  were quickly placated with changes ensuring that the horse industry would not take a loss in  the large (> $200 million last year) income stream it counts  on from racino  VLTs.   Any new casinos  would have to pitch in to keep parity.  Not long before June 21, the NYGA reversed its stand in a second press release [also on their web site, undated].

The “poison pill,”  in Section 32 was made by developments around mid-June less baneful  to the two richest groups that want predatory gambling in NYS but not competition.  It still  had   had potency as of voting day, June 21.  It could  deter opposition to the  amendment  that might spring up if any of the May-June agreements with Indian casino operators fell through before Election Day.  On out-of-state casino interests, however, it would probably have little effect.    Though expected by many to work [under false flags]  against the amendment, these groups  would would not see section 32 as virulent to them.   They  would surely prefer that if NYS must  boost its  predatory gambling it go with slot barns, not  full-scale casinos. 

The constituency to which the poison pill is most bitter and potentially paralyzing is opponents of predatory gambling.  We are perhaps collateral casualties of the Governor’s tactics  to neutralize, or actually turn,  rich profit-seeking opponents of the amendment . Or (this may be  folie de grandeur)  the Governor  sees us as a threat to his objective, a threat that needs to be squashed.   We don’t need to know.   In either case,  the Governor and those who craft his bills  have done  their utmost to make the referendum meaningless.      Instead of a plebiscite on whether to amend the constitution it has become a double bind: casinos or  VLT barns.    See the New York Post http://www.nypost.com/p/news/opinion/editorials/gambling_man_FRWmSBGiGVE5KXK1w58IcM

The  VLT  barn  hedge plan has been latent since September  2001, when the legislature  at the urging of Gov. Pataki  authorized   thousands of  VLTs  at racetracks as  “racinos.”  In the words of Gov. Cuomo (May 9 press conference)  “The racinos were created to get around,  frankly, the existing state law and they were in many ways created as a loophole, but for all intents and purposes they are a casino.”     Why VLT proliferation was not Gov. Cuomo’s plan  A  for gambling expansion is for speculation.  Let’s suppose that in early 2012 he truly  believed  (unlike us) that casinos bring “economic development”  that VLT barns would not.  Let’s credit him with a desire to play by the rules and respect the Constitution,  as long as he looks like winning. This wish foundered in June 2013 when polls showed his approval rating going down and no clear margin of victory for a future amendment.   Time for the ace in the hole.  

Coalition Against Gambling in New York will oppose the amendment even if the hedge plan in section 32  forces  an odious alternative to casinos.  If the amendment fails as it deserves to, we and other groups allied against predatory gambling will seek legislation  to amend  section 32 and defang it.

The opinions expressed herein are those of the writer, Stephen Q. Shafer and do not necessarily reflect opinions of all members of CAGNY.  Permission  is granted to reproduce this text in whole or part as long as the permalink attached is cited.

Assets for Sale

Peering over the Edge Flickr CC

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

 

sheep

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

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Two Downstate Racinos Are Downstate Casinos Now

spin

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).

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Robbing Peter to pay Paul

St Paul's  from flickr 5172661797_d7003e47a8_m

St Paul’s             flickr 5172661797_d7003e47a8_m

5639243328_ce8f602a7b_mStPeter's

 

 

 

 

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

albanydiet  The Albany Gambling Diet

Thoughts on Healthier Eating

by

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 2nd 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. 

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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.

 

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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Forgotten collateral damage from government-in-gambling

from Flickr CC

from Flickr CC

What do the fourteen vignettes below have in common?  Can you guess  without the links?

1)      A 42 year old man in Michigan came home, fatally shot his pregnant wife and  their  three  children, then  himself.  http://abcnews.go.com/US/story?id=94936&page=1

2)      A father of two in VA gunned  down wife and son, shot his 11 year old daughter in the head, then killed himself .   Daughter described events (“bad dream” ),  died 3 days later .  http://www.highbeam.com/doc/1P2-671609.html from Washington Post

3)      Father  in NV  left  7 year old daughter  in arcade under eye of her 14 year old brother.  She was raped and strangled in a bathroom by an 18 year old male. http://articles.latimes.com/2000/jul/07/local/me-48999

4)      An Iowa man just-divorced stabbed to death his ex-wife,  an executive at Arthur Anderson in Chicago.  He then drove off  with  their 7 year old daughter (seat-belted), swerved into oncoming truck.  Both were killed.  http://preview.tinyurl.com/bah4e8r

5)      In St Louis, a woman in her  late 20s was not at home when her 11 children died in a house fire.  http://preview.tinyurl.com/afjjftg

6)      Illinois woman reported death of 7-week old daughter due to SIDS, claimed $200,000 life insurance she had taken out on baby.  Fifteen months earlier another daughter had died at age 17 days.   Mother  had stated  SIDS.   http://articles.chicagotribune.com/1998-03-07/news/9803070058_1_insurance-fraud-dina-abdelhaq-sids

7)      Middle-aged Mississippi woman in good neighborhood shot to death husband and her mother while they slept.   http://articles.chicagotribune.com/2002-04-07/business/0204070020_1_neighbors-home-murder

8)      A  natural gas explosion in a house in Indiana when its occupants were out of town killed the couple next door and blew up five houses. tinyurl.com/cztdo5u

9)      A Rochester NY man strangled his fiancée when they quarreled the day before her bridal shower.   http://www.highbeam.com/doc/1G1-157155335.html

10)   A 7 year old boy drowned in backyard  swimming pool at a day care facility.  The operator was off  the premises. http://articles.philly.com/2013-02-15/news/37102173_1_day-care-center-day-care-staff-members-day-care-office

11)   A Philadelphia grandmother was fatally stabbed and her 10-month old grand-daughter smothered by a 26 year old computer whiz who lived in same apt building.  http://articles.philly.com/2012-11-01/news/34838466_1_ransom-note-indian-expats-ransom-payment

12) A 28 year old man in CA was convicted in 2011 of having bludgeoned his parents to death with a bat in 2008 http://preview.tinyurl.com/bfnxy54

13) 92 year old woman in PA stabbed to death in 2011 by neighbor who had probably burgled her house several times before. http://preview.tinyurl.com/b6p4f3r 

14) added October 10 2014.  A 14 year old boy was left to baby-sit his 6-year sister while father went out with his lady friend,  came home much later  to find both unconscious from CO poisoning.  Little girl died in hospital, brother recovering.

The common threads  are gambling addiction and its  peri-gambler victims.  Gambling addiction and  peri-gambler victims are a predictable outcome, not a side effect,  of governmental policy described with much restraint by one notable critic as “failed.”  He might say “ rapacious and uncaring.”  This policy makes gambling legal not primarily to protect people by strict regulation from something harmful,  but to get government a piece of the action,  then grow the action “to support education.”  Thousands of   lives are hurt and dozens lost in this country each year under this policy. The gambling establishment and  compliant governments get away with it by misrepresenting the econometric costs and benefits and at the same time hiding the toll of unquantifiable human misery that is the direct consequence of this policy.

A frequent gambit by supporters of  government-sanctioned gambling is to say that revenue government gets from its sponsorship or “regulation” of gambling is a “sin tax,”  like  revenue from tax on tobacco or on liquor.   Some persons less moralistic, if more arrogant,  call it a “stupidity tax” or a “tax on ignorance.”  Two huge errors in this argument:

First, taxes on tobacco and alcohol are pigovian, meant as much to dampen consumption as to provide revenue.  The government actually spends money to discourage smoking.  It does not advertise that adults should drink more alcohol to get a shot at a better life and “fund education.”   Contrast this with the approach the NYS Lottery has taken in its nine-figure  advertising outlay of recent years.  Contrast it with Gov, Cuomo’s putting  up-front payments from three (?) new casinos in the proposed budget for 2016  before they  have been made legal.  Governments pretend legalized gambling is overall a beneficent enterprise.  They don’t want to impose tough restrictions or regulations ; those would decrease the flow or kill the goose that lays the golden eggs.

Second,  revenues to government from the sale of cigarettes and alcohol are not extracted from the bank accounts and home furnishings of  the  heavy smoker’s or the alcoholic’s family and friends.  Revenues from gambling are.  Smoking and drinking cause dreadful harm in many ways to non-smokers and non-drinkers.  An alcohol abuser can certainly make bad decisions resulting in injury, death  or  financial loss to someone else.  One cannot say, however, that the government set the stage for  the alcohol abuse, nor that government will get revenue if  an alcoholic in a fog sells his house for half its worth.  Another contrast here:   for most addicted and problem gamblers in the USA,  their loss is the direct gain of   the gambling exchange,  which passes a share to government.  The more they drop, the more the government gets.

Someone may still think of the problem gambler or pathological gambler as stupid or ignorant or sinful, deserving to pay a penalty for those defects.  No one with a heart, however, can think of the gambler’s young children or non-gambling spouse or unsuspecting   business partner  as deserving a penalty.  Yet these others are made to pay it, forward, backward and sideways.  It is paid in dollars, in anguish, and sometimes in death.  It is levied on six eight or ten persons for every problem gambler or addicted gambler.  They are forgotten, made expendable.

Who are the victims of predatory gambling?  Some observers see addicted and problem gamblers as victims themselves; others, as undeserving of pity. I consider problem gamblers victims and sufferers, but focus this essay on the peri-gambler victims.   They are always forgotten by legislative analysts.    Much more numerous than addicted and problem gamblers, they suffer more in the aggregate than the latter.

The  lurid stories above, all involving murder or negligence leading to death,  are among the most horrifying from the United States.  Click on the links it you are strong.  For each one like this, however, there are hundreds more that encompass other types of victimization related to the gambling market driven by government calls for more revenue (invariably “for education”) with “no new taxes.”  For example:

Not everyone who kills himself over gambling met the definition of       current  problem  gambler the day before the act. In the story here, from India in 2009, a 24 year old neophyte gambler  lost the meager savings he had set aside for his wife’s next childbirth http://preview.tinyurl.com/d92wfnt .  A near- suicide is  http://readingeagle.com/article.aspx?id=230336.  The gambler used his mother’s credit card to lose $10,000 on-line.  He was 9.

 

In short, government policy to make legalized gambling an ever-growing fount of revenues to itself exploits not only the gamblers, for whom not everyone has much sympathy, but also, in far greater numbers, many people around them for whom everyone must feel compassion.  Sympathy won’t come,  however, until their existence is acknowledged.  The gambling establishment and its supporters in government want to keep it a secret. Groups  like CAGNY and Stop Predatory Gambling have the challenge to shout about it.

“Mercy has a human heart and Pity a human face”   William  Blake, Songs of Innocence

The opinions in this essay are those of the writer, Stephen Q. Shafer MD MPH and do not necessarily reflect those of other members of CAGNY.  This post may be reproduced in part or in its entirety.  Please acknowledge the source using the permalink.

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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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