One of the methods states use to build public support for gambling is to say the proceeds will go to support public schools, senior citizens or some other broad-based constituency.
Of course, this is just an accounting gimmick that would make Enron executives smile. Any money set aside from the lottery or casinos just means less revenue from the general fund. Even worse, states are starting to go back on promises made to fund special programs because of shortfalls in gambling revenue.
Take Tennessee, which announced plans to scale back funding from the lottery to pay for college scholarships for in-state students. Georgia was the first state to use lottery revenue to pay for college tuition, but the program there was also scaled back because of a massive budget shortfall.
The changes in the scholarship program essentially takes away the one argument for gambling. At least someone was benefiting from the gambling losses. But the reality is that gambling revenue is an unsustainable way to fund government operations. Gambling – through the lottery or casinos – is also a regressive tax that hits the poor and elderly the hardest. In a sense, poor people that play the lottery finance the college scholarships that usually go to middle class families. That’s also not a sound policy over the long term.
Nevermind that Florida lawmakers have yet to hold a hearing, let alone vote, on whether to legalize casinos in the Sunshine State. Genting, the Malaysian gambling behemoth, thinks that is a mere formality.
Genting has already purchased $450 million worth of land and produced drawings for a $3.8 billion mega casino resort in Miami. For good measure, Genting has hired 23 lobbyists and given $180,000 to the Florida Republican Party to help lawmakers, ah, better understand the benefits of casino gambling, as my old friends at The Wall Street Journal report. (And disregard the increase in crime, corruption and other social ills that follow casinos.)
Part of Genting’s land purchase includes paying $236 million in cash – in a lousy Florida real estate market – for the Miami Herald’s headquarters and allowing the newspaper to stay put for two years rent free. Talk about trying to win over editorial support from the struggling newspaper. Other casino giants, including Wynn Resorts and Las Vegas Sands, are also circling in Florida.
Many assume gambling is a layup in Florida. Seems like a perfect fit: a sleazy business for a sleazy state. But not everyone is on board. The influential Disney Corp. is opposed to a touch of Vegas changing the image of Florida as a family friendly tourist destination. The Florida Chamber of Commerce is also opposed to legalizing casinos. Chamber president Mark Wilson told the Journal that Genting bet that “Florida was for sale.”
Seems like a good bet. But Wilson said the chamber declined a five-figure contribution offer from Genting. Wow, turns out not everyone can be bought in Florida. Maybe there is hope for the Sunshine State.
Tags: casino, Disney, Florida, Florida Chamber of Commerce, Genting, Wynn
One of the main reasons states have turned to legalizing casinos is the high tax rates levied on gambling. But a proposal to legalize casinos in Florida comes with a relatively low tax rate, according to the Miami Herald.
In Florida, the proposed tax rate on casinos would be 10 percent. By comparison, Pennsylvania taxes casinos at 55 percent. Such a low rate makes the effort to legalize casinos in Florida even more dubious. If the state isn’t going to maximize its revenues then why legalize an industry that brings so many social and economic problems?
More specifically, the special tax rate that is levied on casinos underscores what essentially is a joint partnership between the government and the gambling industry. The two need each other to survive. While both the state and the casino profit, the taxpayers are the ultimate losers.
This is what passes for culture in Las Vegas. A restaurant named after the former mayor of Las Vegas held auditions for women to be “ambassador broads.”
According to an online job posting, the restaurant’s “ambassador broads” will “courteously and efficiently interact with guests to ensure their satisfaction while dining.” Only in Las Vegas. The job is essentially a casino host in cocktail attire.
Then again only Las Vegas would elect a former mob attorney as its mayor. In fact, the restaurant where the “broads” will work is named after the former mayor, Oscar Goodman. Goodman’s wife succeeded him as mayor.
The “broads” shtick may work in Las Vegas. After all this is a town that promotes sex. But the demeaning treatment of women is part of the broader sleazy culture that comes with a town hooked on gambling. Such a race to the bottom is sure to seep into the fabric of other states and cities that legalize casinos and promote gambling as a misguided means of economic development.
Now that Massachusetts has legalized casinos, the knee-jerk response of other neighboring states is to also look to add casinos. The result is going to be a gambling arms race in New England that will likely lead to increased gambling problems and social ills.
The Mohegan Sun, an Indian casino in Connecticut, suddenly wants to build a casino in Palmer, Mass. Next year, Rhode Island voters will be asked to approve a ballot question on whether to turn a slot parlor into a casino. There are also efforts to add casinos in New Hampshire and Maine.
The spread of casinos threatens to transform New England, known for its natural beauty and worth ethic. Instead, will be gaudy casinos and get-rich-quick ethos. New England’s gambling binge is part of broader push to add casinos in a number of states across the country as lawmakers scramble to close budget holes. This misguided effort could result in a nation and state governments hooked on gambling.
It is time to start calling the bluff of the gambling industry and its partners: elected officials. Promises of jobs, tax relief and economic development never quite materialize once the casinos open. (See post below.)
Casino backers in New Hampshire are touting tax relief for businesses. But the bill does not contain any language to provide such tax cuts. Never mind that it makes no sense to use a regressive tax like gambling to cut taxes for businesses.
Even worse, former New Hampshire senator Jim Rubens, who chairs the Granite State Coalition Against Expanded Gambling, cautions that many of the promises from gambling never materialize. It’s good to see some are catching on to the games played by the gambling industry and lawmakers.
The push to add casinos often comes with a promise of huge tax benefits. In 2004, Florida’s parimutual industry promised $500 million a year for education. But the industry never reached that revenue goal and the state never earmarked the money for education, as The Miami Herald reports.
One Florida lawmaker summed up the gambling ruse: “Dashed hopes and good intentions,’’ said Rep. Dennis Baxley, R-Ocala, a gambling opponent. “Whenever it comes to gambling dollars it’s always a false promise.”
As the effort to bring casinos to South Florida heats up, the gambling industry is making no such promises regarding revenue windfalls. The talk instead is about luring tourists and spurring economic development. So what about the money?
Sen. Ellyn Bogdanoff, the Fort Lauderdale Republican sponsoring the bill, said she doesn’t know what the economic impact will be and added, “quite frankly I don’t care, because this is not a revenue debate for me.” Isn’t that a question worth asking? Wouldn’t make sense to find out if gambling adds most costs than benefits? Maybe Bogdanoff doesn’t want to ask the question because she is afraid of the answer.
Tags: casino, Ellyn Bogdanoff, Florida
A City Council committee gave a thumbs up to more gambling in Philadelphia. SugarHouse, a dump of a casino located in sketchy part of the city, plans to add more gambling space and a seven-story parking garage.
Sadly, the garage may well make it easier for gamblers to leave their kids in the car. (At least there will be some shade.) But it sounds like the garage will be bigger than the casino, which is about the size of a big box retail store.
The casino has failed to attract any tourists and instead preys mainly on the poor, Asians, and the elderly in a city with a poverty rate of 25 percent. As casino critic Paul Boni points out, the casino depends largely on repeat business from locals, many of whom may have gambling problems. But rather than try to stop the spread of gambling, and all of its social and economic problems, city and state elected officials are happy to enable the expansion.
Lawmakers in Massachusetts did some last minute wheeling and dealing before passing a bill to legalize casinos. Sellout Gov. Deval Patrick plans to sign the measure before Thanksgiving, adding Massachusetts to the growing list of states banking on the misguided public policy that the state can gambling its way to better times.
Of course, the last-minute changes to the gambling bill were hashed out in secret with no public input. The changes included millions more to the horse racing industry. This move is essentially a sop to House Speaker Robert A. DeLeo, whose father worked at race tracks. DeLeo has a warm spot for the horse industry, so it got a special earmark. What a way to run a government. One man can decide that the tax dollars from one gambling business will go to prop up another gambling business. As if that is money well spent.
Rest assured, the action on Beacon Hill is just heating up. Get ready for the real shennigans. Keep a close watch as different casino interests manuever to win the coveted gambling licenses. Most of the process will take place in secret away from public view. But here’s one solid bet: the winners of the casino licenses will likely include the teams with the A-list political connections.
UPDATE: The Boston Globe also doesn’t like what has become of the gambling bill and urged Gov. Patrick to veto it. That would be the right thing to do but don’t hold your breath waiting for Patrick to suddenly get a spine. DeLeo has been driving this train and Patrick is just along for the ride.
Tags: casino, gambling Deval Patrick, Massachusetts, Robert A. DeLeo
Big Gambling has taken over the gambling debate, silencing most gambling critics. The policy fight these days is mostly taken up by competing gambling interests. That’s the takeaway from this story detailing the debate over legalizing Internet gambling in California.
Instead, of discussing the pros and cons of Internet gambling, the debate is about which gambling interests – casinos, racetrack, Indian gambling and state vs. federal governments - will get a piece of the pie. The feeling now is that legalizing Internet gambling is more a matter of when, not if.
Lost in the debate is how gambling is a bad public policy that preys on the most vulnerable and leads to an increase in a variety of social ills. The need of governments to raise revenue without raising taxes is prompting lawmakers to turn to gambling. Never mind that government can’t gamble its way out of financial trouble, just like individuals can’t.
The upshot is that gambling will march on, spreading across the country in different forms like a cancer. Legalizing Internet gambling could be the most devastating policy change. It will open the floodgates and enable everyone to gamble from home or their mobile phone, leading to even more social problems and leaving many more people even deeper in debt all in the name of a quick buck. Never mind that people can and do gamble illegally on the Internet. Once the government makes it legal, it will legitimize a bad idea, which will spur many more people to give it a try.
Tags: California, Internet gambling, loyal opposition, social ills