The casino mirage

July 31, 2012 10:25 am

In state after state, lawmakers tout casinos as the answer to budget and job woes. But the experience of other states shows that gambling often fails to deliver the promised benefits.

Maryland Gov. Martin O’Malley is the latest lawmaker to get hooked on gambling, calling for a special session Aug. 9 to add a sixth casino in the state. But analysts say adding another casino will shift spending rather than deliver more revenue.

“There’s no doubt Maryland will generate additional revenue in the short-term, but it’s likely not sustainable over time,” Lucy Dadayan, a senior policy analyst at the Nelson A. Rockefeller Institute who studies state gambling returns, told the Washington Examiner. “The pool of gamblers really doesn’t expand. It just shifts.”

A recent study by the Pew Center on the States showed that of 13 states that legalized casinos or lotteries in the past decade, two-thirds failed to meet projections — including some that missed benchmarks by more than half. (See graphic here.) Tax rates are mostly higher in states that adopted gambling recently, analysts said, showing that casinos are relied on to raise revenue after other options have been exhausted, The Examiner reported.

“It’s kind of interesting when jobs and the economy and spending and debt are the big issues and the focus in Maryland has been on advocating for gay marriage and benefits for illegal immigrants and now it’s expanding to gambling,” Virginia Republican Gov. Bob McDonnell told The Washington Examiner. “Some people would call it a volunteer tax.” Meanwhile, Maryland’s tax collector, Democratic Comptroller Peter Franchot, called the expansion of the state’s casino network “fool’s gold.”

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2 thoughts on “The casino mirage

  1. Mr. Davies:

    Terrific website overall. I am really impressed at how you are able to gather so many interesting articles that are fresh and current. I noticed the Warren Buffett quote on the homepage and Mr. Buffett also once said that, “The human need to gamble is huge.” I have to agree with this and I don’t think the industry will disappear anytime soon. If we toss out government from gambling completely, who would be there to protect the consumer from cheating (aside from the casinos’ built-in mathematical ‘cheating’)?

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