The Baltimore Sun printed  a compelling letter to the editor regarding the spread of casinos in Maryland. Similar questions could be asked in other states pushing casinos as economic development.

Sadly, though, the public has been largely unengaged and uninformed about the spread of casinos and the economic and social ills that come with more gambling. But this letter shows that some taxpayers are beginning to understand the folly of states enabling more and casino gambling. That has been the message of this blog. (See recent op-ed in the Sun.) It is worth re-printing the letter in full from Douglas B. Hermann:

“With all the screaming and scandal and nonsense over a possible casino at National Harbor, has no one asked how many casinos we need here in Maryland (“Baltimore casino names manager,” Sept. 26)?

“Once upon a time this nation produced products that could be sold for profit and the generation of tax dollars. Today, while politicians allow the steel industry in Maryland and across America to die, they fall all over themselves building casinos that generate no products and rely on income earned in other lines of work.

“Perhaps in the short run this looks good for the politicians and the superficial voter who likes instant statistical gain. In the long run, attending to more casinos while heavy industry gives up the ghost is a recipe for economic self-strangulation.”

- Douglas B. Hermann, Parkville

A Las Vegas casino restaurant named after the Southern rock band Lynyrd Skynyrd filed for bankruptcy less than a year after opening.

The move is a new twist on the band’s song, “Gimme three Steps.” Instead of three steps out the door, it is three steps to Chapter 11 of the U.S. Bankruptcy Court. Restaurants fail all the time. But the concept of trying to lure gamblers through the use of a Southern rock band shows the lengths casinos go to create customer affinity in the effort to separate folks from their money.

Lynyrd Skynyrd became famous in the 1970s with the hit songs “Free Bird” and “Sweet Home Alabama.” At the peak of the band’s success, three members died in an airplane crash in 1977. The band added other members and has continued to tour.

Lynyrd Skynyrd performed at the grand opening of the restaurant at the Excalibur Hotel and Casino in Las Vegas. But less than a year later, the Lynyrd Skynyrd BBQ & Beer in the Excalibur Hotel and Casino in Las Vegas filed for Chapter 11 bankruptcy with fewer than $50,000 in assets.

It is amazing how casino operators can argue either side of the gambling debate and still maintain a straight face. When a casino wants to open in the state, it will tout the jobs and tax revenue. But when a casino doesn’t want any competition, it will argue that more gambling is a bad deal for taxpayers that it will not deliver the promised benefits.

That is what is taking place in Maryland, where voters will decide a referendum in November on whether to allow a sixth casino and table games at the existing casinos. MGM supports the measure is spending millions of dollars arguing the casino will mean more jobs. But the Penn National casino in West Virginia is spending millions to sway voters that Maryland doesn’t need more gambling. That’s because Penn National is afraid the Maryland casino will keep gamblers from traveling to West Virginia.

The bottom line is that casinos will say and do whatever it takes to get open. Then they will twist the facts again to stop any competition from encroaching on their turf. As a result, the public debate is often lacking in any independent and substantive information with which to make a decision. Likewise, lawmakers make little effort to determine the social and economic costs of gambling. As a result, the taxpayers get played just like the suckers who go to casinos.

Elected officials and casino operators often hype the benefits of gambling. But The Washington Post editorial board cuts through the rhetoric with a compelling argument as to why casinos often over promise and underdeliver.

At best, gambling is a “mixed bag,” The Post argues. More accurately, gambling is “sensitive to economic gyrations” and is a “flimsy foundation on which to build a state’s economic development program,” The Post said. Spot on.

The argument from supporters that gambling will generate millions of dollars in new revenue rests on ”seat-of-the-pants guesses and rosy assumptions.” Well said.

The paper is even less convinced that adding table games and a sixth casino in Maryland will yield much in the way of new revenue, especially in Prince George’s County. The paper called the move “a poor branding strategy,” especially for a county whose “image has been badly stained by corruption.” Prince George’s may just be getting warmed up. That’s because gambling has a long history of being corrupting influence on lawmakers.

To recap: here’s the Post’s take on more casinos in Maryland: Flimsy foundation for economic development; rosy assumptions and seat-of-the-pants guesses for the revenue impact tot he state; and a “poor branding strategy” for a county marred by corruption. Sounds like all the usual ingredients for a flawed partnership between government and the gambling industry.

Billionaire casino mogul Sheldon Adelson claims his support for Mitt Romney is why his casino company is under criminal investigation on several fronts.

In an interview with Politico, Adelson, who has donated tens of millions of dollars in support of Romney and other Republicans, argued that he was being targeted by investigators for his political activity. Adelson told Politico the government has been trying to discredit him. He said the goal is to make “me toxic so that they can make the argument to the Republicans, ‘This guy is toxic. Don’t do business with him. Don’t take his money.’ ”

Puh-leeze.

To be sure, Adelson has been a longtime contributor to Republicans going back a number of years. But he did not ramp up his giving until after the investigations were launched. More to the point, it is believed the investigations were prompted by a civil lawsuit filed by a former executive at Adelson’s company, Las Vegas Sands, that contained allegations of bribery.

If anything, one could argue that Adelson became more involved in trying to defeat President Obama after the investigation began in hopes that a change in the White House (and in the Justice Department leadership) would help the probe go away.

In fact, the Securities and Exchange Commission has been investigating Adelson’s company since at least early 2011 when it subpoenaed documents in connection with the possible bribes. In turn, Adelson started spending big on the presidential race in January 2012, when he and his wife each wrote $5 million checks to Winning Our Future, a super PAC that supported Newt Gingrich’s failed presidential bid.

Federal and Nevada investigators are looking into tactics Adelson’s company used to build a huge casino complex in the Macau region of China. ProPublica reported that Adelson told a company executive to pay $700,000 in legal fees to a Macau public official whose firm served as an outside counsel to the Las Vegas Sands. Adelson denies any wrongdoing and hasn’t been charged.

The New York Times and The Wall Street Journal have also reported on the investigation. Read those stories here and here.

As more and more states turn to casinos as a way to fund budget gaps, they may want to consider what is happening in Atlantic City.

Outside of Las Vegas, no city is more dependent on casinos than Atlantic City.  While 30-plus years of gambling has failed to revitalize Atlantic City, its bet on casinos is quickly turning into a bust, as Reuters columnist David Cay Johnston details here.

Increased competition from neighboring states has resulted in a steep drop in the number of gamblers traveling to Atlantic City. Gamblers lost $3.3 billion in Atlantic City last year, down 39 percent from the more than $5.4 billion in 1996, according to the Center for Gaming Research at the University of Nevada, Las Vegas.

That drop in spending by gamblers has had a ripple effect on Atlantic City’s government and its taxpayers. “The casino hotels have slashed their workforces, cut real wages and, citing falling property values, received huge property tax refunds – with more refunds likely,” writes Johnston, a Pulitzer Prize-winning reporter who worked at The New York Times and The Philadelphia Inquirer and wrote a book about the casino industry titled “Temples of Chance.”

In order to replace the lost revenue from the casino property tax refunds, the city has sold $103 million of bonds. The interest on the bonds will cost the average homeowner more than $2,100 over the next two decades, Michael Stinson, the city finance director, told Johnston.

“The city is about to sell another $35 million in bonds, while the Press of Atlantic City reports that $40 million more may have to be borrowed next year,” Johnston writes. “If all that happens the average homeowner eventually may be out more than $3,600 in added taxes.”

Officials hoped the opening this spring of the $2.4 billion Revel casino would lure gamblers back to Atlantic City. So far, the Revel has been a bust. Atlantic City is scrambling to add more gambling to lure customers, but the prospect of more competition in New York or North Jersey is expected to divert more gamblers away from the Jersey shore resort.

“Atlantic City is in trouble, and I don’t see any way out, even if they get sports betting and Internet” gambling, I. Nelson Rose, the Whittier College of Law gambling expert, told Johnston.