The hunt for more gamblers

March 1, 2012 1:14 pm

When it comes to wringing more gambling dollars out of residents, lawmakers seem willing to try just about anything. States and private companies are pushing plans to allow video terminals in a hotel complex, keno machines in bars and even lottery sales in the backseat of taxi cabs. What’s next scratch off lottery tickets sold in public bathrooms and toll booths?

The lawmakers are essentially turning into gambling addicts in their zeal to come up with new ways to generate revenue by getting residents to throw away their money.

In Georgia, several lawmakers are backing an effort to allow video gaming terminals, which are similar to slot machines. The move comes as a developer unveiled a plan to build a $1 billion hotel and theater complex that would include a video gambling complex in Gwinnett County. The project has the look and feel of a casino but it is not called a casino.

Lawmakers back the idea as a way to generate revenue for the state HOPE scholarship fund, which provides college funding for state residents. The fund has been supported by the state lottery. But lottery revenues have been unable to cover the scholarships. In their zeal to support education, the lawmakers fail to understand they are robbing Peter to pay Paul by stripping wealth from residents by getting them to gamble away their money. Fortunately, Gov. Nathan Deal gets that and opposes the development of video gaming, which he said looks like a casino.

In North Carolina, some lawmakers are pushing a plan to legalize keno machines that would allow residents to place bets every couple of minutes. It would be like having a lottery drawing 10 times an hour. The keno machines would be available in taverns, and are essentially a regressive tax on those who can least afford it. The measure would spread gambling to more outposts around the country, making it easier for more residents to gamble away their money. The Greensboro News & Record rightly called the plan a “sucker’s bet.”

Bill Brooks of the North Carolina Family Policy Council opposed the plan and called keno highly addictive because of constant play. The Legislature currently prohibits video poker and video sweepstakes games.

Tennessee wants to make it harder for resident to get college scholarships, in an effort to limit the amount of funding, which comes from the sale of lotteries. At least one state senator found it troubling that state lottery officials exist to essentially take money from residents, which is then used to fund education. “Just for the record, I think your industry is a blight on our beautiful state. I think it’s immoral. I think it’s corrupt. I’m going to vote against it.” Sen. Jim Summerville

In New York, a company that wants to provide credit card services in taxis is also pushing a new technology that would allow the sale of lottery tickets in the backseat of cabs and at gas pumps. Yes you read that right.

The gambling push shows that many lawmakers lack good ideas to solve state budget woes, and instead are looking more and more to strip wealth from the very residents they were elected to serve.

Tax breaks for casinos

February 6, 2012 10:45 am

The insatiable drive for tax revenue is one of the main reasons many states are turning to casinos as a way to fill government coffers. But once the casinos begin to struggle they immediately turn to lawmakers for help.

In West Virginia, the city council  in Longview just approved a one-year tax break in an effort to keep the struggling casino afloat. Once the tax revenue goes away, what is the point of having a casino if all it does is create economic and social costs?The troubles in Longview offer a window into what other towns and cities can expect as more casinos open and the competition for limited gambling dollars increases.

Consider: The two mega casinos on Indian reservations in Connecticut are scrambling to refinance crushing debt loads, and will soon face increased competition from Massachusetts and possibly New York. Several casinos in Atlantic City filed for bankruptcy in recent years and continue to struggle, in part from increased competition in Pennsylvania. Meanwhile, the Revel casino needed a state bailout in order to resume construction.

Casinos in Indiana, Mississippi and other states are also experiencing a drop in revenues, in part from the sluggish economy and increased competition. In Delaware, the governor has ditched a plan to add more casinos as the existing casinos lobby state lawmakers to reduce their tax rate. 

Meanwhile, other states like Ohio, Kentucky and Florida have or are considering legalizing commercial casinos, which will further increase competition. As the casino cancer spreads, look for more states to cut taxes and cut back on regulation – as New Jersey has done – in an effort to prop up the increasingly influential casino industry.

The Longview casino claims it has not made a profit since 2008. Meanwhile, the casino continues to strip wealth from the community. And now the government is extending the casino a tax break so it can continue to take money from residents. There is something seriously wrong with that picture. It shows why casinos are such a bad public policy that is insidious and unsustainable.

Cuomo’s stealth casino legislation

January 22, 2012 6:32 am

Is this what passes for democracy in New York these days?

Gov. Andrew Cuomo has quietly set about trying to change New York’s Constitution to legalize casinos. Amazingly, the change to Article I of the Constitution was not announced by the governor and amounts to all of eight words - for now. 

Cuomo’s amendment provides no details regarding this major policy shift that requires amending the Constitution. For example, there is no language regarding how many casinos will be allowed; where the casinos will be located; how will the casinos be regulated; or how will the casino licenses be issued. Never mind an independent cost-benefit analysis that considers the economic and social costs of a major expansion in gambling. Details, details.

Cuomo’s stealth effort is rightly receiving some pushback from state lawmakers. Of course, this is how the casino sausage often gets made. In Pennsylvania, lawmakers voted in the middle of night on July 4, 2004 to legalize 61,000 slot machines – more than any state but Nevada. The bill was later amended to allow full-blown casinos. 

Here’s how the League of Women Voters described the process: What began as a one-page, unrelated bill, became145 pages of legislation. Legislators voted on this substitute amendment within a matter of hours. There were no public hearings, no committee votes – no real opportunity for citizens to provide meaningful input into the details of the bill. This procedure constituted an end run around the PA Constitution which specifies that bills be considered on three separate days in both the House and Senate before final passage.

Looks like Cuomo is headed down the same path. New York deserves better.

The looming casino glut

January 17, 2012 2:14 pm


The spread of casinos in the Northeast is increasing the competition for gambling dollars and enabling tourists to stay home to gamble, a story in the Washington Post says.

The main gambling meccas in the U.S. – Atlantic City and Las Vegas – have been hit the hardest by the spread of casinos. The competition will only increase as casinos open in Ohio and Massachusetts. Lawmakers in New York and Florida also want to legalize casinos, which would further eat into gambling revenues at other states.

According to the Post: Nevada’s larger casinos lost $4 billion in 2011, according to a report released this month by the state’s Gaming Control Board, as the state continued to feel the effects of the global economic slump. Revenue has slid substantially at the pair of Indian tribe-owned casinos in Connecticut and declined by a dramatic 30 percent in Atlantic City, which has lost customers in droves to the new casinos in nearby Philadelphia, according to David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas.

The drop in revenue shows that states can’t count on casinos to provide a steady, let alone a growing, revenue stream.

How to buy a casino: First hire lobbyists

January 13, 2012 8:21 am

Here’s the simple three-step guide to change public policy in order to legalize casinos in a state, as detailed by The New York Times today.

First thing a big casino operator does is buy up some land. And then buy up a bunch of influential lobbyists. Sprinkle around lots of cash and then watch lawmakers begin to dance like puppets on a string.

That appears to be the Genting Way. The Malaysian casino giant is literally buying its way into the halls of power in New York and Florida. This once again underscores the joint partnership between government and gambling.

Funny, some folks thought Gov. Cuomo just dreamed up the bright idea to change the state constitution in order to legalize casinos across the state all by himself. Or that residents were calling Albany clamoring for more slot machines.

In fact, here’s what happened. Genting bought some land in the Catskills. Then hired a bunch of well-connected lobbyists who used to work for Cuomo, Mayor Bloomberg and other key lawmakers. Next thing you know, Cuomo is pushing casinos in New York.

Never mind the state constitution prohibits gambling or the studies that show casinos result in increased crime, bankruptcy, suicide and divorce. How can a business that produces mainly nothing but losers be a good public policy?

More casinos in New York is not the answer

January 5, 2012 10:35 am

Not even all of the gamblers in New York want casinos. Clyde Hyberman details how more casinos hardly the answer for New York in his fine piece for The New York Times today.

Here’s the money quote from a woman who just got done losing money in a slot machine at a racino at a racetrack in Queens: “I’d rather keep it all in Atlantic City,” she said. “It’s too tempting to have it close to home, especially for younger people who don’t have much money.”

Hyberman also pointed out how revenues from casinos are an unreliable way to fund a government: ”A report last month from PricewaterhouseCoopers said that Atlantic City’s gambling revenue, which totaled $5.2 billion in 2006, had shriveled to $3.3 billion in 2011, and would shrink further, to $2.8 billion, by 2015.”

He keenly pointed out how casinos have tried to turn gambling into “gaming” and upscale entertainment when in reality it’s about taking money from the most vulnerable: “The image that casinos try to project is one of glamour, as if they were filled with James Bonds and Carrie Bradshaws. The reality is more like that of the state-run numbers game known as the lottery. Customers tend to be the working poor, praying that God has nothing else on his plate but to smile on them,” Hyberman wrote.

“Gambling is, and always has been, all about finding ways to get suckers to part with their money,” said E. J. McMahon, a senior fellow at the Manhattan Institute. “And the poor suckers are usually poorer or, at best, subsistence.”

Cuomo on casinos: shoot first, study later

January 3, 2012 7:05 pm

David Blankenhorn’s op-ed today in the Albany Times-Union details how Gov. Cuomo and the Senate and House leaders in Albany have corrupted the Democratic process when it comes to legalizing casinos.

Cuomo has already decided to change the state constitution – which currently prohibits casinos – before producing any independent studies or analysis to determine if gambling is a good idea. If the governor would take the time to really study the issue, he would see that gambling is a regressive tax and leads to many social and economic ills that far outweigh any benefits of casinos. Since this is really about lining state coffers, that may explain why Cuomo wants to avoid any real debate on casinos.

Blankenhorn’s op-ed also references a survey the Institute for American Values conducted of leading New York economists that found more than two thirds who said casinos were regressive. (Disclosure: this blog is funded by the IAV.) It would be nice if Cuomo would produce some real independent data to support his claim that casinos are so wonderful.

Sure, casinos will produce jobs and lots of money for the state to spend, but that revenue will mainly come straight from the pockets of the New York constituents, Cuomo was sworn to protect. And the jobs that will be created are mainly low wage positions with little to no economic spinoff. Interestingly, Cuomo’s father, who was considered one of the more thoughtful governors New York has had in some time, took the time to study the impact of casinos and said they were a bad thing for the state.

New York casinos not a done deal?

December 30, 2011 9:41 am

Assembly Speaker Sheldon Silver (D-Manhattan) said he is not sure that lawmakers will vote to change the constitution to legalize casino gambling in New York.

Hopefully, Silver isn’t just posturing and really means that lawmakers will weigh the pros and cons before taking the major step of changing the state constitution. If there is a real debate about the economic and social costs of gambling, lawmakers would understand that casinos are a bad bet. Sorry to be skeptical, but usually these casino deals are wrapped up in the back room of state houses.

The argument that other states have legalized casinos is hardly a compelling one. Same goes with the argument that casinos are the way to create jobs. Yes, there are casinos jobs but most of them are low wage. And the costs that comes from casinos is not worth adding a few low wage jobs. There are much better ways grow jobs than getting taxpayers to dump their hard-earned money in slot machines.

Casino supporters, including Gov. Cuomo, should produce the independent economic evidence – not studies funded by the gambling industry - that shows casinos are really a net benefit for the state and not just a way for the state to line its coffers.

Cuomo sheds more light on casino push

December 26, 2011 2:22 pm

Gov. Cuomo continued his “soft opening” campaign to legalize casino in New York by telling the Daily News that he would support a casino in the Big Apple.

“Like Assembly Speaker Sheldon Silver, Cuomo said he doesn’t  want to see a casino in a densely populated part of the city, but would be open  to putting one at a place like Aqueduct Racetrack in Queens, which already has a  virtual casino,” according to the Daily News.

Does a densely populated area mean Manhattan? If so, why not? Casinos are a bad idea anywhere, but it would seem that a densely populated area like Manhattan would be the best location if Cuomo and others were serious about a casino that draws tourists and maximizes revenue. Perhaps what Cuomo and Silver are really saying is that a casino is fine in out-of-sigh and out-of-mind locations, like working class neighborhoods, but not in Manhattan where the more powerful elites live.

“I’m not excluding any locations at this time,” he told the Daily News,  adding that establishing a casino in a part of the city “certainly can” make  sense because the operation would capitalize on the massive population. “New York City is a real location. Albany is a  real location. Buffalo is a real location.”

The Daily News said Cuomo is expected to call on the Legislature in his Jan. 4  State of the State address to give the first of two needed votes to a state  constitutional amendment to legalize casino gambling in the state.

Cuomo’s casino plan lacks details

December 6, 2011 3:05 pm

Gov. Andrew Cuomo has thrown his support behind legalizing casinos in New York, but he has yet to say much more.

Cuomo’s casino proposal lacks details as to how many gambling joints he would support and where they would be located. Of course, that’s often how the casino debate plays out. If recent history from other states is any guide, the real gambling plan is likely to be worked out in the backroom. That’s where Cuomo, along with state House and Senate leaders and the friendly gambling lobbyists, will most likely craft a casino bill.  (Yes, we are talking to you Massachusetts and Pennsylvania.)

The good news is it sounds like residents will have an opportunity to vote on whether or not they want to allow casinos in the Empire State. New York’s constitution prohibits casinos. Any effort to change the constitution requires a voter referendum. That process should allow for a substantive debate and study regarding the pros and cons of casinos, including the many social and economic ills that come with more gambling. But before there is a debate, Cuomo should provide more details about his casino plan.