Two of three casinos in Maryland have not filed disclosure forms for years listing campaign contributions to elected officials.
The lack of transparency comes as lawmakers just completed a special session in which they approved a measure to further expand casino gambling in the state. The session was more like a formality since Gov. Martin O’Malley and other leaders hashed out the details of the bill in advance mainly in secret. (See my recent op-ed and letter to the editor from a reader on this issue.) Casino interests have become one of the biggest and most influential donors in a number of state houses across the country.
The increased giving coincides with efforts by more states – including Illinois, Florida, Massachusetts and New York – to legalize casinos. In each of those states, big money from the casino interests helped to influence lawmakers and drive public policy. But in Maryland the failure of casino operators to even follow basic campaign finances laws shows a level of arrogance, and raises red flags about the corrupting influence gambling has on elected officials. Since lawmakers are the recipients of the campaign donations, they are reluctant to say or do anything about the lack of transparency.
Kudos to Illinois Gov. Pat Quinn for rejecting a measure to add five more casinos in the state.
Quinn vetoed a plan to add a casino in Chicago and four other areas, arguing the measure would open the door to more political corruption. However, the governor has not outright rejected the idea of more gambling in Illinois. But he wants any measure to include safeguards against corruption and provide funding for problem gamblers.
“We have one opportunity to get it right,” Quinn wrote, arguing the legislation
“continues to fall well short of the standards of he people of Illinois.”
Give Quinn credit for standing up to the influential and deep-pocketed casino interests that are driving the spread of gambling in many states. But any measure that allows more gambling is going to lead to more problem gamblers and likely more corruption. It’s just the nature of the beast.
Quinn seems well aware of the corrupting influence gambling tends to have on elected officials. In particular, Quinn said any gambling measure should not allow campaing contributions from casino interests.
“We’re not going to have loopholes for mobsters in Illinois,” said Quinn, a Chicago Democrat whose two predecessors are in prison for corruption. “The bill that was on my desk was woefully deficient when it came to protecting integrity and honesty and regulation of gambling in our state.”
Chicago Tribune columnist John Kass applauded Quinn’s move, calling it “wise and courageous.” He said that when governments allow casinos it is betting on its people to lose. “That is a cynical relationship,” Kass said.
Casino supporters vowed to press on, arguing that they have enough votes to override Quinn’s veto.
Gov. Andrew Cuomo made ending Albany’s culture of corruption a cornerstone of his administration. But two recent developments ensnaring New York lawmakers shows the corrupt culture still exists. As Gov. Cuomo pushes to legalize casinos, the corruption factor should be a cause of concern for state taxpayers.
After an internal investigation substantiated sexual harassment allegations against Assemblyman Vito J. Lopez, the Assembly Speaker Sheldon Silver authorized a secret payment of $103,000 to settle the claims. Using taxpayer funds as hush money says as much about Silver and Albany as it does about Lopez. It shows a mindset of being above the law that exists at the upper reaches of power.
At the same time, a state senator from Queens was indicted for allegedly creating a sham charity that misspent taxpayer money. State Sen. Shirley L. Huntley was accused of conspiring to help a niece and an aide steal money the nonprofit was supposed to use to help poor parents navigate the New York City school system.
Both cases do not involve efforts by state lawmakers to change the state Constitution to allow casino gambling. But the cases show the ethical rot that still exists in Albany. Even casino mogul Steve Wynn hinted at the corruption in an recent interview with Capital New York. “The minute you start saying we’re only going to have three, we’re only going to have four, you open the door to corruption of one kind or another … The restricted amount of licenses immediately creates political corruption, of some kind or another, maybe not the criminal kind or anything like that, but it’s all about favoritism and who you know, and not about what you build.”
New York is not alone. Considering the corrupting influence gambling has on many state houses, New Yorkers should be wary of the impact casino money could have on Albany.
One of the main reasons lawmakers support casinos are the jobs. No doubt casinos create jobs. But the job figures are often much lower than what lawmakers project.
Exhibit A: the much-hyped $2.4 billion Revel casino in Atlantic City. The casino was supposed to create 5,500 full-time jobs with benefits. So far, the Revel has created 2,780 jobs, according to The Inquirer. Just four months after opening, the casino is also struggling financially and teetering on bankruptcy. As such, the Revel is also not bringing in the expected tax revenue - the other big reason lawmakers support casinos.
To make matters worse, the Revel received more than $300 million in state assistance to get built, including $2.6 million for employee training. To recap, state taxpayers invested in a business that has failed to meet the job projections and deliver on the expected revenue. Not to mention, the taxpayers are supporting a casino business whose main function is to strip wealth from the pockets of gamblers.
That’s not a wise investment, that’s a bad bet.
Casinos are fine when the odds are stacked in their favor. But look out if gamblers get an edge.
The Golden Nugget in Atlantic City is suing 14 gamblers who won a combined $1.5 million after the dealer forgot to shuffle the eight decks of cards. The gamblers figured out the cards were appearing in the same sequence and continued to up their bets, racking up winnings playing baccarat. It is telling how the casino scrambled to figure out what was going on, knowing that gamblers are not supposed to win.
Now the casino wants the money back. The lawsuit cites state gambling regulations requiring all casino games to offer fair odds — to both sides. No mention, of course, that normally the odds are tilted in the house’s favor. The casinos are fine when they are fleecing customers, but once a few players win then all bets are off.
Time magazine weighs in with an examination of the risks casino operators face in return for the rewards from the spread of gambling in the booming Macua region of China.
Two U.S. casino companies are under federal investigation for possible violations of the Foreign Corrupt Practices Act. Lawsuits and allegations of bribary have put the casino operators under a harsh light.
Even more probAccording to the Time report, even more problematic, “the U.S. operators went into the gambling enclave on short 20-years-or-less gaming licenses with no guarantees of renewal. They are reliant on mainland-Chinese punters for business, which in turn puts casinos at the mercy of Beijing’s immigration controls (mainlanders need a travel permit to visit Macau) and currency restrictions (mainland visitors can only take just over $3,000 with them). This also forces them to compete for the lucrative custom of high rollers — responsible for as much as 70% of revenue — brought to Macau by infamously shady promoters known locally as “junkets” after the lavish gambling sprees they organize.”
It’s been a good week for Get Government Out of Gambling.
On Tuesday, Philadelphia Magazine published a column on its Website detailing the disastrous launch of the $2.4 billion Revel casino in Atlantic City. The column explains how the deal was doomed from the start and what that could mean for gambling in New Jersey.
Today, The Baltimore Sun published an op-ed examining Maryland Gov. Martin O’Malley’s conversion from calling casinos “morally bankrupt” to supporter-in-chief of expanding casinos across the state. The piece has stirred up some insightful reader comments.
The New York Daily News weighs in with an editorial that rightly explains that adding more casinos in the Empire State would not bring in more tourists but would suck money from the pockets of residents and create more local gamblers and lead to more problem gamblers.
The Daily News cites a study by Charles Vickery that found casinos in population centers — including New York City — would attract large numbers of players who haven’t been inclined to travel to casinos outside the state. The Daily News points to the opening of Resorts World at Aqueduct Racetrack. The Queens casino is taking in $14 million a week — mostly from New Yorkers.
“Suddenly, quick, easy availability by subway, bus or car opened the way for non-gambling New Yorkers to open their wallets and kiss their money goodbye,” the editorial argues. “So let’s be honest about what happens if the Legislature approves the casino amendment for a second time and voters ratify it in November 2013. New Yorkers would stay in New York to gamble and the number of gambling New Yorkers would rise sharply. And that’s not a good thing.”
It’s sad enough to see gambling as the only means of economic success on Indian reservations. Now two California tribes are looking to open casinos away from their reservations, further opening the door for gambling and all of its economic and social problems to spread across the country.
As this Los Angeles Times editorial rightly states: “This represents a bad precedent for gambling growth in the state.” Yes, casinos have helped provide jobs and, in some case, real wealth to Indian tribes. But not all tribes have struck it rich. The wealth that does reach Indians comes from money stripped from gamblers, leaving them poorer.
As this excellent Time magazine investigation from a few years ago details, much of the money from Indian casinos doesn’t end up with Indians, but instead goes to investors and Wall Street banks. At the same time, tribes have kicked out members for not having proper Indian bloodlines. The rapid spread of Indian casinos has also left many struggling because of the recession and increased competition.
Rather than allow Indian casinos to open away from reservations, the federal government should study the impact of the casinos and determine who really profits and if the costs outweigh the benefits.
The New York Times highlighted the troubling love connection between the Romney-Ryan team and Las Vegas casino mogul Sheldon Adelson.
Just days after Mitt Romney announced Paul Ryan as his running mate, the Wisconsin congressman flew to Las Vegas for a fundraiser and meeting with Adelson. The editorial raised questions about the influence Adelson’s deep pockets are having on the candidates, while his Las Vegas Sands casino company faces multiple federal investigations.
In particular, the editorial states: “The issues swirling about Mr. Adelson’s business practices are not new and can hardly come as a surprise to the Romney campaign. Last year, his company, the Las Vegas Sands Corporation, announced that it was under investigation by the Justice Department and the Securities and Exchange Commission for possible violations of the Foreign Corrupt Practices Act — specifically, that it bribed Chinese officials for help in expanding its casino empire in Macau. Later, the F.B.I. became involved, and even Chinese regulators looked askance at the company’s conduct, fining it $1.6 million for violating foreign exchange rules, The Times reported on Monday.
“Then there’s an unrelated investigation by the United States attorney’s office in Los Angeles into whether the Sands Corporation violated federal money-laundering laws by accepting millions from high-rolling gamblers accused of drug trafficking and embezzlement. The Wall Street Journal reported earlier this month that federal authorities are examining whether the casino should have reported the suspicious funds to the government. Instead, the company accepted $100 million from one of the gamblers and gave him free hotel rooms, plane rides and large lines of credit.”