2. ECONOMIC EFFECTS SHOWN TO BE ACTUALLY HARMFUL: The legalization of gambling activities eventually causes: (1) increased taxes, (2) a loss of jobs from the overall region, (3) economic disruption of other businesses, (4) increased crime and (5) large social-welfare costs for society in general and government agencies in particular. For example, two studies of the riverboat casinos in Illinois concluded that for every one job created by the riverboats, most of the surrounding communities probably lost one or more jobs from pre-existing businesses (Grinols 1994; Grinols and Omorov 1995).
3. GAMBLING OFTEN ACTUALLY RESULTS IN TAX INCREASES: Field research throughout the nation indicates that for every dollar the legalized gambling interests indicate is being contributed in taxes usually costs the taxpayers at least 3 dollars– and higher numbers have been calculated (Politzer, Morrow and Leavey 1981; Better Government Association 1992; Florida Budget Office 1994). These costs to taxpayers are reflected in: (1) infrastructure costs, (2) relatively high regulatory costs, (3) expenses to the criminal justice system, and (4) large social-welfare costs (Illinois Governor's Office 1992).
4. IMPACT ON LOCAL POLITICS: Political scientists have raised concerns that the newly developing constituencies in the licensed gambling industry are becoming so widespread that the industry can dictate economic, social, and tax policies.
5. SOCIAL WELFARE COSTS: Legalized gambling activities act as a regressive tax on the poor (Clotfelter and Cook 1989). Specifically, the legalization of various forms of gambling activities makes “poor people poorer” and can dramatically intensify many pre-existing social-welfare problems. For example, one report concluded that without casino gambling, many local citizens would have increased participation in other “outside” activities. “More than 10% of the locals would spend more on groceries if it were not for the casino, while nearly one-fourth would spend more on clothes. Thirty-seven percent said that their savings had been reduced since the casino had opened …” (Thompson, Gazel, and Rickman 1995).
6. ADVERSE BUSINESS DEVELOPMENT: Companies tend to avoid locating in areas allowing legalized gambling. Gambling activities and the gambling philosophy are directly opposed to sound business principles and economic development.
7. PATHALOGICAL GAMBLER PROBLEM: States which embrace legalized gambling activities can expect enormous socioeconomic costs and a decline in the quality of life. Unlike traditional business activities, legalized gambling activities cater to a market consisting of addicted and potentially addicted consumers, and most pre-existing traditional businesses will find it quite difficult to compete for “consumer dollars” which are being transformed into “gambling dollars.” Additionally, each newly-created pathological gambler has been calculated to cost society from $13,200 to $52,000 per year (Maryland Department of Health 1994; Better Government Association 1994). Sociologists almost uniformly report that increased gambling activities which are promoted as sociologically “acceptable” (the acceptability factor) and which are made “accessible” (the accessibility factor) to larger numbers of people will increase the number of pathological gamblers (Goodman 1994: Politzer, Morrow and Leavey 1981; Better Government Association 1992; Maryland Department of Health 1994).
8. CONCLUSION: Increasingly, taxpayers and businesses are beginning to realize that, as Professor Jack Van Der Slik has summarized for much of the academic community, state-sponsored gambling “produces no product, no new wealth, and so it makes no genuine contribution to economic development” (Van Der Slik 1990)
Earl Grinols had publshed a more recent review than those cited here. It appears in his book “Gambling in America: Costs and Benefits” Cambridge, UK; New York: Cambridge University Press, 2004. His review is entirely consistent with these points.
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It’s odd that so little recognition is given to the fact that casinos are special monopolies granted by the states, or secured by Indian tribes, and that this is the reason why they are so profitable. It is also the reason why they produce corruption at every turn. Patrick’s claim that there will be “transparency” in the administration of casinos is already belied by the utter opacity of his deliberations in reaching his position. Why aren’t citizens of all political stripes at least demanding that he do Dick Cheney one better and make public all his sources, every analysis he relied on for his conclusions, everyone he talked to, including stakeholders?
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Grinols conclusion is that the only social “benefit” of casinos is shortened travel time to the nearest casino.
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He makes particular hash of the “job creation” myth. (Job creation is actually not, in itself, a social benefit. Potholes creat jobs. Crack addicts create jobs. This does not mean that freeze-thaw cycles or drug pushers should be credited with creating net social benefits.)
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What most people also tend to ignore is that addicted gamblers are only a small part of the problem. Their spouses and children are often gravely affected. They often embezzle to keep their habits going. The argument that “drugs and alcohol do it too” seems rather beside the point.
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William Bennett
he released hundreds of pages of materials. Have you read them, or are you just assuming they’re incomplete? I summarized the meetings with outside players here.
I certainly saw your post with the list of meetings. One economist.
Where are the hundreds of pages released? I checked with a state representative, who was unaware of them?
is that they were handing out these large packets at the Dept. of Economic Development in One Ashburton Place the day Deval made his announcement, for the cost of the copying. Someone who had the packet passed the list of meetings along to me. Apparently I’ve got better sources than your rep. đ
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Re “one economist,” as I noted in the post, I was disappointed to see little input from outside economic experts.
I’ll get one. Interesting that you have better sources than the rep. I’ll check.
It’s always good to have more data and analysis to shed this myth of casinos being cash cows for the state. They’re not. In the end, we’ll be lucky to break even. I’d rather not take those odds.
… but this study seems to draw a different conclusion. I don’t know if this can be explained by the differences between the Ct model and those that were the subject of the 1994 study or if one or both of the studies are biased in some way.
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http://ccea.uconn.ed…
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