With the Mass. Senate due to vote on the expanded gambling legislation later this week, I thought I would share my list of five reasons for voting No. The first two reasons are all about jobs and economic development, because I agree with the people from organized labor who argue that putting people back to work should be our first priority. I just don’t agree that legalizing predatory gambling is the right way to do it. The full list is at http://tiny.cc/FiveReasons-NoO…
Reason #1 – It’s economic cannibalism, not economic development.
Although industry advocates talk about an untapped market with hundreds of millions of dollars in potential gambling revenues, the truth is that those dollars are currently being spent on other things: on the Lottery, on household and consumer goods, at local restaurants/bars, on movies/shows, etc. The gambling industry only makes money by re-directing that spending to casinos and slot machines — cutting into Lottery revenues, eroding spending at existing local retail, restaurant, and entertainment businesses, and undermining the ability of those businesses to continue to provide employment and pay taxes.
Legislators have included provisions to replace lost Lottery revenues, but at a much higher cost to Mass. residents. Because the Lottery returns a much higher percentage of gross revenues as Local Aid to cities and towns than would a tax on casino/slot machine revenues, Mass. residents will have to gamble away a lot more money to casinos and slot machines to make up for the lost Lottery revenues.
Proposed legislation contains no such hold-harmless provisions to save the local businesses and jobs that will fall victim to competition with casinos. Without the kind of cost/benefit analysis that accounts for this cannibalization of local economies — an analysis that industry advocates have understandably resisted — all we have to go on is the experience of other communities that have watched their traditional local economies fall victim to predatory gambling expansion.
Predicting the impact of re-directed consumer spending isn’t rocket science. There are only two potential sources of gambling revenues: in-state residents and out-of-state tourists. Earlier debates about casinos featured talk about attracting gambling tourists. Reality has set in, however, and proponents acknowledge that with “destination casinos” in an increasing number of states, local gambling concerns will have to depend on the patronage of Massachusetts residents for the overwhelming majority of their revenue.
Proponents estimate that Mass. residents spend about $1.1 billion annually on gambling trips to Foxwoods and Mohegan Sun in Connecticut and Twin Rivers in Rhode Island. The Spectrum Report talks about recapturing half of that, or approximately $550 million, of which 27% or $148 million would be paid in State taxes. [www.mass.gov/Ehed/docs/EOHED/MA_Gaming_Analysis_Final.pdf] If that $148 million were all that proponents were promising, the Legislature wouldn’t be seriously considering introducing Class 3 gambling into the State, with all its related problems and costs. Proponents’ revenue estimates are much higher, based on assumptions that Massachusetts residents could potentially spend another $1-2 billion on in-state casino/slot machine gambling, if given the opportunity.
That is $1-2 billion in addition to the $1.1 billion that is reportedly going to out-of-state gambling concerns, and the $4.7 billion that Mass. residents annually spend on Lottery products. Of course, like casino/slot machine gambling, Lottery spending — which averages out to $720/person/year and upwards of $1,800 per household per year — isn’t evenly distributed across the population: these averages mean that some households are spending many thousands of dollars a year on scratch tickets, Keno, and out-of-state slots.
You can be sure that nobody with a yen for gambling is putting money in their piggy bank waiting for the Legislature to legalize the slots in Mass. If there’s an additional $1-2 billion market for in-state gambling, it’s going to come out of Lottery sales, and at the expense of the consumer spending that sustains thousands of existing local businesses and their employees.
And, just in case anyone thinks that the State can harness all that demand and keep all those gambling revenues within our borders, think again. If Massachusetts builds casinos that threaten to lure Granite State gamblers, the New Hampshire Legislature is ready to license competing casinos at Rockingham Park and Seabrook. And as soon as Class 3 gambling becomes legal in Massachusetts, Indian tribes that aren’t included in the initial deal-making are free to develop their own tax free establishments. So much for all that market share. Passage of the proposed legislation simply fires the starting gun in a race to the bottom.
We know from national experience that when casinos from one state are competing with casinos in neighboring states, legislators hear calls to reduce the tax rate, to increase the number of slot machines, to loosen restrictions on the service of liquor, to increase hours of operation … all in the interest of increasing revenues that allow bigger payoffs and better odds. Once we go down the path of legalization in Massachusetts, it’s only a matter of time before elected officials hear complaints that our casinos can’t compete with casinos in New Hampshire or Connecticut or Rhode Island casinos unless we relax our guidelines and lower the State’s “take”. So much for the promised revenues.
We’ve been through this before with other businesses that broke their promises to increase jobs or to stay in Mass. in exchange for tax breaks. Haven’t we learned anything about the ephemeral nature of “commitment” and “loyalty” from the arm twisting that happens when sports teams pit cities against one another? The reality is that no matter what kind of promises the gambling industry makes to get us to open the door in Massachusetts, the rules will change once the industry has a foothold here, and there’s no going back.
The gambling industry isn’t biotech or clean energy, which can capitalize on the State’s research and technological advantages to create products that bring in investment and customers from other states or nations. Legalizing and promoting Class 3 gambling merely creates an industry that will suck revenues out of existing local economies and re-direct it to sustain a handful of predatory enterprises.
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In my next post, Reason #2, I’ll share my thoughts about why expanding legalized gambling isn’t either the quickest or most efficient way to create good jobs.
Because in 2009, THIS household spent ZERO.
because we don’t buy any either and since this began, we haven’t found any of our friends who buy them.
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p>It’s a pretty sobering statitic.
the State Senate gives the casinos a little extra boost by allowing them to offer loans.
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p>It simply doesn’t get any more profitable!
Gambling should only be done with disposible/discretionary income (ie, that which you can afford to throw away as you should always assume that any money you use at a casino is gone forever). Offering/receiving loans to gamble is completely stupid, IMO.
When smoking has been banned in casinos/slot parlors, revenue declines so the ban is lifted.
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p>Did you notice that the Senate exempted casinos?
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p>Once legalized, the Commonwealth becomes a sponsor or partner thirsting for those revenues just as the addict does and moves from being solely a regulator.
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p>A federal study determined that for every $1 in tax revenues casinos provide, the cost is $3.
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p>Given that equation, the costs continue to escalate, hence the state becomes caught in the continuous spiral of expanding gambling.
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p>I have a recurring thought each time I speak with a supporter.
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p>We need to ask ourselves:
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p>If casino gambling is so wonderful, what happened to Atlantic City?
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p>With all of those casinos offering low wage dead end jobs, unemployment has ALWAYS been higher than elsewhere. Crime increased more than 80%. Poor school performance never abated and poverty is higher now than pre-casinos.
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p>Or take a look at Las Vegas with the highest dropout rate in the nation, high suicides caused by gambling addiction – the real family killer! High crime. Low educational achievement.
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p>Here’s ny testimony offered to the Senate Ways & Means Committee –
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p>http://middlebororemembers.blo…
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p>You’re supposed to copy success, not failure.
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p>Just because everyone else fell for the false promises of the Gambling Industry doesn’t mean we have to.
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Then we jumped on the Lottery, which is a tax on the poor.
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p>The casino bill is a revenue solution – for gambling corporations. If MA residents are spending money in RI and CT – money that leaves the state – building our own casinos makes it easier for much more money to leave the state. Great idea!
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p>New Jersey thought that Atlantic City would be another Las Vegas. It turned out that the country would only support one of those.
When smoking bans are debated for other public places, especially bars and restaurants, businesses always raise the bogeyman of business declining/going elsewhere. We ban it anyway only to find that people adjust and business owners often come to realize that business didn’t decline and sometimes even increased because non-smokers can come out and not have their own lungs assaulted by second-hand smoke. Casinos should not be used as revenue-raiser for the state beyond what is incidental to any other business that creates a tax base and jobs. The state should be a regulator only and if it is also a benefactor that is a clear conflict of interest.
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p>I must admit I feel like a voice crying in the wilderness here. I’ve lost count of how many times I have tried to infuse some commonsense regulations to alleviate some of the worst consequences of casinos. Casino proponents are so gung-ho that they don’t want to put in anything that might harm the assumed business model and opponents insist that we would never be able to do it. I thought I liked the Senate bill better than the House bill, but now it seems like they are doing all they can to lose my support.
Former attorney general Scott Harshbarger opposes casinos for many reasons, but has offered the legislature some guidelines to follow when creating gambling legislation.
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p>You can read it here.
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p>It’s unfortunate that our current AG has not been as proactive in trying to protect the citizens of the Commonwealth, as so many other AGs around the country have been, but then, that’s just Martha being Martha.
assuming far too many of these legislators are doing it for the right reasons, when they’re not. In the house, for the bulk of people who switched votes, this was about what the Speaker wanted (and what he’d do to those who blocked him from getting what he wanted). For many of those who’ve longed supported the industry, it was about the race tracks and benefiting special interests in and very near their district.
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p>I think there are some who legitimately think there’s a possible ‘reasonableness’ to casinos if, gosh darn, we just do it right (even though no one else has in this country to date) and that it could be a part of the ‘solution,’ but I think those numbers of legislators are actually much smaller than we’d care to admit — but I do think it accounts for the Senate President and more members of her chamber than the House.
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p>The point is, though, that they’re being naive, or they’re trying to self-rationalize the situation, trying to convince themselves they can keep this industry under some sort of sane control in this state, where it’s not been anywhere else — and just don’t want to continue to resist anymore, especially given where leadership stands, or are being allured themselves, glamored from seeing the full scale of the problems and impossibility of blocking the bulk of them.
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p>The industry almost always gets what it wants, even if it has to take a slightly worse deal up front and fight for more profitable terms over the coming years, crying poor at every recession, eeking more revenue each year with whatever measure they can push through in their favor, often at the cost of local business, less regulation, less mitigation and the little ‘tax benefits’ we get out of the deal (I use that term loosely given the fact that this industry will cost our state more than it brings in for revenue). The industry is patient in its attempts to seek exploitive and predatory profits off an addictive product — very, very patient — while we, ourselves, are not. That, in the end of the day, is our biggest weakness.
The Death of Las Vegas!
http://english.pravda.ru/busin…
We need casinos because our system has made it so hard for the average worker to build up their capital, either for an impressive purchase, a leap of class status, or a decent retirement. They have a much better chance with slots.
masquerading as “thinking outside the box.”
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p>The average worker most certainly does not have a better chance of building up their capital by playing slots than by the traditional methods. The average worker has a much better chance of seriously degrading his or her financial outlook by playing slots.
If we could hit it big with our regular wages then don’t you think it would be happening more often.
The odds of them hitting it big at the slots are tiny. The odds of them losing whatever portion of their inadequate funds they plug into the slots are very, very good.
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p>There may not be a way to hit it big in the short term with an average paycheck, but pretending that playing the slots is better odds is foolishness of a very high order.
and what they “get” (= lose) at slots are two different things