Editorial: Casino gambling will need careful look

Editorial: Casino gambling will need careful look

The mere fact that the Georgia Lottery Corporation commissioned a study of the potential for casino gambling in Georgia is an indication that the issue might surface sooner rather than later in the state legislature.

That conjecture is only strengthened by the fact that the study, reported last week in The Atlanta Journal-Constitution, concludes that three casinos — one each in Savannah, Atlanta and Jekyll Island — equipped with a total of 10,000 video lottery terminals could generate $1 billion in state revenue by 2014.

That $1 billion would represent nearly 5 percent of the current state budget, a windfall that’s certain to catch the attention of lawmakers who’ve been dealing with declining state revenues for the past few years (although recent months have seen comparative upticks in tax receipts) as the economy has languished in an ongoing downturn.

Of course, if discussions of casino gambling did gain some traction in next year’s legislative session, that enthusiasm for having a relatively easily obtainable source of new revenue would be tempered by the socially conservative forces holding sway with much of the Republican-dominated state legislature that would oppose any extension of gambling in the state beyond the Georgia Lottery, although the libertarian argument against governmental delineation of what citizens should be allowed to do might also enter the debate.

Outside of those philosophical arguments, however, there may be some reason for lawmakers — if they do take a look at casino gambling — to proceed with care.

Here, for example, is some back-of-the-envelope noodling to compare the 2010 general fund budgets in three states where casino gambling was adopted in the 1990s, and where proceeds are designated for the general fund, with the revenue generated by casino gambling in 2010:

• In Delaware, the $243.12 million in casino gambling revenue in 2010 represented 7.8 percent of the general fund budget of $3.1 billion.

• In Rhode Island, casino gambling receipts of $296.3 million represented 3.8 percent of the $7.8 billion general fund budget.

• In New Mexico, casino gambling revenue to the state totaled $64.3 million, just 1.16 percent of the general fund budget.

Admittedly, none of the above examples are statistically rigorous, but they do provide some suggestion that casino gambling revenues aren’t necessarily going to be the panacea for declining tax revenues that some legislators might expect.

And in fact, a 2009 study by the Rockefeller Institute, which tracks and analyzes state fiscal conditions and tax policies, references just that sort of problem with gambling dollars.

The report notes that the “historical tendency for revenues from existing gambling operations to grow at a significantly slower pace than other state revenues may hold important lessons for states as policymakers consider further expansion of casinos, racinos, and other gambling activities. Expenditures on education and other programs will generally grow more rapidly than gambling revenue over time. Thus, new gambling operations that are intended to pay for normal increases in general state spending may add to, rather than ease, long-term budget imbalances.”

We are, of course, a long way from any concrete consideration of establishing casino gambling in Georgia. But if, as it appears, that day will soon be upon us, lawmakers should resolve to take a careful look at it before taking any action.