Legalized Gambling: Casinos aren’t the answer to New York’s problems

Legalized Gambling: Casinos aren’t the answer to New York’s problems
The Post-Standard Editorial Board

State-sponsored gambling makes us queasy. Government should not be in the business of encouraging people to part with their money in games of chance they are statistically unlikely to win. Even so-called harmless forms of gambling like the lottery disproportionately prey on poor people who hope to hit it big. That’s a regressive tax.

Two recent developments would expand the state’s role in gambling — something that should give pause even to tapped-out New York taxpayers.

First, a recent decision by the U.S. Justice Department cleared the way for the state to get into the business of online gambling. The New York Lottery had simply asked whether it was OK to sell lottery tickets online. It received permission to do pretty much anything short of sports betting across state lines — including online poker games and virtual slot machines. New York lottery officials plan to go slow, but the rush is already on among other states to see who can cash in first on billions of dollars in revenues.

Second, Gov. Andrew Cuomo is pushing an amendment to the state constitution that would legalize casino gambling in New York. In his State of the State message earlier this month, Cuomo said New York is passing up $1 billion in economic activity by not allowing casino gaming outside of a handful of tribal casinos and racinos in the state. On Tuesday, in a letter to the Legislature, Cuomo took pains to separate the state’s plan to build the nation’s largest convention center at Aqueduct Raceway, in Queens, from the gaming amendment. But it seems pretty clear that a casino would be integral to the convention center’s success.

One of Cuomo’s arguments for opening casinos in New York — that we’re surrounded by states that allow it — also cuts the other way. The Institute on Taxation and Economic Policy argues that competition from other states makes state-sponsored gambling less profitable. “As more states seek a piece of the gambling pie, every other state’s share of the pie will decline — and more of each state’s gambling revenues will come from the pockets of its own citizens,” the group states in a policy brief.

ITEP also points out that a state depending on gambling revenues to fund public services is put in the unseemly position of encouraging its citizens to gamble more. States with legalized gambling also take advantage of compulsive gamblers, who have an addiction. The state taxes other addictive behavior — smoking, for example — but at least it can claim it’s trying to discourage an unhealthy practice by raising the cost of pursuing it.

While proponents of legalized gambling point to the jobs and tax revenues it would create, compulsive gambling creates social costs that also must be borne by taxpayers, from increased debt and bankruptcies to unstable home lives for the children of gamblers.

Problem gamblers may be the minority of those who enjoy gambling. But you can be sure that if New York state makes it easier to gamble — through lottery games over the Internet and smart phones, or through the proliferation of bricks-and-mortar casinos — the number of problem gamblers will grow.

A temporary infusion of gambling revenues won’t solve New York’s spending problem. It will only put off the day of reckoning.