'Regulation' won't curb casinos' harm

Valley View: 'Regulation' won't curb casinos' harm

May 4, 2013

Written by

Stephen Q. Shafer

When Gov. Andrew Cuomo in 2012 proposed new commercial casinos, he said they would need regulation. Likely reasons: Mitigate problem gambling and protect against cheating and organized crime.

Casino owners want regulation about as much as do big banks: The least possible. Regulation hurts profits by constraining practices (e.g. payday loans) and limiting externalities, costs of doing business that are passed to society at large. A company no longer free to discharge waste into a river faces new costs; paying them may lose it business if competitors avoid similar restrictions and don’t raise their prices. Casinos, in business only for profit, hate to absorb fiscal burdens they have always externalized, like the socioeconomic costs of problem gambling.

The central statistic of casinos: It is estimated that 50 percent of the gross revenues after winnings are paid out (about half the profit) comes from compulsive and problem gamblers — about 4 percent of the adult population — who comprise less than 10 percent of casino customers. From this statistic follows the ethical dilemma: If casinos steered all the pathological and problem gamblers in their sphere into lasting recovery and prevented the creation of any new ones, profits would drop by 50 percent. How would that play on the bottom line? Not well at all. What to do?

Solution: Express concern about problem gambling with a facade of “prevention” methods structured to fail. Accede gracefully to toothless “regulation.”

Legislators weighing “second passage” of a bill meant to legalize new casinos in New York by amending the constitution through public referendum must ask three questions.

“Would those casinos work really hard to profit 50 percent less than many others do?” That’s obvious: No.

“Do I really believe New York state can and will properly regulate casinos if they don’t want it and the state shares in their profits?” Another no.

“Is it fair to New York state residents to commend to them, by a ‘yes’ on second passage, a sham I don’t believe in.” No.

Readers, tell your Assembly member and your state Senator to vote “no” on second passage.

Stephen Q. Shafer is chairperson of the Coalition Against Gambling in New York, http://cagnyinf.org. He lives in Saugerties.

http://www.poughkeepsiejournal.com/article/20130505/OPINION04/305050092/Valley-View-Regulation-won-t-curb-casinos-harm