Casinos' economic harms trump gains

By David Blankenhorn, Guest columnist

The gambling lobbyists who've converged on Tallahassee are excellent at making promises. Fantastic economic growth, billions in new revenue, smarter children, redder roses — all this and more will soon be ours, they assure us, if only Florida's legislators will give them what they want, which is a string of Vegas-style casinos in South Florida.



But while gambling-industry leaders make rosy predictions about the future — after all, these are the folks who say that putting your money into their slot machines will bring you "luck" — they are noticeably reluctant to discuss what is actually happening in the United States right now. This reluctance should not surprise us. Recently, a group of 40 scholars and leaders from across the country (I was one of them) carefully reviewed the current social-science evidence on the role and impact of casinos in America. Our report, "Why Casinos Matter," makes it quite clear why gambling advocates would rather predict the future than discuss the present.

First, independent research overwhelmingly shows that casinos do not contribute to economic growth over time, mainly because they don't produce anything of value. A tire company makes tires. A doughnut shop sells doughnuts. All a casino does is take your money. That's why most economists conclude that gambling doesn't create wealth; it just redistributes it. In addition, casinos contribute directly to economic problems, including higher crime rates and higher levels of bankruptcy and household debt. That's why, according to many economists, casinos not only fail to help the economy, they actually weaken it.

The gambling industry likes to brag that new casinos will provide jobs for the construction workers who build them and the people who work in them. That's true. But what they never tell you, and what study after study shows, is that those economic gains are typically outweighed by the larger economic harms that casinos represent.

Second, a range of careful studies shows that from 35 percent to 55 percent of all revenue from casino gambling comes from problem gamblers — people whose excessive gambling is causing serious harm to themselves and to those around them. Casino owners say that only a small proportion of Americans are problem gamblers. That's true. But what's just as true, and what they'd apparently rather not admit, is that their business model depends decisively on money taken from highly vulnerable problem gamblers. Would we want our government to favor and help to expand the liquor industry if half of that industry's income came from alcoholics?

Third, casino gambling today primarily means slot-machine gambling. Casino owners like to create ads showing happy, upscale people watching a spinning roulette wheel or playing card games at a table. But the reality is quite different and much uglier. More than two-thirds of casino revenue today comes from slot machines, and more than two-thirds of casino floor space is devoted to slot machines.

Slot machines are particularly noxious gambling devices. No skill is involved. Slot machines are highly addictive and are intended to be so. They frequently attract vulnerable people seeking temporary escape from fear, depression, stress or boredom.

Slot-machine players are disproportionately lower-wage workers, minorities and retirees — the people least able to afford the inevitable losses. And of course, the players can't win. Some individual spins win more than was bet, but no steady player can beat a slot machine. That's why casino owners love them. If you put your money into one, you are betting against a computer that has been programmed to cause you to lose. Slot machines are rip-offs, plain and simple.

Finally, legalizing casinos is a terrible way for the government to raise money. It's regressive, basically a transfer program from the have-nots to the haves. It's quite costly. One respected study shows that every dollar going to government from casinos is matched by about $3 in social costs. And it's shockingly inefficient. The proportion of a gambler's losses that goes to government is fairly minor compared to the amount that goes to the casino owners, with no positive social result.

When casino owners lobby lawmakers, the big promises flow thick and fast. And who knows? Maybe tomorrow, all evidence notwithstanding, horses will fly and we'll all get something for nothing. Wanna bet on it?

David Blankenhorn is president of the New York City-based think tank IAV and a signatory to the report Why Casinos Matter: Thirty-One Evidence-Based Propositions from the Health and Social Sciences.

http://articles.orlandosentinel.com/2014-02-21/news/os-ed-casino-gambling-florida-022314-20140220_1_problem-gamblers-slot-machines-new-casinos