Fools' Gold? Yup!
REPEAL THE CASINO DEAL is the only sensible solution!
Casinos are financial equivalent of strip mining
Editor's note: This column was written before the House rejected all casino bills on March 12. It became timely again on Thursday when the Senate passed a bill for two casinos that now will go to the House.
Yet another round of the apparent endless gambling game is upon us. Despite the high stakes on the table, this isn't a Republican issue or a Democratic issue. More importantly, it is an issue that strikes at the heart of what "We the People" want for our state and our citizens.
I rarely intervene in policy debates but state-sponsored gambling is an issue of enormous proportions and considerable significance that deserves the understanding and participation of every citizen. I previously put aside my professional role and wrote a column titled "Fool's Gold." I argued that far from addressing our long-term fiscal challenges, the adverse financial, social and regulatory consequences of casino gambling would merely exacerbate them. Moreover, I questioned the long-term economic assumptions provided by the lobbyists who supported expansion. I wondered why New Hampshire should feel the urgent need to embrace gambling when so many surrounding states have or will soon have casinos and when so many earlier casinos have gone bankrupt. In addition, expanded gambling will introduce a host of other problems.
Do we really believe we will compete against a multimillion-dollar casino just a few miles south of us?
I also asked whether lawmakers understood the potential for corruption in a state with little or no regulatory framework to handle such a sophisticated industry. For those lawmakers seduced by the lure of seemingly easy revenues to shore up our perennially strapped state budgets, it's important to remember that most of that money coming into state coffers will be in the form of a regressive tax on state residents. This is a cold hard fact — not just an opinion. What reason is there to believe that expanded gambling will enhance the New Hampshire advantage and improve the quality of life in our state?
Anybody with even a basic knowledge of finance or the casino industry knows that gambling is the equivalent of financial strip mining — much is taken but only deep scars are left behind. Much of the promised financial bonanza is never delivered because the partnership between the state and the gambling industry is a flimflam played on the public. Most of the real financial benefits will go to out-of-state casino interests who do not have our state's interests at heart. This might explain why opposition to expanded gambling in our state has stirred so many bipartisan activists.
I did some additional research and one trend struck a powerful chord because of the financial challenges facing so many seniors and aging baby boomers. Most have simply saved too little for their financial security and are looking for a quick fix. The gambling industry loves senior citizens with plenty of time on their hands and some additional disposable income. New Hampshire provides a proverbial jackpot with almost 15 percent of the state's population being 65 years or older in a state with incomes above the national average. Why should the gambling industry subsidize buses to Connecticut, Rhode Island or Massachusetts when they can fleece the boomers and seniors closer to home in New Hampshire?
The casino industry was ardent in drawing on ever-younger customers in larger numbers. Yet since the 1970s when gambling began to expand beyond Las Vegas with casinos in Atlantic City and the emergence of Native American casinos, senior citizens have proven to be a consistent cash-cow market. Given our society-wide addiction to small-screen electronic devices, it's no surprise that the casino industry targets senior citizens who are drawn to the visual allure of the video poker screens and the slots. Regional reports of gambling related debts and foreclosures are on the increase as a result.
A 2008 Wayne State University study looked into the growth of the addictive problem of gambling in older adults and reported:
- Seniors are drawn to casinos for both extrinsic and intrinsic reasons — the thrill of gambling and a positive environment that welcomes them.
- Researchers found that casinos were becoming the new senior centers — and the industry was doing its best to keep these elderly customers coming back for more with added amenities including oxygen tanks.
- In addition to financial challenges, older adults with gambling issues can also have unique risks such as reduced cognitive capacity that the casino industry can profitably exploit.
During her State of the State speech earlier this year, Gov. Hassan warned lawmakers that "our state will begin to lose $75 million per year to new casinos right across our border in Massachusetts. Developing New Hampshire's own plan for one high-end destination casino will create jobs, boost our economy and generate revenue to invest in critical priorities."
That is one hopeful, but perverse, way to look at it. As The Economist magazine recently reported, the worldwide gaming industry had revenues of more than $440 billion, with our fellow citizen's losses in the United States leading the pack at $119 billion. The casino always wins. How much will the people of New Hampshire lose in their pursuit of fool's gold?
Though there might have been a strategic revenue and gambling option along our southern border years ago, in the same way we once sold cheap cigarettes and liquor, that opportunity has long since evaporated. New Hampshire lawmakers should understand the significance of their actions before they take the gambling plunge and sanction a fleecing of our fellow citizens.
Tom Sedoric of Rye is a nationally recognized financial adviser and serves as chair of the advisory commission to the state of New Hampshire Department of Resources and Economic Development.