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

Portsmouth courts social ill

Portsmouth courts social ill
The Virginian-Pilot
December 15, 2013

There are any number of good reasons, especially in Portsmouth, to fight the huge fees coming for the Downtown and Midtown tunnels: The regressive nature of the tolls; the further atomization of a fragmented region; the precedent they set for a community defined by river crossings.

But replacing one complex set of social ills with the ones caused by gambling is perhaps the worst solution floated so far.

State Sen. Louise Lucas is, once again, pushing for Portsmouth to accept casino gambling. Last year, she promised that gambling revenue would allow Portsmouth to lower its property tax rate. This year, she claims it would allow Portsmouth to cut the Elizabeth River tolls due to begin in February.

In reality, it would burden an already burdened city with an industry that takes a horrifying toll on its host.

Today's casinos, according to a study panel convened by the Institute for American Values (http://www.americanvalues.org/) "are affecting our health, our economics, our politics, our ideas and social values, and perhaps even our sense of who we are as a people and what obligations we have toward one another. [Casinos] appear to be connected in important ways to the rise of American inequality."

The IAV panel - the Council on Casinos - compares the rise of local gambling with the spread of payday lenders and fast-food franchises.

Modern food is carefully engineered to make us crave it. If you give in to that craving too often, it will destroy your health. Modern casinos are engineered to make us crave the thrill they create. If you give in to that craving too often, it can destroy your financial and emotional health.

Unlike destination casinos, with their table games and vacation crowds, "regional casinos" depend on repeat visits by nearby habitual gamblers. The casinos depend almost wholly on slot machines - sophisticated computers manipulated to separate gamblers from their money.

People with gambling problems account for "40 to 60 percent of slot machine revenues," according to the IAV report, entitled "Why Casinos Matter." Casual players - which the casinos claim to target - produce a paltry 4 percent of revenue, according to a Canadian study. Indeed, according to the IAV report, people within 10 miles of a casino are twice as likely to have a gambling problem.

The nonprofit Institute for American Values aims "to renew civil society." It brings together all kinds of thinkers from all kinds of perspectives to consider big issues affecting America. Its focus at the moment is on bolstering the institution of marriage, invigorating thrift and strengthening shared values.

For the report, the Council on Casinos reviewed a number of studies, many of them done abroad.

Reliable data on gambling in America has long been difficult to find. There is little research financed by anyone other than the industry, and the rise of regional casinos is a relatively new phenomenon.

The IAV's report - while also urging more and better research - found that in addition to harm to gamblers, casinos do serious damage to communities, lowering property values, weakening nearby businesses and redistributing wealth from the poor to the rich.

Portsmouth already has the lowest per capita income in Hampton Roads and one of the highest poverty rates. More than 40 percent of the city's property belongs to entities that don't pay taxes. But the deleterious impact of gaming extends far beyond any city's borders.

Gambling puts a state in the hypocritical position of needing the revenue while having the responsibility to protect citizens from exploitation. Virginia faced the same dilemma on tobacco.

Because the commonwealth's financial health depended on the industry, it was late and begrudging in taking steps to regulate cigarettes and recoup the massive social costs of smoking.

Virginia - and its lawmakers - should do everything they can to avoid a similar mistake with gambling.

Gov.-elect Terry McAuliffe and lawmakers have pledged to search for a way to lower the tolls on the Midtown and Downtown tunnels. They are likely to find that task difficult given the sweetheart terms of the deal with Elizabeth River Crossings. Still, that effort should continue, even as lawmakers send Lucas' gambling proposal to oblivion.

The tolls at the Midtown and Downtown tunnels - $1.84 for passenger vehicles and $7.36 for trucks at rush hour - will affect business and settlement patterns across Hampton Roads, changing where people live and work and play. They will change this place for generations to come.

The terrible and well-understood social costs of gambling are about the only things that make those tolls look harmless.


http://hamptonroads.com/2013/12/portsmouth-courts-social-ill