Greedy Governments and Gambling

Reports Spell Out Social Costs

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By Father John Flynn, LC

ROME, APRIL 20, 2012 ( With economic growth still anaemic and tax revenue down, governments are hoping that they can find additional funds by allowing more gambling.

In New York, Governor Andrew Cuomo is proposing to change the state Constitution in order to legalize commercial casinos.

In Michigan two separate casino development campaigns are under way to persuade voters, who have to approve new casinos, to allow a total of 15 new casinos across the state.

Ohio’s first casino will open in May in Cleveland. Another will open a few weeks later in Toledo, with two more to come later. In November this year voters will be asked to approve another casino, which would make it the fifth to be approved.

Meanwhile, in Maryland plans are under way for a vote in November on allowing a sixth casino and adding table games at all state casinos.

A Washington Post editorial on April 4 criticized the proposal, saying that past estimates regarding the amount that would be raised from gambling taxes to pay for education were over-optimistic.

The paper explained it also opposed gambling because of the social ills that result and due to its unfair impact on the poor.

The negative impact of gambling was highlighted in a paper published in January by the Center for Public Conversation at the Institute for American Values.

Based in New York City the center’s paper “America’s Bad Bet: Why the Growing Government-Casino Partnership is a Deal with the Devil” was written by Paul Davies.

He pointed out that in comparison with a few decades ago, when gambling was limited to Las Vegas and Atlantic City, there has been a gambling explosion that has intensified in recent years. There are now 500 casinos in 27 states.

Arms race

“State after state is scrambling to add new sources of gambling to attract and retain customers,” he said. “It is fast becoming a gambling arms race.”

In 2010 alone gambling legislation was presented in 20 states, he noted.

The most recent official statistics on the scale of gambling are from 2006. In that year Americans lost $91 billion on all forms of gambling.

The lure of getting rich quickly plays well in the contemporary cultural mentality of instant gratification, he added. The majority of gamblers come from those groups least able to bear the burden of their inevitable losses: seniors, minority groups and the working class, he observed.

Davies cited data estimating that the four casinos approved already to open in Ohio will lead to 110,000 problem and pathological gamblers.

Gambling is also linked to organized crime, Davies explained. When it was approved in Pennsylvania in 2004 two of the 11 initial licenses were awarded to convicted felons.

Legislators remain uninterested about reforms. “That’s because many of the reforms would undermine the river of money flowing into state coffers via the casinos,” Davies said.

Gambling advocates argue that gambling creates jobs. Davies noted, however, that many of them are low wage jobs. The service workers in Atlantic City, for example, are paid $12 an hour.


The link between gambling and crime was analyzed further in a report published by the Stop Predatory Gambling Foundation. The study, “Casinos and Florida: Crime and Prison Costs,” was published earlier this year.

It estimates that introducing gambling into the Miami-Dade County in Florida will lead to $3 billion in costs for the prison system over a 10-year period.

The paper explained that the most thorough peer-reviewed study of the impact of casinos on crime to date was “The Review of Economics and Statistics” in 2006 that examined the relationship between casinos and crime for every year from 1977 to 1996 based on FBI and U.S. Census data.

In 1996, 8% of crime could be attributed to casinos, with a cost to each adult of $75 a year in 1996 dollars. Five years after a casino opens, the study found that property crime increased by 8.6% and violent crime by 12.6%.

The study also examined crime rates in neighboring counties and found no decrease there, leading the authors to conclude that crime did not just move, but actually increased.


One argument used in favor of gambling is that the clubs and casinos give a part of their revenue to fund local community groups. A report just published in Australia shows, however, that this support is not worth the costs associated with gambling.

Last Sunday the charitable organization UnitingCare Australia released a report it had commissioned from Monash University. It assessed poker machine spending and community benefit claims.

In the state of New South Wales poker machine users lost almost $A5 billion in 2010-11, amounting to $A1,003 per adult. The amount donated to communities in the state from the gambling industry was $63.5 million, representing 1.3% of poker machine losses. In the states of Victoria and Queensland, the proportions were 2.4% and 2.3% respectively.

Poker machines, the report concluded, “provide an extremely inefficient and high cost method for funding community sporting and charitable activities.”

More gambling might seem an attractive option for governments, but at great detriment for people whose welfare they are elected to protect.

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