No More Casinos, Please

Tomorrow, New Yorkers will vote on whether or not to allow "as many as seven Las Vegas-style casinos" to be built in New York. Supporters say it's a great way to raise money for schools. Wrong.

State-approved gambling is really a simple issue, the basic facts of which do not change from state to state, despite the endless creativity and diversity of the marketing campaigns that business interests and politicians use to sell it. Business interests (specifically those in the casino business) love casinos because, generally speaking, casinos are a great way to make money. Politicians love casinos because, generally speaking, taxing the revenue of casinos greatly adds to the coffers of the cities and states that host casinos. For these two groups, casinos are viewed as virtually free money.

In reality, casinos do not produce free money. Casinos, like state lotteries, are not really games of chance; they are a tax. In aggregate, their odds are calibrated to ensure a certain return. Lotto tickets have specific odds that give the house an advantage. So do blackjack and roulette and craps. Slot machines, which rake in most casino revenue, are designed to press the buttons of addiction in the human brain, which is just one reason casinos spawn gambling addicts. It is important for voters to remember that for every dollar someone gambles at a casino, they are destined to lose a certain percentage. Casinos do not exist to produce instant millionaires. They exist to take a cut out of the wallet of the vast majority of the people who walk in the door.

The tax of casinos, furthermore, falls disproportionately on people who cannot afford it. If you have ever ridden a free shuttle bus from the Port Authority to Atlantic City, you know that outside of a few glamour spots on the Vegas strip, most casinos are populated by the poor and middle class, hoping against hope for a big win. Most of them, of course, will lose. The taxes that states derive from casinos are not free. They come out of the pockets of the residents of that state. Casino revenues are based on leaving members of the economic underclass worse off than they were before they started gambling. They are a staunchly regressive tax. There are two simple arguments against saturating our state—or any state—with casinos.

1. Using casino revenue to fund social programs is like trying to get rich by pawning everything you own. You are soaking the very people most in need of government help in order to fund government programs to help those people. Normal progressive income taxes are much easier and more rational way to raise revenue for the state. Gambling is a way for craven politicians to raise money from people with little political power in order to avoid pissing off people with a lot of political power (the wealthy) by raising taxes.

2. Even setting aside the moral arguments against casinos, the fact is that American has enough casinos already. Evidence across the nation demonstrates that building more casinos just snatches revenue away from other casinos. In fact, that's exactly what the New York casino measure is all about: trying to claw back some of the money that New Yorkers spend at casinos in neighboring states (at a time when Atlantic City casinos are seeing their value decline by billions even without the added competition). This pitting of one state against the next does nothing for society as a whole. Perhaps if each new casino magically generated a totally new billion dollars for the state, one could make an argument that directing that revenue into good causes would ensure that the money would produce a net social good, even if it was basically a regressive tax. But that's not the case.

Government should not be in the gambling business. If our governor wants more revenue to fund social programs and education (and he should), take it from those who can afford it. Slot machines are not an honest economic policy.

[Photo: AP]