Townhall...
The Myths About Legal
Gambling
By Steve Chapman
6/5/2011
Illinois is on the verge of a major gambling expansion, and citizens
are being pelted with competing claims. The advocates envision a gusher
of jobs and tax revenues. The opponents brace for an epidemic of
bankruptcies, crime, divorce and suicide. Which side to believe?
Neither.
Democratic Gov. Pat Quinn is now considering whether to sign or amend a
measure authorizing five new casinos, including one in Chicago, and
slot machines at racetracks as well as Chicago airports. The capacity
of gambling establishments in Illinois would more than triple.
The motive for this sudden interest is economic. Chicago Mayor Rahm
Emanuel expects up to 10,000 new jobs from opening a casino that will
be owned by the city. Legislators eagerly anticipate a windfall of tax
payments and licensing fees, which they can use to ease the state’s
painful budget crunch.
But all that glitters is not gold. More gambling opportunities may not
mean more gambling proceeds, since the public appetite is on the wane.
Illinois casinos have seen their revenue fall by a third over the past
three years. Increasing the number of outlets could mean just dividing
the take into smaller piles.
Is Chicago likely to reap big economic gains? Not in this lifetime. A
new casino may attract more visitors and create new jobs serving drinks
and dealing cards. But money lost at the blackjack table can’t be spent
on other types of recreation and entertainment. Jobs that spring up in
gambling-related businesses may be lost in other sectors.
Casinos have been useful in reviving depressed areas, according to the
1999 National Gambling Impact Study Commission Report. That may have
little relevance to Chicago, which is not exactly a declining Rust Belt
relic.
The best hope is that the city will draw players who now venture to
northwest Indiana, which has made itself a local gambling destination.
But any gain here would come at the expense of the people in and around
Gary, if that counts for anything.
We also need to account for diminishing returns: If you’re thirsty,
your first swallow of water is a lot more gratifying than your 11th.
There are already nine casinos in Illinois, with another due to open
next month. Even if the first few gambling halls make an economic
difference, the extra benefit is bound to shrink with each new one.
As for tax collections, politicians shouldn’t dream too big. “Gambling
has been a fiscal winner for state governments, but the bonanza years
may be ending,” reports the Nelson A. Rockefeller Institute of
Government in New York, suggesting that most states will “have to look
elsewhere to solve this year’s budget problems.” A short-term help,
maybe, but not a long-term solution.
If legal wagering doesn’t lead to El Dorado, the mythical land of gold,
it also doesn’t descend into the inferno. Groups like Stop Predatory
Gambling depict casinos and racetracks as demonic agents spreading
social disaster. They aren’t.
Crime? It tends to rise in a city when casinos arrive -- but only
because there are more people around. “Typically, when tourists are
considered in the crime rate, any effect of casinos on crime diminishes
or disappears,” notes Douglas M. Walker, an economist at the College of
Charleston.
Suicide and family breakup? Nevada has the fifth-highest suicide rate
in the country -- but New Jersey, longtime gambling mecca of the
Northeast, has the lowest. A 2004 study in the Journal of Gambling
Studies looked at places after they introduced casinos and found “no
widespread, statistically significant increases in either suicide or
divorce.”
Visits to casinos may cause a small increase in personal bankruptcies,
according to a study by Thomas Garrett of the Federal Reserve Bank of
St. Louis and Mark Nichols of the University of Nevada at Reno. But
that’s not grounds for grave concern in this instance. Given the
numerous establishments already available to Illinoisans, they may not
hit the tables any more often once they have more casinos.
In the end, permitting more gambling is a good thing because it
accommodates the desires of ordinary people. Millions of Americans
happily patronize casinos and racetracks each year, and there is no
good reason for governments to stand in their way.
But anyone who expects a major impact, good or bad, from the proposed
expansion is going to be surprised. This measure is not the equivalent
of betting the house. It’s dollar-ante poker.
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