Editorial: Will legislators ask the right gambling questions?
by JAMES A. SMITH SR.
Executive Editor

Article Date: Jan 22, 2013

Following the direction of Florida Senate and House leaders, a newly appointed Senate Gaming Committee is making plans for a “comprehensive” study of the status of gambling in the Sunshine State. The study is a part of a go-slow approach in which no gambling legislation is promised in this year’s legislative session while the state’s complex web of gambling laws are evaluated.

However, there’s reason to be concerned whether the careful evaluation of gambling to be undertaken will include the vital matter of its social and economic costs.

Senate President Don Gaetz, R-Niceville, created the Gaming Committee late last year. The mission of the panel is to come up with a new gambling policy that coherently addresses the various kinds of gambling in the state.

“We have plenty of gaming in Florida, but that’s a result of bailing wire, chewing gum and band-aids substituting for a real policy,” Gaetz said in September.

Among the many issues to consider is the state’s $1 billion compact with the Seminole Indian Tribe, passed by the Legislature in 2010 (after the Florida Supreme Court forced then-Gov. Charlie Crist to get legislative approval). Additionally, there are the pari-mutuel facilities dotted across the state, their “racinos” cousins in South Florida offering limited Las Vegas-style games, the growing number of “Internet Sweepstakes cafés” gambling parlors and the Florida Lottery, which is celebrating its 25th anniversary this year. Then there’s the so-called “destination resorts” casinos major players in the gambling industry want to build in Florida.

House Speaker Will Weatherford, R-Wesley Chapel, who is a member of Idlewild Baptist Church in Lutz, is in agreement with the go-slow approach.

“It’s really hard to focus on one aspect of gaming,” he said in September. “I think it deserves to be looked at more holistically.”

A truly holistic approach must include the social and economic costs of gambling.

“Gambling cannibalizes existing jobs, commerce and tax revenues and leaves state taxpayers with the burden of paying for addiction, destitution and crime that are obvious side effects of this predatory industry,” said John Sowinski, president of No Casinos, in a statement last week.

“It’s time for a serious analysis of the very real social and economic costs of gambling,” he said.

One should not have to be anti-gambling partisan like Sowinski (or me) to see the wisdom of this view.

Indeed, three years ago when the Florida House was dealing with the Seminole compact, a special committee heard testimony from a non-partisan expert on gambling. In months of work on the compact, the panel devoted one, one-hour session to the social and economic costs of casino gambling.

Even with such a limited opportunity, the session was revealing. I attended the hearing and reported the findings.

Drawing on studies across the United States and Canada, Earl Grinols, distinguished professor of economics at Baylor University, told the Select Committee on Seminole Indian Compact Review social costs to the government resulting from casino gambling is three dollars for every dollar generated by the activity.

“Casino gambling simply doesn’t pass the cost-benefit test,” he said.

Grinols’ research, it’s important to note, was not funded either by pro- or anti-gambling organizations.

“If gambling had no social costs your committee wouldn’t need to exist. It’s just another industry. It’s entertainment; so let people entertain themselves. But it does affect more than just the gamblers themselves,” said Grinols, author of Gambling in America: Costs and Benefits.

Grinols said a Canadian study found that nearly half of revenue generated at casinos is from problem and pathological gamblers.

Contrary to claims of some advocates, a significant percentage of gamblers—as high as 70 percent—are “convenience” gamblers residing within 35 miles of the facility, rather than tourist or destination gamblers.

“So you’re getting the money from locals and you’re getting it from the wrong locals and that’s just an inescapable fact at casino-level gambling,” he said.

Grinols noted tragic examples of the consequences of gambling, citing newspaper articles about victims of suicides, embezzlement, bankruptcy and other social ills resulting from persons entrapped by gambling. He presented a long list of crimes, pathologies and social problems in which Nevada—home to gambling Mecca Las Vegas—is first or among the leaders in the nation, including first in suicide (double the national average), divorce, gambling addictions, women killed by men, child abuse deaths and per capita bankruptcy.

While the national crime rate has generally declined in recent years, Grinols said his research found the crime rate of counties with casinos has decreased considerably less than those counties without casinos. 

Grinols rejected gambling advocates’ claim that crime associated with gambling is related to the fact that the activity simply draws large numbers of people. His research found incredibly higher crime rates for Las Vegas compared to high tourist destinations not associated with gambling.

“If you’re thinking of casinos as a method of gaining tax revenue, it’s a pretty poor choice,” Grinols concluded.

Grinols’ compelling testimony was hardly a speed bump on the way to the Legislature’s approval of the casino expansion in the Seminole compact.

After his appointment, Sen. Garrett Richter, R-Naples, chairman of the Senate Gaming Committee, said he approaches his task “without any preconceived notions.” He promises a “very deliberate process” that will carefully evaluate Florida’s gambling laws as opposed to a “knee-jerk response.”

“Armed with facts, you can have a more productive philosophical conversation,” Richter said Jan. 14 after the committee’s first meeting.

The facts offered by Grinols three years ago must be part of any comprehensive study today.

For now, the gambling industry is talking nice about going along with a legislative ceasefire on gambling legislation, even while its horde of lobbyists will be seeking to influence the “very deliberative process.” 

Among other interests, the Malaysian-based Genting Group, which invested major resources last year in its failed “destination” casinos legislation, announced it would back away from its plans for a 2014 statewide ballot initiative for mega casinos.

That Genting has stood down on its ballot initiative is not an indication of standing down from its desire to bring mega casinos to Florida—or disengaging from the political process.

Indeed, mere days after announcing it would cooperate with legislative leaders on its deliberative approach, a Genting-related firm, Bayfront 2011 Development LLC, “dropped” $100,000 “into the coffers of the Let’s Get to Work electioneering organization” for the reelection of Gov. Rick Scott, according to Sunshine State News.

There’s plenty of reason to be concerned about the independence and legitimacy of a comprehensive gambling study. Legislative leaders have a duty to demonstrate transparently that such a study will not be unduly influenced by the industry that it is evaluating.

One of the clearest ways transparency can be demonstrated is by asking serious questions about the social and economic costs of gambling—and not ignoring the answers on their way to establishing a new gambling policy.

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