Editorial: New Florida gambling is a bad bet—and it’s not even close
Mar 1, 2010
By JAMES A. SMITH SR.

As legislators consider gambling expansion to balance Florida’s budget in tough times, they ought to keep in mind a simple mathematical formula: 3-1.

That’s not the odds that lawmakers will approve or vote down gambling expansion. Three-to-one is the ratio of government spending needed to address the social ills created by every additional dollar of casino gambling revenue.

Even Tallahassee politicians who didn’t succeed at math during their school days should realize new gambling is not a solution to what ails the Sunshine State.

New gambling is a sucker’s bet, but seemingly easy money is luring legislators once again, including some with previously sterling anti-gambling reputations.

Rep. Ellyn Bodanoff, R-Fort Lauderdale, and Rep. Alan Hays, R-Umatilla, have recently endorsed new casinos in light of the seemingly insurmountable fiscal realities and the losing battle with the Seminole Indian casinos.

Any legislator seriously contemplating more gambling in Florida should be asked if she or he has carefully considered the groundbreaking research of Earl Grinols. His book, Gambling in America: Costs and Benefits (Cambridge, 2004), evaluates casino gambling revenues and the social costs it produces.

His conclusion? The social costs to government resulting from casino gambling is three dollars for every dollar gained.

Grinols, distinguished professor of economics at Baylor University, assiduously asserts his research is independent, not funded by either side of the debate. Further, he notes, “I have no moral objections to gambling.”

Grinols should be familiar to Bogdonoff and Hays since he testified last March to the House Select Committee on Seminole Indian Compact Review on which they both serve.

“If gambling had no social costs your committee wouldn’t need to exist,” said Grinols at the hearing, which I attended. “It’s just another industry. It’s entertainment, so let people entertain themselves. But it does affect more than just the gamblers themselves.”

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

Grinols cited a Canadian study that found that nearly half of revenue generated at casinos is from problem and pathological gamblers. And, contrary to claims of 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 presented a long list of crimes, pathologies and social problems in which Nevada is first or among the leaders in the nation, including first in suicide (double the national average), divorce, gambling addictions, child abuse deaths and per capita bankruptcy, to cite a few. He said crime associated with gambling is not explained merely by the fact that it draws large numbers of people.

His research compared crime at Las Vegas to that at high tourist destinations not associated with gambling—Orlando; Branson, Missouri; and the Mall of America in Bloomington, Minnesota—to Las Vegas, a gambling tourist destination. Las Vegas’ crime rate is 1,040 percent higher than Branson and 15.7 times higher than Bloomington, Grinols reported, although both destinations draw far more visitors per resident than does Las Vegas. A similar pattern is found when comparing crime rates at large tourist destinations in the National Park System to Las Vegas.

“So it’s not just a matter of number of visitors. It’s also a matter of who is visiting,” he said.

One need not look very far to see the harm wrought by casinos:

“Embezzling grows from addiction to casinos” (Buffalo News, Feb. 17)

“Killer who was compulsive gambler to be released from prison” (Las Vegas Sun, Feb. 17)

“Problem gambling group hears former lawyer’s addiction story” (Louisville Courier-Journal, Feb. 12)

Tragically, these are not isolated cases, but are integrally related to the existence of the predatory gambling, especially casinos, upon which state governments are becoming increasingly reliant—and for which states and cities have failed to realize their expected revenue gains.

An enlightening article in Esquire last September paints well the dire picture faced by states and municipalities banking on gambling money.

“In most jurisdictions, gambling revenues max out quickly,” wrote Nate Silver. “In Atlantic City, for example, which opened for business in 1978, gaming revenues were no higher in 2008 than they were in 1986, and 2009 is on pace to be the slowest year since 1983. Gambling revenues peaked in 2002 in Illinois, in 2000 in Mississippi, and in 2006 in Detroit, which had only begun to permit gambling ten years earlier.”

Silver adds, “What we’ve witnessed, indeed, is something of a race to the bottom,” noting the escalation in gambling as states jumped in to compete with neighbors.

The proliferation of gambling across the nation even further diminishes its already poor ability to generate reliable government revenues.

Once begun, gambling proliferation would inevitably march across the Florida peninsula, as each region demands the ability to compete with the last that obtains new gambling.

The Florida Lottery is a case in point.

Last month the Legislature’s Office of Program Policy Analysis & Government Accountability released two studies that advocated more lottery retail availability, more instant ticket vending machines and participation in Mega Millions, another multi-state lottery only a year after the lottery began participation in Powerball. All of these efforts are to shore up flagging revenues, which are supposedly to the benefit of state education funding.

Truly, it’s a never-ending cycle—and one that is for the worse.

It should not be surprising that I oppose gambling expansion for more than economic reasons. I strongly believe it is immoral for the state to bank on making its citizens losers in a callous and inevitably unsuccessful effort to balance the state’s budget.

Still, on a simple cost-benefit ratio, new gambling does not compute. Florida legislators who insist otherwise do so in the face of overwhelming evidence to the contrary—and, inevitably, to the serious harm of the citizens they serve.

This commentary first appeared at www.FloridaThinks.com, a new website billing itself as a “forum for civil debate.”

You must be login before you can leave a comment. Click here to Register if you are a new user.