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The Gambling Gambit

Background

With 12 million people, Pennsylvania is a prime market for legalized gambling. The gaming lobby has gained the support of public officials who see gaming as a way to "painlessly" raise tax revenues.

Since the 1970's, bills have been introduced in the Pennsylvania legislature to legalize riverboat and land based casinos, and expand machine gambling sites.

In 1994, gubernatorial candidate Tom Ridge was heavily backed by the Pennsylvania gambling lobby. He promised to sign legislation expanding legalized gambling if that legislation included a provision for a non-binding state-wide voter referendum

In October 1997, the House Judiciary Committee unexpectedly tabled proposed legislation to put three gambling expansion measures on the May 1998 ballot.

New reports indicated that Governor Ridge preferred a 1999 (after the election) timetable to bring gaming legislation to passage.

However, according to the Johnstown Tribune-Democrat, "The bill may indeed surface again before 1999. Some speculate it's a money-raiser - a way to generate campaign cash from wealthy sources."

After the voters defeated the Pittsburgh Renaissance tax this November, Rep. De Weese, Minority Leader of the Pennsylvania House, announced that the answer to Pittsburgh's revenue problem might be riverboat gambling.

Economics of casino gambling

Casinos are incredibly profitable - to their owners. For example, the Washington Post reported that the Empress riverboat in Joliet, Illinois paid $87 million in dividends in its first 18 months.

But do casinos also benefit their communities?

A 1996 study, "Monetary Impacts of Riverboat Casino Gambling in Illinois" by William Thompson of the University of Nevada - Las Vegas, and sponsored by the Better Government Association of Chicago, on results in Illinois found:

  • 61% of the gamblers lived within 35 miles of the casinos
  • Illinois casino communities showed local net economic losses of $239 million per year.

Tourism benefits also have proven non-existent.

A 1993 study by the Minnesota Restaurant, Hotel and Resort Association found nearly 40% of respondents had lost business. Association Vice-president Arnold Hewes told Restaurants USA magazine, "[In] restaurants within a 40-mile radius of casinos offering food service ..., sales have dropped anywhere from 20 to 50 percent."

Problem Gambling

In Dec. 1995, the Minnesota Star-Tribune reported that "legalized gambling in Minnesota has created a broad new class of addicts, victims and criminals whose activities are devastating families and costing taxpayers and businesses millions of dollars." The paper estimated a cost of $300 million per year.

Loss Prevention Specialists, Inc. of Minnesota told the paper that prior to casinos it had "zero cases of gambling related embezzlements," but since then it has cases running "well over $500,000", including an assistant bank manager and a woman who lost over $120,000 of her church's funds.

"When she played 'real fast,' Betty Yakey believed she could outsmart the video poker machine... 'There was one machine that I could confuse the most,' recalled Yakey, a 65-year-old widow with three children and four grandchildren. After months of confusing that machine, Yakey lost $190,000."

Washington Post, 3/4/96
"Addiction: Are States Preying on the Vulnerable?"

Henry Lesieur, professor of criminal justice at Illinois State University, surveyed Gamblers Anonymous members there. He found: 44% had stolen from work, 18% had gambling related arrests, and 17% had been sued for gambling related debts.

A 1994 report, "Social Impact of Gaming", issued by a group of 40 social service agencies in Mobile County, Alabama, asked for an additional $15 million in that county to cover "the projected increase in needs if gambling is legalized". The projection was based on the experiences of social services in areas where casinos already existed. The needs included:

  • Additional school aides and tutors for students who come to school unprepared, hungry and sleepy because parents were out late gambling.
  • A 24-hour childcare program to handle the children of casino employees.
  • Additional counselors to handle soaring family counseling and consumer credit counseling needs.

"Our office has seen an increase in the number of child abuse and neglect cases ... from the children left in their cars all night while their parents gamble ... to the children left at home alone while single mothers work the casino late shift, to the household without utilities or groceries because one or both parents have blown their paycheck gambling."

Testimony of States Attorney Jeff Bloomberg
before U.S. House Committee on Small Business - 9/21/94

In Biloxi, Mississippi, crisis calls to the Gulf Coast Women's Center rose from about 400 per month in 1992 to between 700 and 900 per month in 1995. Center director Jane Phila told the New Orleans Times, "Free alcohol and gambling losses can fuel the rage that produces violence."

Divorce rates in Biloxi jumped 250% after casinos opened.

Gaming & Government

Aside from the obvious potential for influence peddling when extremely wealthy casino operators vie for state licenses, the connection between gambling and tax revenues compromises the ability of government to make objective decisions.

Robert Goodman in his United States Gambling Study explains that government becomes a gambling promoter rather than a gambling regulator. For example, Iowa removed the bet and loss limits on its riverboats, dropped the rule that boats must cruise while gambling, and allowed the opening of the state's first racetrack casino while the state's own study was showing that problem gambling had more than tripled.

Will Pennsylvania join the ranks of the gamblers? Or will it join Virginia, Texas, Florida, Ohio and Washington, D.C. in rejecting casinos?

Gaming in Pennsylvania

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