A Reckless Gamble
by Fr. Roger Landry - July 9, 2010
In gambling, the house always wins. That's why it is particularly worrisome to see those we have elected to guide us wisely behaving like a desperate gambler in the false belief that casino gambling will rescue us from our economic woes. Just as it would obviously be foolish for an individual in economic difficulties to think that he can gamble his way to financial security, so it is imprudent for our state representatives, senators and governor to think that expanding gambling will bring the state to greater economic stability.
Yet that is the course we are presently on. On July 1, the Massachusetts Senate approved a bill to authorize three resort casinos in Massachusetts, following up the April 14 move by the House of Representatives to pave the way for two casinos and the expansion of slot machines at racetracks. Presently the two chambers are working to reconcile the differences in the bills in order to pass something that Governor Deval Patrick, a strong support of bringing casino gambling to the Bay State, can sign. The subject is particularly relevant to those in southeastern Massachusetts, where city leaders in Fall River and New Bedford are aggressively seeking to bring one of the possible future casinos within their municipal boundaries.
Proponents of authorizing casino gambling argue that casinos will create thousands of good jobs, stimulate tax revenue that will help balance the state budget, enable more money for cities and town, and recover billions of dollars that Massachusetts residents lose at Connecticut resort casinos. But all claims are exaggerated.
It is certainly true that casinos will create temporary construction jobs — as any new large-scale building project would — as well as some permanent jobs. But they will also cost jobs as casinos always negatively impact many small businesses in the areas surrounding the casino, like restaurants, hotels, retail outlets and entertainment establishments. With regard to the jobs gained, it is important to note that casino jobs are listed by Forbes magazine as among the worst paying ones in America. The U.S. Department of Labor in 2007 calculated that the median hourly wage for gambling service employees was $6.34, for an annual salary of $13,179. As the commonwealth looks at job creation, we should be trying to create good jobs that will at least help people get over the poverty line — and it's obvious that the vast amount of money transferred from gamblers to casino owners does not make its way back to the employees.
It is also true that, in addition to paying one-time licensing fees, casinos will generate tax revenue for the Commonwealth. Casino proponents, however, generally mention only "gross" tax revenue figures, which are often exaggerated, rather than what could be called "net" tax benefits after we factor in the enormous costs. Attorney General Martha Coakley testified in June that, based on the experience of other states, there would need to be a new state commission with at least 500 employees — at the likely cost of $20 million annually — needed to audit, regulate, inspect and oversee the casinos and deal with the increased problems of money laundering and organized crime. Cities and towns close to casinos often have to pay for millions in expanded police details for traffic, emergency calls and increased crime (especially DUIs, robberies, burglaries, car thefts, prostitution, aggravated assaults, domestic violence and child neglect), for road repairs and expansions, and other services; Connecticut Attorney General Richard Blumenthal admitted at a public forum that his state had made a huge mistake in not planning adequately for the local impacts casinos have. There's also the lost tax revenue from the many small businesses that are run out of business when a huge resort casino moves in. Finally, there is the enormous fiscal pricetag for the huge social costs concomitant with casinos: bankruptcies, foreclosures, family violence and breakups, treatment for addictions, underperformance at work and more. The Attorney General of California estimates that it pays $1 billion per year for social costs associated with gambling. The 1999 National Gambling Impact Study, funded by the U.S. government, concluded casinos bring with them a 50 percent increase in the number of problem gamblers within a short driving radius, which in a state as compact as Massachusetts, with three possible casinos, will cost Massachusetts mightily. U-Mass Dartmouth's Center for Policy Analysis estimates that gambling addiction in Massachusetts already costs $170 million annually; with the licensing of three casinos, estimates are that those costs could rise to as much as $750 million annually. The Senate bill at least recognizes these costs and has earmarked 2.5 percent of proceeds to go to treating gambling addictions. But this is totally inadequate, financially and philosophically: We would never legalize addictive narcotics for economic purposes thinking that concern for the common good would be satisfied by setting aside one out of every 40 dollars earned by drug dealers to treat the new wave of addicts.
With regard to the millions of tax dollars that some Massachusetts legislators say are lost at Connecticut casinos, this, too, is exaggerated. The generally accepted estimate is that in 2009, Massachusetts gamblers contributed $93 million to the Connecticut treasury. This figure, however, is identical to what the Greater Boston Chamber of Commerce predicts will be a ten percent decrease in state lottery revenues should casinos be introduced in Massachusetts, leading to no economic gain at all. As the United to Stop Slots in Massachusetts website (uss-mass.org) notes, for the Commonwealth to collect $200 million in tax revenue, 40,000 people would have to lose $234 every day, 365 days a year. Those concentrated figures are relevant, because casinos make 90 percent of their revenues from 10 percent of their patrons, and forty percent of these latter patrons are gambling addicts. For the state to make the tax revenue figures proponents are promising, it would need residents and visitors to spend — and lose — large amounts of money at these casinos. Also, the more Massachusetts residents spend at casinos, the less they will have to spend on clothing, electronics, furniture, automobiles and other local products. One 2004 study showed that for every $1,000 in increased casino revenues, businesses within a 30 mile radius lost $243.
In terms of the economics, which is the main argument being cited by casino proponents, it's important to recognize that casinos do not really create revenue — like, for example, high-tech or manufacturing jobs do — but basically transfer revenue from other, healthier, more productive sectors. There are some short-term gains do to licensing fees, but similar to a gambler who wins big on the first hand of cards or play of the slots, the longer the Commonwealth continues to gamble with casinos, the more it — and its citizens — will lose due to lost businesses and jobs in other areas, increased costs for police protection and social services, as well the enormous human costs. To go into business with casinos, which make most of their money not from recreational gamblers who go for fun and entertainment but by preying on the four percent of addictive gamblers who can least afford it, is civically irresponsible. Is it wise and good for the welfare of the state for legislators knowingly to roll the dice with an industry that study after study has shown brings with it an enormous human "cost of doing business," a cost paid for by their spouses, dependents, families, employers and communities?
Sometimes the lure of big casino jackpots can blind individuals to the reality that the house always wins and that gamblers therefore lose. But the same lure can blind politicians into making similar miscalculations. Those who gamble recreationally know this and wisely go to a casino with a limit they're prepared to lose. They grasp that the odds that they will win more than they lose long-term are very slim. What goes for individuals goes also for communities. By state leaders' licensing casino gambling, the citizens of our commonwealth will lose more than we gain. If we think otherwise, we haven't learned the wisdom of the average recreational gambler.
Anchor readers should contact Governor Patrick and their state senators and representatives to tell them they do not want them risking the future of the commonwealth in this desperate, economically unwise and socially reckless gamble.
Father Roger J. Landry is pastor of St. Anthony of Padua in New Bedford, MA and Executive Editor of The Anchor, the weekly newspaper of the Diocese of Fall River.
