Soaking the Taxpayers
Government Revenues from Predatory GamblingA 2009 report by the Rockefeller Institute of Government concluded that predatory gambling worsens long term budgetary problems for states. Read the report below to see why states that institute predatory gambling as a means to stabilize the budget are deeply disappointed time and again:
"Income from casinos and lotteries does not tend to grow over time as rapidly as general tax revenue. Expenditures on education and other programs will generally grow more rapidly than gambling revenue over time. Thus, new gambling operations that are intended to pay for normal increases in general state spending add to, rather than ease, long-term budget imbalances."2009-09-21-No_More_Jackpot Rockefeller Report
Predatory Gambling Means Higher Taxes For All and Less Services for AllThe 2010 New Hampshire Gambling Commission report showed one casino would raise $219 million in state revenue but the total social cost would be $287.7 million: a net loss of $68.7 million. The casino takes its profits off the top so who do you think pays the bill to cover the social costs? You and your family...through higher taxes and cuts in existing programs like schools and road construction. NH Gambling Report 2010
California Taxpayers Pay Even If They Don’t PlayPredatory gambling operators are fond of framing their scheme as a “voluntary tax.” Yet according to the California Attorney General’s 2006 study titled “Gambling in the Golden State”, problem and pathological gamblers cost California $1 billion per year, more than half what the state received in gambling revenues. Read the report below. 2006 Gambling in the Golden State
Lottery Revenue Comes Largely From People Already Receiving Government SupportStudies of lottery spending, including this study from the Federal Reserve Bank of St. Louis in 2008, show lottery revenue comes largely from Social Security, unemployment and other forms of government support. Government, in other words, is paying government — with an enormous amount of money being siphoned off by gambling interests. It also reflects a key reason why predatory gambling worsens state budget deficits over time and taxpayers end up footing the bill. St Louis Fed Reserve Lottery Study 2008
Casinos Failed to Bring Prosperity to ConnecticutDespite developing two of the largest casinos on the planet in the 1990s, the state of Connecticut is in dire fiscal shape. The New York Times piece below states that "Connecticut’s finances are among the most troubled in the nation: it is last or close to last in financing pension obligations and retaining reserves for emergencies, and near the top in per-capita debt...Moody’s lowered its outlook for the state’s bond rating to negative from stable." This is just another example that casinos fail to provide the revenue promised by lobbyists of the predatory gambling trade. And what about jobs? The state has "an abysmal level of job creation and economic growth that has left the state with fewer workers employed now than in 1987." Beneath Connecticut’s Image of Affluence, Deep Fiscal Pain
Philadelphia Federal Reserve Bank: Costs of Predatory Gambling Outweigh Any BenefitsThis report from the Federal Reserve Bank of Philadelphia concludes that the local benefits of casinos would be outweighed by costs such as increases in pathological gambling, crime and personal bankruptcy. Economic and Social Impact of Introducing Casino Gambling
The Relationship Between State Lotteries and Government Assistance PaymentsThis paper examines United States lottery revenues and finds an increase in lottery activity during weeks in which transfer payments (i.e. Aid to Families with Dependent Children, Social Security, disability, etc.) are distributed. Revenues from state lotteries are also shown to increase during the week transfer payments are distributed. The timing of the increase in lottery purchases suggests a portion of the transfer payments is used to purchase lottery tickets. Running the Numbers on Lotteries and the Poor - An Empirical Analysis of Transfer Payment Distribution and Subsequent Lottery Sales
Lotteries Generate More Revenue Than Corporate Income Taxes in Some StatesU.S. Lotteries and the State Taxman
New Government Study Reveals the Massive Cost of Problem GamblingWhile government-sponsored gambling is often trumpeted as a new source of revenue, a 2013 study shows that is not the case. The study shows the staggering cost of problem gambling in Australia. It proves that the social and economic cost of problem gambling could total up to $2.8 billion per year. This includes $1.4 billion annually that would fall on the shoulders of the families of problem gamblers. 2013 Cost of problem gambling could be as high as $2.8b- report
Economists Find That Gambling Revenue Comes At the Expense of Sales Tax RevenueEconomists John Jackson and Douglas Walker published an article in Contemporary Economic Policy in early 2011 that showed that the increased revenue that comes from gambling often comes at the expense of sales tax revenue. The two also came to the conclusion that, in general, casinos and greyhound racing tend to decrease state revenues overall.
Public Agency Acts as Casino Debt Collector in NevadaThe taxpayers of Nevada are funding efforts to collect debts for the state’s casino industry. According to the Las Vegas Sun, this is the only state in the country where this occurs. Casinos make a practice of giving out loans, or “markers,” to problem gamblers and those they know have been gambling for hours on end. Instead of hiring private debt collection firms like all other businesses, the casinos charge the taxpayers of Nevada to do this and put the Clark County Assistant District Attorneys to work on their behalf. This allows the predatory gambling industry to keep making huge profits. Why Does District Attorney Act as Bill Collector for Casinos?
Australian Government Study Shows Predatory Gambling Costing Citizens $4.5 Billion Dollars Per Year, the Bulk of Costs Deriving from Video Slot MachinesAccording to the 2010 Australian Productivity Commission report (their government’s independent research and advisory body) which provides an in-depth analysis of the effects of the predatory gambling business on the nation, predatory gambling now costs Australian society about $4.5 billion dollars per year - the bulk of costs deriving from video slot machines. These costs exceed benefits when “excess” losses by problem gamblers is included. Cost per year per adult translates to $210. $1 U.S. dollar = $1.08 in Australian dollars as of Oct 23, 2009. You can find a longer summary of the report's findings in the Profits from Gambling Addicts section. Australia’s Gambling Industries 2010 Report Vol. 1 Australia's Gambling Industries 2010 Report Vol. 2
Ohio Broken Revenue PromisesCasinos often hand out empty promises during their beginning stages to gain citizen approval, as is the case with the state of Ohio. Ohio was promised new textbooks, increased funding for the arts, and economic development when the casino development campaign was approved by voters in 2009. However, the projected estimates of casino revenues fall far short of reality, making many of Ohio's plans to use the money for education and economic development unrealistic. Ohio has quickly learned that casino revenues are doing far from helping to improve the state. Ohio Broken Revenue Promises
Caesars casinos skips out on local property tax burden in Missouri
Maryland faces millions in costs after paying more for slot devices than expectedWhen Maryland voted to legalize slot machines, officials opted to acquire the games of chance themselves so that the state would be responsible for the integrity of the gambling. This however is causing more problems than expected. Maryland, being one of the few states where slot machines are purchased by the state, is now facing tens of millions of dollars in costs that will cut into proceeds for years to come. Maryland faces millions in costs after paying more for slot devices than expected
Money for lottery tickets could be better spent on educationThis story in The Chicago Reporter chronicles the funding problems that have plagued the city's education system. The article proposes that instead of buying lottery tickets, that give only 30 cents per dollar to the school system, Chicago's children would be better served with contributions directly to the schools. 2012 Better Odds- Money for lottery tickets could be better spent on education
Casinos do not provide budgetary stability they promiseCasinos fail to increase revenue even though casino leaders continue to promise to the contrary, according to an article in the Lexington Herald-Leader in Kentucky. Instead of generating new income to provide for education and other services, experts say casinos provide an unstable and unsuccessful base for revenue and caution against using them to fix budgetary problems. Casinos no cure-all for state budgets, economists say
Mega Failure: Why Lotteries Are A Bad Bet For State BudgetsBelow is a great, concise piece by Think Progress, a political blog of the Center for American Progress, about how lotteries have been a major policy failure because they are highly regressive and are an unsustainable revenue source, ultimately worsening state budget imbalances. 2012 Mega Failure- Why Lotteries Are A Bad Bet For State Budgets
Homeowners see less-than-expected tax relief from casinosHomeowners in Pennsylvania were hopeful, after a law was passed in 2006 that dictated the distribution of fund from casinos, that they would finally see a sizable reduction in their property taxes. It was break they needed, however, it was not one they received. Now, according to this article by the Pocono Record, homeowners are becoming more disappointed with the tax relief, or lack thereof, they are getting from casinos in their community. 2012 Gambling tax relief falls short of expectations for struggling homeowners
NY schools see stagnant aid in face of rising lottery revenueBelow is an article that details the growing gap between lottery profits and aid for education in New York state. While the revenues for the New York lottery have soared in recent years, the percentage that is allotted to the schools of New York has remain unchanged. The article also chronicles the ongoing debate over lotteries in the state of New York and is a great read for anyone looking to see the impacts of lotteries on education. 2013 Lottery revenue soars, but schools fear 'shell game'
Tax break for Atlantic City casinos means more struggles for the cityAccording to this article by NorthJersey.com, Atlantic City may have to take on an additional tax burden after casinos in the city won a large property tax reduction in court. The reduction is due to declining property values of casinos because of the casino industry's overall downward spiral in recent years. The city will now have to cope with the loss of serious tax revenue in addition to its long-term financial struggles. 2013 Atlantic City and its casino industry are still struggling – and now the tax burdens on the casinos are shrinking
Report shows staggering costs of problem gamblingThis report, by The Victorian Competition and Efficiency Commission, estimates the cost of problem gambling to be as high as $2.8 billion in Victoria, Australia. Excess gambling by problem gamblers accounts for up to $1.4 billion of this, with the rest coming from the intangible costs for problem gamblers' mental health and familial stability. This article by The Age summarizes the report's findings. 2013 Cost of problem gambling could be as high as $2.8b- report
NC lottery does not provide promised education fundsThis article by the North Carolina Justice Center explains how the North Carolina lottery is not living up to its promises of education funding. After providing an initial bump in funds for education, the level of education funding has now dropped back down to below pre-lottery levels. The old argument that the lottery will pay for its moral evils by giving money to schools is now defunct, according to the article, because the state spends less on education than it did before the lottery was put in place. Now that the lottery no longer provides money for education, it is no more than "a regressive tax that falls mainly on the poor". NC Lottery: A Failed Experiment
Taxpayers being swindled out of millions by casino licensing feesThis article by The Capital Gazette documents two think tanks' research that explains how casinos have gotten their licensing fees much lower than one might expect, taking hundreds of millions of dollars from the state for which taxpayers have to foot the bill. In Maryland, the licensing fees for the new Prince George casino should total over $500 million. However, Maryland will only receive about $18 million- a fraction of the money it could be receiving. Thus, Maryland taxpayers will have to pitch in the missing hundreds of millions of dollars that the casino got out of paying. 2012 Think Tank- MD taxpayers dealt bad hand for casino fees
Schools in Maryland aren’t seeing the funding promised from casinosIn 2012, faced with a referendum on gambling on which voters would decide the fate of gambling in Maryland, Governor Martin O'Malley promised his constituents that casinos would bring in necessary revenue for education funding. He equated gambling with a win for education. Now, two years later, schools in Maryland are looking for the money they were promised because so far, it hasn't come. Just as with other states, education funding from casinos has fallen far short of what was promised. This article from the Maryland Reporter explains how once again, schools are losing out on much-needed funding. Despite campaign promises, casinos, not schools, are big winners from gambling profits
Evidence shows property tax relief for PA homeowners is a “charade”Ten years after PA gambling proponents predicted casinos would relieve the tax burden, homeowners are underwhelmed. "Proposal written in invisible ink", "tax relief a charade" and "insult to every property owner in the state" were just some of the state reps comments. 2014 Slots cash a mixed bag for PA property owners
Las Vegas tightens its belt, and yours tooAnd you thought that just those playing the daily sports fantasy games, or the lottery’s new Keno games, or the new casinos in Massachusetts, or the casinos at the racetracks were the only ones being hurt. Not so. Las Vegas is also hurting from the ubiquitous competition in nearly every state. Las Vegas, however, is fighting back. Someone has to pay the electric bill for all those fancy lights. Las Vegas was famous for the “comps,’ the complementary meals and hotel rooms, the free drinks and even an occasional airfare for really big spenders. But now Las Vegas is scaling back the comps. Free rooms are less frequent. Free airfares to Vegas are almost unknown. While the cost of drinks is kept low the free drinks are beginning to go the way of the dinosaurs. The ultimate insult that annoys visitors by car the most is parking fees. Twenty-four hour parking is now $10 at many casinos, which while not too high, annoys because it used to be free. Remember the great room rates? Some places were $30 and $40 per night for some really nice rooms that had been fixed up after previous losers had trashed them. Now many hotels with a pool and a weight room are charging “resort” markups of $29 to $32 in addition to the cost of the room for the use of the amenities. A rational person might think this foolish, since the customers might take more time away from the slots and tables to get their monies worth from the “resort.” When you finally get to the gaming floor, you get hosed again. Nobody is advertising the “loosest slots in town” anymore, as the percentage of return has moved from the low nineties to the upper eighties. At the black jack table, black jacks pay out at a 6 to 5 ratio instead of 3 to 2 in the good old days. Aces can no longer be split, and you can’t double down on anything other than a ten or an eleven. And as the evening wears on and you are more drunk the bartenders reduce the amount of booze to the mixer. It is at least harder to get drunk later in the evening. The casinos are merely trying to maintain profitability. Isn’t that the American Way? It is almost enough to make you rethink your next visit to Vegas. The only thing that stays in Vegas these days is your money. Michael Kaplan, “Vegas is trying to cheat you out of even more money,” New York Post, August 11, 2016.