Stop Predatory Gambling

Local Iowa citizen pulls back the curtain on the state’s “good corporate citizens”

by Les

Antonia Russo of Iowa wrote an excellent guest commentary in the Iowa City Press-Citizen that underscores how casinos in Iowa have failed to deliver the mythical economic and public revenue boost they promised twenty years ago.  Nice work, Antonia. Read it below:

Casinos now ‘too big to fail’

Opponents of expanded gambling warned of the day when casinos became institutionalized in Iowa, their interests intertwined with the public good, becoming one and the same.

In an astonishing statement, the Press-Citizen Editorial Board indicates that day has arrived: “With cities, counties and the state having grown dependent on the success of existing casinos, it is in everyone’s interest that existing casinos … do well enough to continue to play the role of good corporate citizens” (“Our View,” Feb. 23).

We have painted ourselves into a corner with a predatory industry. We fail to comprehend the power we’ve naively granted to the casinos or their financial penetration into our institutions.

In a rural county like Washington, the casino is the largest employer, financial and charitable contributor, taxpayer and political influence. Dan Kehl, whose company operates Riverside Casino, stated that Gov. Terry Branstad’s proposed casino tax increase would decimate the facility, causing hundreds of layoffs, and would require the closing of the golf course and restaurants. Kehl said the increase would force their Lyon County casino to default on its loans and it would “likely be sold at a fire-sale price.”

Surely this is not a veiled threat that borders on extortion. But Washington and Lyon counties are tossed around like bean bags in the discussion. When these “good corporate citizens” want a concession or expansion, their stranglehold on our communities becomes obvious.

Remember that nine out of 17 Iowa casinos have out-of-state owners. That loud whooshing sound we hear is not wind turbines but the millions of dollars annually sucked out of state by these corporations.

Gambling does not produce new money. It merely redirects legitimate commerce to the casinos. Riverside’s patrons and their disposable income come from a 40- to 50-mile radius. The closer to the casino, the more economic benefit, but some miles out, the impact dwindles. The casino then becomes a black hole taking money from local economies.

Casinos make their profits on gambling, not concerts, golf courses or restaurants. The best kept secret in the industry is the percentage of revenue that comes from problem and addicted gamblers. Some studies put the figure as high as 52 percent. We have no accurate figures of the collateral damage-costs to our criminal justice, social service, or health care systems-no records of embezzlements, credit problems, insurance losses, or bankruptcies. No records of personal tragedies like child neglect, family violence, divorce, loss of savings and pensions or suicides. Without statistics we can deny problems or make only brief anecdotal reference to them.

In studies done by John Kindt for the University of Illinois, calculations of lost sales tax and business revenue and social costs, measured against a casino’s taxes and grants, show a casino costs the affected area $3 for every $1 it generates. Kindt suggests we are actually subsidizing the casinos with tax dollars. Nationally the taxes on “racinos” (combined race tracks and casinos) average 50 percent-Canada has a 90 percent tax on their operations.

The gambling industry in Iowa received an exemption from the smoking ban, claiming potential loss of 20 percent of revenues if forced to comply. Gambling has co-addictions, including alcohol and smoking. To force a gambler to leave the casino for a cigarette would break the intensity of the action and allow for rational thought. With access to cigarettes, alcohol and credit machines, the controlled environment of the casino is designed to maximize gambling. For the casinos, the smoking ban was a problem for public relations and, the bottom line, not a health concern for their employees and patrons.

We don’t know the range of salaries and benefits provided to Riverside’s employees, but although the casino is the second most lucrative in the state, it has the lowest per capita win at only $42. Even the Wild Rose Casino in Emmetsberg has a figure of $52 win per capita last year, according to the Iowa Racing and Gaming Commission.

Now the industry is exploring a sweeping expansion with legislative proposals to authorize online poker. We need to take a closer look at these “good corporate citizens” and re-establish control over their influence in our state.