Lies vs. Facts
Predatory gambling represents one of the biggest public policy failures of the last fifty years. It survives in large part because its sponsors invest heavily in a never-ending PR campaign that promotes a willfully false narrative to the public about its “success.” These are some of the biggest lies:
Lie: “Casinos and State Lotteries Will Improve Government Budgets”
There is overwhelming, irrefutable evidence proving that government’s gambling program has failed as a long-term revenue source because it is anti-economic growth, unsustainable and inadequate. States that use gambling revenues as a “quick fix” to avoid politically difficult structural tax reforms in the short run have nearly always been forced to confront the same difficult tax policy decisions in the future. States with lotteries and casinos have not lowered their taxes and according to the recent national report by The Rockefeller Institute, it has made their budget problems even worse. California’s story is typical. Despite promising it would fund public education, the California Lottery provides only 1.3% of the state’s entire education budget. Learn more in our Taxation By Exploitation and Soaking the Taxpayers sections.
Lie: “Commercial Gambling Creates Jobs”
No great nation or state has ever built prosperity on the foundations of personal debt, addiction, and the steady expansion of businesses that milk existing wealth instead of producing new wealth. Relying on gambling as an economic development strategy exemplifies the attitudes and practices– short-term is more important than sustainable, wealth can come from ever-growing debt, something can come from nothing –that led us to where we are now.
The infamous subprime mortgage lender Countrywide Mortgage employed a lot of people and made a lot of money but they did it by selling bad loans to people who could not afford them. It was phony prosperity. No one believes their kind of business practices are the right direction for any state. Casinos are the ultimate example of phony prosperity.
The appalling truth is casinos make far more gambling addicts than jobs. Illinois state government’s own data shows that many more citizens have been hurt by the casinos than there are citizens who work there: according to the Illinois Gambling Board in 2012, there are almost 20% more Illinois citizens on the self-exclusion list than jobs at the state’s casinos (as of June 4, 2012: the total enrollment of citizens in the state’s Self-Exclusion Program was 9,171. The total number of full and part-time casino jobs was 7789.)
Lie: “People Will Gamble Anyway and They’re Already Doing It Out-of-State”
Many public officials rationalize promoting casinos and state lotteries by saying people will gamble anyway and they’re already traveling to a neighboring state to do it. Yet state lotteries and casino operators openly discuss in the media and in their own marketing research that they are aggressively working to lure new gamblers and create “new markets.”
During the Pennsylvania Gaming Congress & Mid-Atlantic Racing Forum in early 2011, state gambling operators confessed that their most lucrative players were local citizens losing money at the casino five times a week. Prior to sponsoring their own state casinos, there was virtually no one in eastern Pennsylvania traveling 1 1/2 hours to Atlantic City, NJ five times a week.
The “going-out-of-state” message is a deliberate public relations tactic to avoid intense scrutiny about how government’s experiment has failed as well as the predatory and deceitful business practices used by gambling operators.
The evidence is clear that when less government-sponsored gambling is available, citizens lose a lot less money and gambling problems are far less. One of the best examples of this reality is when South Dakota outlawed video slot machines for 100 days, the number of gambling addicts treated each month dropped by 93.5%.
The Indian Gaming Regulatory Act represents one of the biggest failures of U.S. policy in the last fifty years. Passed by Congress in 1988 under the guise of “economic development” for the country’s impoverished Native American tribes, IGRA has resulted in the transfer of tens of billions of dollars to casino operators while many Native Americans still remain in serious poverty. It also has been the driving force behind the massive expansion of predatory gambling that has overwhelmed the U.S. over the last twenty years.
Casinos are the most predatory business in the country and their business model is based on addiction and pushing people into debt – a truth that remains unchanged regardless whether they are Native American casinos or commercial casinos.
Lie: “Slot Machines Don’t Addict People”
Electronic gambling machines like slots and video poker represent the purest form of predatory gambling and, not surprisingly, are the most profitable. According to the research findings of Natasha Schull, associate professor in MIT’s Program in Science, Technology, and Society, the machines are designed to get every user “to play to extinction’’ — until all their money is gone — by using technology described as a “high-tech version of loaded dice.” Schull writes:
“… its (the gambling business) efforts to make slot machines so effective at extracting money from people yields a product that, for all intents and purposes, approaches every player as a potential addict — in other words, someone who won’t stop playing until his or her means are depleted.”
Dr. Bob Breen, the Director of the Gambling Treatment Program at Rhode Island Hospital, has been even more direct in his public comments about slot machines: “Given the right circumstances, almost anyone can get hooked on slots.”
It is time we stopped pointing fingers at the people using electronic gambling machines as the “problem” and instead, focus our attention on problem machines, problem environments and problem business practices.
Lie: “Predatory Gambling is About Personal Freedom”
Predatory gambling operators and some public officials peddle the myth that casinos and lotteries represent “personal freedom,” attempting to elude charges of exploitation by pleading it is a “voluntary” act.” Government, in this case, is not merely permitting private, consensual behavior. It is granting monopolies and awarding regulatory advantages to favored firms. States sometimes conduct casino border wars, positioning new facilities to poach revenue from their neighbors. This has little to do with limited government. It is the active, predatory state.
The predatory gambling business model is dependent on addicted or heavily-indebted citizens and it only works if our government, in its role as promoter and regulator, takes away the freedom of millions of Americans. By definition, someone who is an addict or someone who is deep in debt is not free. They have lost their free will and their freedom to choose. In a country where everyone is considered equal, where all blood is royal, how can the state actively promote a government program that renders some of our fellow citizens as expendable? John Stuart Mill, the father of the libertarian vision, famously wrote that each individual has the right to act as he wants so long as these actions do not harm others.
Lie: “Public Opinion Supports Predatory Gambling”
The predatory gambling lobby promotes the illusion that public opinion supports their business by pointing to polls paid for by predatory gambling interests. Yet independent surveys reveal the opposite is true. A 2010 national survey on predatory gambling by PublicMind,
Fairleigh Dickinson University’s research center, found that a majority of those with an opinion on the subject believe casinos hurt local communities. Among those who live within 30 miles of a casino, nearly one out of two people said casinos have a negative impact. And a 2010 poll in USA Today showed that casinos rank at the top of the list next to garbage dumps for most unpopular projects with 73% of the citizens in opposition. (click on the graphic on the left to enlarge)
Lie: “Casinos and Lotteries Are Just Like Any Other Business”
Advocates of the predatory gambling trade say they are no different than other businesses. They describe it the same as “drinking wine, going out to a restaurant or going to the movies.” Yet the owner of the vineyard drinks the wine he makes. The owner of the restaurant eats the food he serves. The movie actress watches the movies she makes. This is the only product or service where most of the people who own it and promote it, including public officials, don’t use it and don’t want to live near it.
Lie: “It’s Like Drinking Alcohol”
Drinking a glass of wine or a can of beer is far different than buying a $20 lottery scratch ticket or playing a slot machine. No sip of a Miller Lite has ever offered the false promise of “life-changing jackpots.” While alcohol can be habit-forming, no one has ever compared the potency of its high or the speed at which it addicts people to that of cocaine – like it has been proven with an intense gambling experience. One out of five Americans don’t think the best way to achieve long-term financial security is to drink Budweiser. Most tellingly of all, the vineyard owner drinks his own wine – most predatory gambling operators don’t gamble.
Lie: “Investing in the Stock Market is No Different Than Predatory Gambling “
While there may be risk associated with buying shares in the traditional stock market, that is where the analogy ends. When an individual buys a stock, he is buying a piece of a company. An applicant for a bank loan can put down $10,000 worth of stock certificates as collateral but try putting $10,000 worth of lottery tickets on the table instead and see if the bank makes the loan. Click this link to watch one of the world’s greatest investors, Warren Buffett, describe why the government program of predatory gambling is the worst kind of public policy.
Lie: “Government-Sponsored Gambling Diminishes Organized Crime”
No jurisdiction has EVER documented a decline in illegal gambling following the introduction of legalized gambling. In fact, illegal gambling tends to increase for a number of reasons. “We loved legalized gambling,” said former Chicago mob casino boss William Jahoda. “It created more customers for us.” Untaxed illegal operators can offer better odds, bigger payoffs and loans that legal operations cannot. Once gamblers start betting legally, they become less averse to gambling in unlicensed establishments. Law enforcement in gambling states see illegal gambling as a state revenue issue rather than a criminal activity, making enforcement less of a priority. Lastly, when commercial interests gained control of the casino business from organized crime, they obtained the ability and the license to abuse and destroy customers to an extent that was not possible when casinos were run by criminals.