SPG Research Center
Casinos and state lotteries are the most predatory business in America and their windfall is coming at your expense.
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New Jersey is chasing losses
“Chasing losses” among gamblers means trying to recover money lost gambling by more gambling in the vain hope that the next round will be different. As states have become addicted to gambling revenue, they too can chase losses by expanding gambling. Many states have tried. Iowa had one race track and decided to jump into riverboat casinos early on. Several states with casinos have sought to increase revenues by adding table games. Missouri and Colorado have increased loss limits. The list goes on.
The most expert “chaser” has to be New Jersey. Due to competition from surrounding states New Jersey has seen casino revenue decline by 40% and four of its twelve casinos close with a fifth teetering on the edge. It jumped in early on state approved internet gambling conducted by its casinos. Nothing much happened. There was no gold rush. So the next thing to try is legal sports books.
Monmouth Park, the north Jersey race track, has built a really nice large sports bar, with lots of big TV screens, that remains mainly empty because running the book is not legal yet. The decision will come from a judge, U. S. District Judge Michael Shipp. The expectations are marvelous! With Manhattan just an hour away, and Philadelphia nearby, promoters suggest that the market will grow to be three times that of Nevada, producing fortunes for bar owners and an avalanche of revenue for the state. There is no lack of interest in sports or betting on them, but is it possible that the reality is going to be less than what the promoters say, as is so often the case? Do you think the judge is feeling any pressure?
And, what will happen when all the other nearby states jump in with their own sport books, as they did with the casinos? This will be another temporary bump in revenues for New Jersey if approved.
Tim Dahlberg, “Bookmakers poised for New Jersey game changer,” Lexington (KY) Herald-Leader, October 10, 2014, p. B7.) The Associated Press carried this as “Vegas ready to place a big bet on New Jersey” on October 9, 2014.
DE casinos to launch online operations
The three casinos in the state of Delaware are about to put in motion the first phase of their online gambling operations, which will be run through Facebook. The first phase will include only free games but within months, these casinos hope to have up and running full-fledged casino games online, running through Facebook. Delaware is now the first state in the nation to have legal casino games online. These two articles, from the USA Today and Delaware Online, describe this development, which will allow problem gamblers to throw their money away from the comfort of their own couch and allow America’s kids to get sucked in through Facebook.
Casinos get strong warning on financial crimes
According to this story from the Las Vegas Review-Journal, “Casinos have long reaped profits from what can politely be described as plausible deniability when it comes to identifying the source of their large cash customers’ income.” Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network (FinCEN), wants to put a stop to that. In a speech at the annual gambling trade show, G2E, Shaky Calvery called for a cultural change inside the casino business to root out and stop financial crimes, such as money laundering. This comes as an ominous warning for casinos, who often benefit from some shady deals.
Slots used to launder money from drug sales
This article from The Topeka Capital-Journal details the arrest of five Kansas residents after they used slot machines in Kansas City, Kansas to launder $200,000 from marijuana sales. According to the article, “The office of U.S. Attorney for Kansas Barry Grissom said Wednesday that investigations showed some members of the group would deposit large sums of money in small denominations into casino slots, cash out without playing and receive a voucher for the money deposited, then cash the voucher at ATM machines throughout the casino, getting their cash back in large denominations.” These residents have been indicted on 12 counts including money laundering and conspiracy to distribute marijuana.
New OH Lottery ad promotes the “fun” of scratch tickets
A recent $4.3 million ad campaign from the Ohio Lottery aims to show players how fun and exciting it is to play scratch tickets, even while making no implication as to whether the people in the commercial won anything. Scratch ticket sales in the US totaled $37.5 billion last year, disproportionately from poorer Americans who are playing these instant scratch tickets as a path to wealth. The fact is, even the Lottery realizes that these games are a poor and almost impossible way to achieve wealth, so these ad campaigns are looking to get players to play just for the instantaneous “buzz” or “high” people can get from these games, which, along with their money, is gone in seconds.
Despite casinos’ poor economic record, Philadelphia pushes forward with second casino
Philadelphia is hoping to buoy the economic prospects of its Center City area with a second casino, despite the fact that the state’s first casino has failed to produce economic growth and despite the fact that time and again, casinos hurt, not help, urban economies. This opinion piece from Next City explains why more casinos won’t make their economic effects any less harmful. Philadelphia’s Center City needs a breath of new life but casinos will not and cannot provide it.
Nova Scotia abandons method to reduce problem gambling on VLTs
This article from the CBC News explains the Nova Scotian government’s recent decision to abandon its “My-Play system” where players, using a card to activate the machine, would be able to set spending and time limits on a VLT (video lottery terminal) and see their spending habits. Gambling interests argued that this system wasn’t working because people would use multiple cards- even despite a 2011 study that found that this system is effective. Gambling critics argue that this is the work of gambling interests upset about their bottom lines being hurt. The My-Play system has already been adopted and has been working quite effectively in places like Norway but now, just two years after the system as made mandatory, the system is gone and Nova Scotian gambling interests can continue to profit more and more from problem gamblers.
In MD, the lower the income, the more likely you are to play the Lottery
This article from the Maryland Reporter details why the lower-income communities in Maryland play the Lottery disproportionately. For example, Park Heights, one of Maryland’s poorest neighborhoods with a median income of $35,000, gave the most money to the Lottery in the entire state- a whopping $34 million. A truck driver from Park Heights told the Reporter that, “We play to make some extra money… I want some extra money. We all do.” Lower-income communities disproportionately believe the path to wealth is the Lottery, not responsible saving and spending. However, with every Lottery ticket, as this article explains, residents only fall deeper and deeper into poverty.