In case you missed it, please take a few minutes to read this article. The Weekly Standard provides great insight about the expansion of gambling. One quote that stands out the most is, “casinos take their money off the dinner tables of people who live down the street.”
House of Cards
Will Massachusetts voters rescue their state from Deval Patrick’s gambling law?
When Massachusetts voters go to the polls in November to pick their next governor, they will also define the legacy of their last one. You might think that legacy had something to do with liberation. When Deval Patrick came to power in 2006, all the talk was of his being the first black this and the first black that. A product of Harvard, the Clinton Justice Department’s civil rights division, the corporate suites of Texaco and Coca-Cola, and the boardrooms of America’s biggest subprime lender, he somehow satisfied a lot of his voters that they were striking a blow for outsiders. Funny. In his first days as governor, Patrick intervened with Citigroup’s Robert Rubin on behalf of his former company Ameriquest. He replaced his predecessor Mitt Romney’s Ford limousine with a Cadillac Escalade. More recently he appointed his chief of staff to John Kerry’s vacant Senate seat. Last week he fired the head of the Massachusetts sex offender registry in part because of her handling of his brother-in-law’s sex-offender status. His only claim to be an outsider is that he had just moved to the commonwealth when he ran in 2006.
One issue alone obsessed Patrick throughout his eight years as Massachusetts governor: giving international gambling corporations a foothold in the state. Question 3 on November’s ballot calls for overturning the “Expanded Gaming Act” Patrick pushed through in 2011. That bill called for three “destination” casinos and one slots parlor. The state would claim a quarter of the take in taxes (half in the case of the slots parlor), producing around $400 million in annual revenues.
Although Massachusetts is overwhelmingly Democratic, it is not as liberal as it looks. Patrick’s legislation pitted certain key constituencies of the Obama-era Democratic party (billionaires, slum mayors, and non-workingmen who claim to speak for the defunct labor movement) against those the Democratic party has traditionally represented. Now, just as construction was about to begin on the MGM casino in Springfield, and just as Steve Wynn was being awarded a casino contract worth billions outside Boston, a grassroots movement among those traditional constituencies is bidding—against all-out opposition from the governor’s allies—to do away with casino gambling altogether.
A generation ago, Nevada and Atlantic City were the only places in the country people could gamble. There are now casinos in 38 states. They hold close to a million slot machines. Americans lose $119 billion a year gambling, which is more than they spend on watching and playing sports. Casinos have spread rapidly since the 1990s. They allow politicians to raise money not through taxation but through tax-farming. Instead of forthrightly asking overburdened citizens for more in taxes, state governments can, in the style of moribund autocracies, protect a monopoly for gambling moguls and prosper from their predation.
State-sponsored gambling is a bit like health care reform—when people first hear the vague outlines of a cost-free reform, they like it. Patrick’s plan for casinos was popular when he initially broached it shortly after his election. Gambling creates jobs, and not just for prostitutes and drug couriers. What is more, Connecticut, which shares a long border with Massachusetts, has two huge Indian casinos. Once neighboring states have gambling facilities that your citizens are using anyway, better to share in the profits along with the public expenses for addiction counseling and suicide hotlines. Or so the reasoning goes.
On closer examination, though, every route to casinos leads to a situation worse than the status quo. Look at Atlantic City. In recent weeks, four of its big casinos—the Atlantic Club, the Showboat, the Revel, and the Trump Plaza—have closed, with the possibility of a fifth closing in November. It was in an elevator at the Revel, which opened only in 2012, that former Baltimore Ravens running back Ray Rice, perhaps exuberant from the night’s “entertainment,” knocked his fiancée out cold last winter. What happened in Atlantic City seems obvious. Its gambling industry is viable as long as it can suck profits out of six states and pay the damages for only one. Recent expansions of gambling in metropolitan New York, eastern Pennsylvania, and Maryland have wrecked New Jersey’s model of legalized gambling. Perhaps the Deval Patrick method—which does not legalize gambling but allows the state to grant local monopolies—will work better fiscally. But it will not bring jobs or improve the local economy. Casinos often wind up costing states money. Three decades after Atlantic City introduced gambling, the city has a 13 percent unemployment rate. Its number of “eating and drinking establishments” has fallen from 242 to 142, according to the nonprofit Council on Casinos. It still lacks a major supermarket.
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