State-sponsored gambling? It's time to fold 'em, governor

Annette Meeks
Duluth News-Tribune
June 5, 2005

House File One was introduced again last week. It would authorize the first"racino" in Minnesota.

Gambling proponents stress the potential economic benefits, including economic development and a "painless" way to enhance our state revenues. The lure of easy money and its perceived benefits has many well-intentioned elected officials lured into this trap of seeking something for nothing.

Before our state gets further into the "luck business," it's time for Minnesotans to consider the facts surrounding the true costs of gambling. The impressive benefits touted by those who support a state-sponsored casino/racino come with a cost -- and what we believe will be a significant cost to every Minnesotan.

We're told that a state-sponsored casino is really "economic development" and will make Minnesota a more impressive tourist destination. But let's be honest: casinos don't attract tourists -- casinos attract gamblers. A 2005 Pennsylvania survey reinforced this fact: nearly 85 percent of the slot machines wagers came from only

8.7 percent of casino visitors.

Illinois also learned this the hard way. Soon after they authorized casino gambling, researchers discovered that nearly 75 percent of the revenues generated at those casinos came from Illinois taxpayers who lived within

35 miles of the casino.

Let's face facts: For gambling to win as a source of revenue for our state, lawmakers are betting that some segment of the population will lose -- and will lose big.

The experience in South Dakota reinforces the sad statistics about who is gambling at state-run casinos. According to the University of South Dakota, "the higher one's income, the more one will tend to see gambling as entertainment or as a way to socialize with other people. Conversely, the lower one's income, the more gambling tends to be seen as a form of investment."

For the poor, who have few alternative ways to invest, gambling is seen less as play and more as a serious chance to transform their lives. Furthermore, evidence tells us that lower-income people who gamble spend more as a percentage of their income than higher income gamblers. Sadly, this makes gambling a voluntary yet highly regressive form of taxation.

Professor Earl L. Grinols of Baylor University is well-known for his scholarly research on gambling. Grinols reports that very little economic development occurs within the vicinity of a casino. Restaurants, hotels, and especially retail businesses can't compete with the 24/7 lure of slot machines.

Grinols also studied the social implications of gambling. His research examined seven FBI index crimes -- murder, aggravated assault, rape, robbery, larceny, burglary, and auto theft. Grinols found that the relationship between casinos and crime posed a significant cost to the communities in which they are located: Every type of crime except murder increased in counties with casinos.

Numerous other studies support Grinols' assertions. Nine years after Atlantic City introduced casinos, overall crime within a 30-mile radius of the city increased over 100 percent.

But the social costs of gambling don't end there. In 2004, Grinols released updated statistics that calculated the total social costs of gambling. Grinols says that gambling costs the American economy $54 billion annually. To put that in context, Grinols says "(T)he costs of problem and pathological gambling are comparable to the value of the lost output of an additional recession in the economy every four years."

Any good poker player knows that the one thing you should never do is chase after your losses with hopes of reversing your luck. What usually happens to the unlucky players who "chase" is that they becomes so obsessed with winning that they start making dumb decisions. They can try to bluff their opponents but ultimately they will learn that they should have folded and left the game.

The story of Minnesota elected officials considering expanding gambling is a story of chasing. It has become more about winning than thoughtful public policy.

Our elected officials are chasing their losses when instead they should be leaving the game.