Con by Larry L.
Pa~e.
Executive Director. Christian Civic Foundation or Arkansas
There are several contexts in which one can examine the issue of gambling. Certainly, gambling as it relates to personal morality is one of the more significant contexts. For many people Ihal can
be the overriding factor. However. for purposes here I will
address legalized gambling outside of the moral considerations. even though those are quile significant to me personally. This Iremment of gambling will be within the confines of the economic implications of casino and lottery gambling. I can find no better premise upon which to build lhe economic case against gambling than the definitive stalcmCI1l by Paul Samuelson. the Nobel Prize-winning economist. He said. "There ... is a substantial economic case 10 be made against gambling ... it involves simply steri Ie transfers of money or goods between individuals. creating no new money or goods.... gambling subtracts from the national income:' To conduct a study of Ihe effects of gambling without looking at the costs to Ihe economy and society is simple-minded at best and deceptive at worst. Yel. that is precisely what the gambling induslry and its apologisls do. They finance study after study which invariably presel1l the rosy. but scandalously inaccurate. scenario for (he economic panacea they tout - casinos. lottery gambling or a combination of those. Robert Goodman. a Lemelson Professor of EnvironmeJ1lal Design and Planning at Hampshire College and a fonner columnist for Ihe BOSIOII Globe has done the most objective. serious and scholarly work in this issue over the course of Ihe last four years. As a resuh of his extensive research. he has found the following: "In the course of all Ihis work. I was consistently struck by how much mis· leading information is rOluinely used by decision makers and people in the media to estimate the economic benerits IhaL new gambling enterprises will bring. The 28
The Arkan . . as Lawyer
Spring 1996
research to support these claims was almost always underwrillen by lhe gambling industry itself, carried out by paid consultants. and trumpeted by legislators who were already commilled to the pro· jecls. The result is that critical public pol icy decisions have been made on the basis of complelely biased projections. (Roben Goodman. The Luck Business:' Manin Kessler Books. New York. 1995.
p. ix.) In addition. he found that in the fourteen such studies he analYl..cd. claims of economic benefils were exaggerated. while costs were undersl::ued. Most of the studies could nor be considered objeclive descriptions of economic bene· filS and COSls. (Robert Goodman. Legaliz.ed Gambling as a Strmegy Jor Economic Developmell1. Center for Economic Development. University of Massachusetls at Amhers!. 199-1. p.16.) In light of this. it is imperative that Arkansans receive objective. reliable and balanced information about gambling before they wrile into their state constitution something as serious and significanl a~ tht: It:galiLi.1lion of casino and 101lery gambling. This ankle is an example of the kind of objective data Ihal is needed. The case - the objective caseagainst gambling is really quite damaging to the out of state gambling interests who arc seeking to expand their opera· tions in Arkansas and elsewhere. What follows is a brief summary of the case against legalized gambling as viewed through the economic prism. The New York Times made the following observations: "But even as the $30 billion-a-year gambling juggernaut gains momentum. economists and regional planners are predicting that it will chew up more income than it creates.... Compulsive gambling. bred by easy access. reduces labor produclivity. and has been linked to incrcases in white collar crime embezzlement. fraud and the like. Lnlc· nighl gambling adds to Ihe cos I of polic-
ing traffic. not to menlion the toll from drunk driving and other alcohol-related violence.... these eXlernalities equal roughly half the revenues of casino gam· bling - and these costs. ultimalely borne by Government, are far more than the direct and indirect laxes on the industry:· (peler Passel!. ''The False Promise of Development by Casino:· The Nell' York Times. June 12. 199-1.) Research highlighted in that article also found thm the amount of taxes collected by a state on gross casino receipts per person were fony dollars. Thai is contrasted with Ihe average cost per per· son of I\VO hundred dollars. These COSIS "include regulatory oversight legal services linked wilh criminal aClivity. and losl job productivity associ.lled with addicted gamblers:' (Passell. The New York Times .) Professor John Kindt of the University of Illinois concludes that for every dollar of gambling revenue received by the state. taxpayers must put up a minimum of three dollars to cover expenses created by gambling. He found these costs include infrastructure expenditures. regulatory costs. expenses related to the criminal justice system and large social-welfare costs. (John Kindt. Slalemenl before a hearing of Ihe U.S. House of Representatives Committee on Small Business. Seplcmber 21. 1994.) Conneclicut conducted a study of its 1991 gambling industry. Its findings were nothing shOl'l of shocking. The stale generated 362 million. bUI al a whopping cost of $554 million. (Earl Grinols. ··Bluff or Winning Hand? Riverboat Gambling and Regional "Employment and I1cmployl1'lent:' Illinois Business Redel\'. niversity of Illinois at Urbana-Champaign. Spring 199-1. Volume 51. limber 1. p. 8.) Maryland. a state that docs not have casino gambling. but does permit IOllery. horse racing. slot machines and bingo. did" two-year sludy of its gambling operations. The Slate found that gam-