Column: Will Gambling Heal Our Pain?

Unfortunately, most proponents of gambling and most policy makers approving gambling don't have the faintest idea about the simple formula for gambling success in a community. The simple formula for deciding if gambling is going to be a good thing for a community or a state is not at all original. We have heard it before: Follow the Money! Know where the money comes from and where the money goes. If more money comes into the community and state than leaves because of the casino, then gambling may be a good idea. Sometimes it is. However, if more money leaves than comes in, gambling is a bad idea in almost all cases. In late September, I participated in a public forum in Buffalo to discuss this question in the context of new casinos there and in Niagara Falls, New York. I always like to visit the Midwest and East as I miss seeing real trees in Las Vegas, and green is nice. I pointed out that almost all the trees one sees in Las Vegas are either transplants or artificial. Buffalo has lots of trees, yet sadly this and many other wooded areas of America have suffered economic declines. The economy of Las Vegas has been very strong--indeed, it has been the fastest growing local economy in America. We are coming back from 9-11, we have lots of money--just no trees. Point number one regarding gambling policy is simply this:"money does not grow on trees."

I also like to tell about the story of the man whose life is falling apart. As he is driving to church, he sees a sign that says"Win the Lotto, and Change Your Life." In church he prays that he will win. He hears the voice of God telling him."My Son you have been good, you shall win the lottery." Convinced his problems are over, he is much relieved. But he doesn't win the lottery. The next week, instead of praying to God, he is angry and asks God, why He lied to him."Why have you forsaken me?" he asks. God replies,"Yes My Son, I understand your anger, because I did promise. But My Son, you have to meet me half way. You have to buy a ticket." Point number two regarding gambling policy is simply this: All gambling money is money that comes out of people's pockets. Unless individuals"buy the ticket" there is no gambling phenomenon--no lotteries, no race track gambling, no casinos.

I truly doubt if New York politicians thought out this most simple formula. Instead, the leaders in Albany have approached casinos and machine gambling as if the money falls from the sky. Will casinos be good for New York--for Buffalo and Niagara Falls, the Catskills, the Big Apple City? Will machine gambling be good for the tracks. Maybe yes, maybe no. The leaders have to recognize that most of the players are going to be local New York residents. Is this bad? Probably. However, if the New York casinos can get New York players to stop trips to the Niagara Falls, Canada, casino, to Foxwoods, in Connecticut, or to Atlantic City, the casinos may be a good thing. Over 80% of the players at the Niagara Falls casino are from New York State. If they play in Buffalo instead of Canada, this will be the same as attracting new tourists to the casinos. That has to be the goal of the casinos. There will be some marginal play from persons in Ohio, and Pennsylvania, but not much. It is unlikely that the machines at the tracks will keep players away from casinos further away. Instead they will probably just generate new gamblers. Buffalo can be a regional convention center, but most of the gambling there will be by locals. The problem will arise if local non-gambling residents of Buffalo or the Catskills start going to casinos if they are located near their homes, when they otherwise would not be gambling. New York cannot expect many persons top forgo trips to Las Vegas (especially in the winter time), in order to gamble at home. I do not mind boosting the qualities of Las Vegas as a complete resort that cannot be duplicated simply by opening casino doors elsewhere.

Perhaps the question of the source of money can be addressed as New York works with the Indian tribes to implement casino plans--especially their marketing plans. No matter who ends up with the money, the casinos will be a failure if the money is money that would otherwise be in the economy of New York and would be spend in other local businesses. Unless there is a net gain of money for the locations around the casino, their economies must suffer--with job losses, and losses of commercial activity.

Ah! But who will end up with the money?"Soooey!" It is pig-feeding time. Forget the whether the drug should be mass distributed, or if the economy will be hurt, the casino operators and the politicians want only to know"what's in it for me?" In the state's frenzy to grab the cash, they have willingly endorsed operations where small groups of people, the tribes and their private partners, will end up with approximately 30% to 40% of all the money lost by the gamblers. Some may argue that they deserve the money because of something Columbus did 500 years ago, but then, New York has a lot of other deserving people also (other minorities and families of New York City firemen, for instance). In this case a thousand Native Americans or so will be given probably half a billion dollars or so--each year. (One casino tribe gives each member $800,000 a year). But hey, the politicians wanted a quick fix, so rather than deliberate a policy for commercial government regulated casinos, the state opted to give up its sovereignty and create artificial Indian reservations with Indian casinos.

Oh, the state's cut? Even though the Indian Gaming Regulatory Act very specifically prohibits state taxes or fees on reservation casinos, the state will charge the tribe a"whatever you wannacallit" of 25% of the revenue from slot machines so they can take their"share" to Albany. Yes! Albany. Not New York City, not Buffalo. Who gets the money because New York City has a financial crises, because Buffalo has a crisis? Albany. Well, September 11 was a tragedy, and we will all have to adjust our lives, so what the hell, let's have some more casinos and shift some money around. By the way, there's another flow of money that comes with casinos. It might not be major in the Buffalo area, because other casinos are already there. But in the Catskills, and in the suburban areas near other newly authorized casinos, and in the areas near race tracks there will without question be a higher incidence of compulsive gambling--and compulsive gamblers drain money from an economy. How much? Another essay would be required to discuss that loss.