Subscribe free to our daily email newsletterContributor Opinion By Carl Henn: Slot Costs Outweigh Benefits
Oct 24, 2008 7:00 - 8 Comments
Posted by: Brad Rourke
Department: Contributor Opinion,Opinion,Politics
Tags: by Carl Henn, state government
Department: Contributor Opinion,Opinion,Politics
Tags: by Carl Henn, state government
>The following contributor opinion is by Carl Henn:
Choosing our president won’t be our only task when we go to the polls on November 4. We also must decide if Maryland should bring slots back. Maryland had more slots than Nevada until 40 years ago, then banned them based on the observation that they left a trail of wrecked lives in their wake and left gambling interests in control of many counties. People would spend their kid’s lunch money on slots and some turned to crime to feed the machines as they become addicted to the one-armed bandits.
The slots plan for Maryland is supposed to raise $660 million for schools. This sounds like a lot, and indeed it is. But that is the gross increase in funds, not net. Money spent on slots isn’t spent at restaurants or clothing, so we’ll be short on other tax revenues. We will need to pay more for police and social services to deal with the harm that gambling addiction causes. Studies show that over time the cost of gambling exceeds its revenues. Further, $660 million is now conceded to be an overestimate. It’s now $500 million at best.
I am troubled by the ‘something for nothing’ attitude that pervades slots. We won’t need to make tough decisions because slots will save us. Likewise on a personal level slots undermine sound decision making. It’s hard to save money. It’s harder still when you think each quarter you plug in a machine may solve your financial problems. Worse, when you do get a payout, folks are likely to think of it as found money. Found money is likely to be spent frivolously rather than saved. Slots undercut sound decision making both for governments and individuals.
A focus on energy and transportation brings other insights to the slots issue. We are now at or very near the peak of global oil production. The current downturn in the price of oil is temporary. High prices will return shortly and go higher still than we have recently seen.
This undercuts the argument that we need slots because the money will otherwise leave the state. As the price of oil rises, we will have less discretionary income to gamble away and driving to West Virginia or Delaware will recede as an option for most Maryland residents.
As the price of oil went up, it took asphalt, steel and concrete with it, causing a $100 million over run in the first part of the first ICC construction contract. Governor O’Malley then cut all of the construction funds for the Purple Line and Corridor Cities Transitway in order to keep the ICC on schedule.
The over run they have admitted to so far is just the beginning. The ICC will continue to over run and more money will be needed to keep the ICC going. That’s where slots come in. O’Malley has already said that slots will help us to avoid budget cuts. So here is the plan - Pass slots and provide the proceeds as promised to the gaming sites, horse racing industry and education. Then reduce state support to education and use that money to fund the ICC.
Most of the people supporting slots have said that we need it for the additional money it will raise. But we should be honest about what we are raising the money for and that there are better alternatives. It isn’t too late to cancel the ICC. O’Malley could cancel it tomorrow with one phone call. This would go a long way toward solving our temporary funding problem. In the long run, the costs of slots exceed its benefits.
Rockville Central runs occasional, edited opinion pieces by contributors as well as other guest columns. Their views are not necessarily those of Rockville Central. We encourage you to join the growing list of contributors! To submit your piece for consideration, contact us.
(Image from Baltimore City Paper)
Great post. Thoughtful, well-reasoned and compelling.
I like slot machines - and on occasions some have returned the sentiment. But what I really can’t stomach is how sleazy the State is selling them on the ballot with the language that their purpose is to fund schools. If you haven’t seen it, you will when you vote. But don’t believe it. Slots opponents went as far as they could in the courts to have the language state the facts, but they were rebuffed. The revenue would go to the horseracing industry, casino operators, and the State treasury. If I’m not mistaken, the share to the state (less than half)won’t be necessarily dedicated to fund schools. It is just another example of the people in charge ‘spinning’ things to suit their desires. Citizens deserve better from their government, but as we see all across the board, we ‘aint getting it. ‘Box’ those numbers, baby!
There are a lot of reasons to oppose slots in MD and I don’t see myself ever playing them. However, many MD citizens do play slots and a lot of money leaves our state for WV, DE and NJ. Keeping some of that money at home has it’s benefits. Besides, if we are nearing Peak Oil, driving to MD slots parlors will save gas, especially when traveling the ICC at night.
The argument that slot machines in Maryland will keep the money that Marylanders spend playing slots in Maryland is bogus. >
First, note that no new revenue is created. The revenue is simply shifted from neighboring states to Maryland. This begs the question how will this revenue be replaced in Delaware and Pennsylvania and West Virginia. The quick answer might be: those states will move to offer more attractive gambling opportunities to hold on to their Maryland customers. And then how will Maryland react? Presumably: by expanding gambling in Maryland. And all this just to shift money around; again, no new revenue is being created!
Second, even if Maryland manages to hold on to the Maryland gambling money, this is estimated at most only $400 million. The current Maryland slots plan relies on gross revenue of about $1.2 billion; remember, in order for the schools to get theirs, the gambling industry has to take its cut first, and then there are a number of other talked about appropriations ranging from saving the horse racing industry to fighting some of the ills that gambling is projected to create. Just contemplate this last part for a minute – we propose to create an industry in Maryland that has to budget funds to fight the ills that its appearance in Maryland creates! But I digress. In terms of revenue numbers in addition to the $400 million that may be retained in Maryland from current Maryland gamblers, some 800,000 Marylanders who presently do not gamble will have to start gambling and lose on average $1,000 per person per year in perpetuity.
Slots gambling is a most regressive tax, praying on those who can least afford it. It will not solve the Maryland budget problem, it will exacerbate it. Please vote “NO” on Question 2.
Piotr
Let’s see… slots will not generate the amount of money that was predicted and the money will be used for other public service projects, not just education, so we should vote against the proposal that will put money into the state treasury-regardless of the amount.>
Then, Piotr says, “that no new revenue is created. The revenue is simply shifted from neighboring states to Maryland.” Sure… as a Marylander, I would rather the revenue being created in Maryland for Maryland in a manner that is not being taken from my pocket in a tax or a fee.
Piotr also says that, “Slots gambling is a most regressive tax, praying on those who can least afford it.” Can we treat adults like adults and stop trying to tell us what we can or cannot do? You are not my keeper and I am not the keeper of anyone else.
Besides, Maryland supports gambling in other forms. They support gambling at the tracks itself. And look at all of the options for the state Lottery. Even a local convenience store created an area for people to watch the Keno and simulated horse race while they sit and bet on the computer generated outcome.
To be against slots and for the Lottery is hypocritical. Either you are in the gambling business or you are out. There is no half way, just like you cannot be a little pregnant.
No, slots “will not solve the Maryland budget problem”" and there is no proof that “it will exacerbate it.” But regardless of the costs, it will be a net positive income for the state, something that is needed to prevent our tax-and-spend legislature from taking more money out of our pockets.
Unless you can figure out a way to raise $400 million, or whatever number you chose, in state revenues without reaching further in my pocket, I highly suggest you for YES on Question 2.
Great post, Scott. We shouldn’t be attempting to legislate responsible conduct. People could take their kids lunch money and spend it on booze, clothes, keno, or any number of assorted things. Banning slots won’t make individuals any more responsible in their actions.
Here Here!! Why not slots….because government doesn’t trust us with our own money. Put slots in the Bethesda and Rockville bars and restaurants and watch how well they do. >
Treat people like adults for a change and see how they respond.
We cannot worry about DE and PA when our kids in Maryland cannot get new textbooks. We cannot worry about DE or PA when we are cutting arts programs in our schools. We cannot worry about DE or PA when our kids are having to pay for sports where others don’t. Come on, we live in MARYLAND not PA or DE.