The Neighborhood Suckers’ Paradise

Last month I found myself living fifteen minutes from a “Vegas-style” casino,1 many years after moving out of the real Las Vegas.

I started my teaching career in Sin City and lived just a few miles west of the infamous Strip for nine years. Even so, our visits to the casinos were infrequent, mostly going for the cheap food and an occasional show when my wife was able to score free tickets. Our gambling expenses were very limited: a couple of rolls of quarters in an evening when visitors came to town, usually slurped up by video poker machines.

At the time, Las Vegas and Atlantic City were the only two places in the US where you could legally experience high stakes gaming. Lotteries, with relatively low payouts in the beginning, were still only available in a few states. So, for most Americans, playing the slot machines, roulette, and craps was a unique experience, a vacation destination instead of the next exit on the beltway. Today, at least one casino is operating in 40 states, and a variety of million dollar lottery games are marketed in 44 of them.

Although research shows the number of gamblers in the US has “fluctuated between 24 percent and 30 percent of the population” for the past 20 years, many state and local officials continue to look for new ways to expand gaming in their jurisdictions. And they loudly promote the supposed benefits of casinos and lotteries: more tourist spending, increased tax revenue, prestige. Not to mention all the fun we’ll have. What they neglect to mention a huge negative side to the equation: for many people, gambling is additive.

The preferred mode of gambling these days is electronic gaming machines, of which there are now almost 1 million nationwide, offering variations on slots and video poker. Their prevalence has accelerated addiction and reaped huge profits for casino operators. A significant portion of casino revenue now comes from a small percentage of customers, most of them likely addicts, playing machines that are designed explicitly to lull them into a trancelike state that the industry refers to as “continuous gaming productivity.”

Problem gamblers are worth a lot of money to casinos. According to some research, 20 percent of regular gamblers are problem or pathological gamblers. Moreover, when they gamble, they spend—which is to say, lose—more than other players. At least nine independent studies demonstrate that problem gamblers generate anywhere from 30 to 60 percent of total gambling revenues.

Americans bet more than $37 billion every year in casinos, an amount greater than that spent on sporting events, movies, and music combined, almost all of which becomes income for the house. Add to that the the even larger numbers of people who spent $70 billion or so on far more accessible lottery tickets and you have a large population who are either extremely entertained by all that gaming. Or throwing away lots of money they can’t afford to lose. Many, many studies indicate the latter is more the case.

However, the greatest fraud in governments supporting the expansion of gambling is their claims that the tax revenues will benefit social needs like public health care and education. In most states, the new income from casinos and lotteries are legally allocated to education and similar needs. But that doesn’t mean their budgets have more money to work with.

Far too often, legislatures reduce the amount they appropriate from regular tax revenues. Why spend our money when gaming will more than make up the difference? Until that income declines, as it inevitably will. One thing I learned living in Las Vegas is that the market for people willing to throw away their money is cyclical. Just in the decade I was there, the economy, based almost entirely on gaming, was up and down like a roller coaster. Often in the same year. The same cycles impact income from all gaming systems.

I have no doubt that the casino up the road will be a big success in the short term. It’s new, it’s shiny, it’s unique in the area. Many people will fill it’s halls and spend a lot of money. But I’m betting (only with existential capital) the highs this attraction will have in it’s first couple of years, will be matched by pretty deep lows lows in other years. And Maryland schools, mental health programs, libraries, and other essential public institutions will suffer as a result.

The bottom line in all this is that governments helping to sucker people out of their money, especially from those who instead need to be investing in their future, is not a good model for society.

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