6/1/11
One of the big local stories today is the gambling bills’ being passed out of the Senate and hence being headed to Governor Pat Quinn (no relation) for his signature or veto. Given that Mr. Quinn’s convictions are as ephemeral as a Cubs’ winning streak, his protestations that the gambling bill is “top heavy” mean little; hence, I would bet on the former. So, if all goes as expected, we will have a big new casino in Chicago, two new casinos in the suburbs, casinos in Rockford and Danville, slot machines at the airports and at local race tracks (See my very insightful 3/1/11 post, “HERE THEY COME SPINNING OUT OF THE TURN…” on slot machines at race tracks.), and, apparently, a slot at the trough for just about every special interest group with the ability to whine and write a campaign check, not necessarily simultaneously.
I would feel more strongly about this largest expansion of gambling in the state that gave us Tony Accardo and nurtured young Al Capone if it all didn’t seem so inevitable, but I still have objections to the plan based primarily on the weakness of the arguments in favor of this gargantuan expansion of gambling, er, sorry, gaming.
First, why is gambling so evil and reprehensible if done in by private entrepreneurs (yes, including the aforementioned Messrs. Accardo and Capone who, under today’s legal structure, would be legitimate businessmen rather than bloodthirsty gangsters) but suddenly eupeptic and beneficial if it gets the imprimatur of the government (or, in the case of the upcoming paean to tackiness that soon will be housed in Chicago, ownership by the government) and the politicians get a hefty chunk of the proceeds? Either gambling is a social evil or it is not; that the government has the biggest piece of the action should have no impact on its desirability from a moral/ethical/criminological standpoint.
Second, the argument that gambling will help us get out of the fiscal morass our public servants have spent us into is laughable to the point of asphyxiation. Why? Giving politicians more money to spend does not solve fiscal problems; it causes fiscal problems. If you give a pol a dollar, s/he will spend two. Inevitably, politicians will make spending commitments, on such anodyne projects as “infrastructure,” “investing in human capital,” and, of course, “for our children,” based on hockey stick projections for casino revenues that will fail to materialize. The commitments, given their “urgency,” (the power of the interest groups benefiting from them, really) will not go away. The taxpayers will be stuck covering the shortfall.
But, some might object, our public servants have earmarked the $1.5 billion to be generated from licensing fees for paying down existing debts. But the $500 million in annual taxes, profit splits, etc. to be generated is not similarly earmarked; it can be spent anyway our public servants deem meritorious. And the earmark of the $1.5 billion is itself a feint. Money is a fungible good; remember how the lottery money was supposed to go for education? It did. But the money that would have been spent on education in the absence of the lottery was spent elsewhere when lottery money went to “our children.” The same thing will happen in this instance. Note that, according to this morning’s (Wednesday, June 1, page 14) Chicago Tribune
It’s (the $1.5 billion in upfront licensing fees) money earmarked to help pay some of the state’s overdue bills, and the cash would free up other dollars for social programs. (Emphasis mine)
So money that would have been used to pay bills can now be blown on social engineering programs that somehow benefit those doing the engineering more than those on whom it is performed. Great deal.
If gambling were a fiscal panacea, New Jersey would be the portrait of fiscal health. It isn’t such a financial Valhalla because the pols in Jersey spend all the money generated by the Atlantic City casinos…and then some. For that matter, if gambling is such a fiscal shot in the arm, why is the state of Illinois in such bad financial shape? Gambling has been quite widespread in this state for well over twenty years; when it was introduced, its proponents touted the salubrious effect it would have on the state’s fiscal health. Some might cite Nevada, which, until the housing crisis body-slammed it, was in pretty good fiscal health. But that happy state of affairs was not the result of a gusher of casino revenue. Nevada’s fiscal house was in order, and its taxes relatively low, because Nevada pols, like their brethren in that part of our country, dared not outrage their naturally fiscally conservative constituents. Gambling per se has little impact on fiscal health; rather, it is the propensity of the pols to be parsimonious that affects a state’s (or any level of government’s) finances. Gambling isn’t going to change the spendthrift habits of the Springfield crowd. Notice that, in the same session in which this gambling panacea was concocted, the legislature put off pension reform for another day.
Third, the casinos are supposed to foster “economic development.” Have you driven through downtown Aurora or Joliet lately? How about taking a walk a few blocks inland form the casinos in Atlantic City? How’s Detroit looking lately? Again, it isn’t gambling that has a salubrious effect on economic development; it is many things, including the willingness of the political leadership to foster a business friendly environment, and by that I don’t mean handing out special dispensations to the politically favored from otherwise onerous taxes and regulations. (See my 5/18/11 piece “…AND IF YOU EVER LEAVE ME I WILL LOSE MY MIND…”) Just as gambling isn’t going to suddenly change the typical Illinois pol’s lascivious designs on the fruits of your labor, it isn’t going to change his or her outright contempt for those who hire and those who work. Note that in the same session that gave us this gambling expansion, we got a workers’ compensation “reform” package that makes a fig leaf look like a burka.
If legalizing casino gambling could eliminate, or even mitigate, its societal side effects and if pairing those casinos with slot machines in airports and race tracks would solve, or even help, our fiscal problems and reinvigorate our economy, I, like just about anyone, would be in favor of the bill that is awaiting the signature of Governor Quinn (no relation). But further expansion of legalized gambling has been neither the fiscal nor economic panacea its proponents would have us believe, and, even when legal, gambling still has all the nasty societal downsides that the pols found so reprehensible when they were not, at least officially, getting a piece of the action. So who benefits, other than the pols and those who write them checks, rather than, as in the old days, hand them envelopes stuffed with cash?
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