Nat’l decline in gaming taxes

This is hardly breaking news to anyone who reads this blog regularly, but gambling revenues are down nationwide. This Economix piece in the New York Times blogs is as good a summary as any:

Two weeks ago, my colleague Ian Urbina had an article about the falloff in gambling across the country, and the lower gambling tax revenues that have resulted. Today, the Rockefeller Institute of Government released its latest numbers on this subject. Researchers found that state and local gambling tax revenues declined by 2.8 percent from fiscal years 2008 to 2009, marking the first time those revenues have fallen in over three decades.Some of the biggest declines were in Oregon down 15.2 percent, Illinois 14.6 percent, Nevada 12.5 percent and Arizona 10.7 percent.For some of these states, a fall in gambling revenues can mean a big hit to the overall bottom line. Nevada, where gambling tax revenues amount to more than $400 per resident over age 21, depends on gambling for 13.6 percent of its “own-source” revenue base. Over all, revenues from gambling taxes make up about 2.3 percent of states’ “own-source” revenues.

via Smaller Jackpots for States – Economix Blog – NYTimes.com.

Click through to read that Rockefeller report–it’s good stuff. I will print out a copy and have it bound for the library.

There’s a paradox here: many states legalize gambling only to bring in revenues in lieu of raising taxes. When the economy falters, they need more money, so they allow more gambling. The problem is, when the economy falters, people gamble less.

This is why my position on gambling legalization is that it shouldn’t be done primarily for purposes of “revenue enhancement.” Rather, states should legalize gambling because they believe that their adult citizens should be allowed to spend their money on it, if they choose. There shouldn’t be monopolies or a limited number of licenses–just set the rules that operators have to follow and police them fairly. If gambling really is “a business like any other,” why not treat it that way?

Otherwise, you fall into the trap of asking the mere mortals who run casinos to do the work of angels–rebuilding the cities, saving the schools, protecting the planet.

On the other side of the coin, if the majority of citizens think that gambling isn’t just another business, that it is something that should be criminalized, they shouldn’t permit gambling on the grounds that it is “for a good cause.” Otherwise, you fall into the ethical trap of believing that the ends justify the means–perhaps the quintessential slippery slope.

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