Good article about the increased popularity of “sin” in this budget cycle in the Wall Street Journal:
Nationwide, the public-funding crisis has led many state and local leaders to similarly reverse course. Hampered by withering funds for law enforcement, health care and other public services, a growing number of officials are condoning activities and businesses they'd be apt to restrict in better economic times.
For fiscal 2011, 38 states project combined budget shortfalls of $89 billion, according to the National Conference of State Legislatures, a bipartisan policy research group. Thirty-one states expect budget gaps totaling $73.5 billion in 2012. As a result, says Todd Haggerty, an analyst at the group, lawmakers are "trying anything and everything in order to bring their budgets into balance."Oakland, Calif., began taxing sales of medical marijuana last year. Now at least a half- dozen states are weighing measures to allow some legal pot sales. Others have loosened decades-long restrictions on Sunday alcohol sales. And about a dozen, like Ohio, have discussed or passed plans to ease restrictions on gambling.
Good article. I’m not opposed to the legalization of gambling, but I think that doing it for strictly budgetary reasons is a bad idea. Here’s why: with 38 states facing a combined budget gap of $89 billion, any additional tax revenues gambling brings in will be proverbial drops in the bucket. Americans spent a total of about $90 billion on gambling in a year. So to solve the budget crises by expanding gambling, you’d have to double the national expenditure on gambling, with a 100% tax on it. This is impossible.
Let’s look at a more feasible scenario: a 10 percent increase in gambling, which is by no means certain, since national gambling revenues have been on the decline. But lets say that somehow, with expanded gambling, Americans gamble $9 billion more next year. If you tax that at 33% (which is pretty high), you get total tax revenues of $3 billion. Which is nowhere near covering an $89 billion shortfall.
And if you click through and look at that map, you’ll notice that many states with robust gambling economies are in the red.
I would argue that the only reason to legalize gambling is that you think people should have the right to decide for themselves if they want to do it. Idealistic, maybe, but it’s really the only rationale that’s sustainable over time…in a free society, at least.