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Proponents of corporate casinos, racetracks and predatory gambling have spent millions of dollars from out-of-state interests lobbying legislators since Governor Patrick's failed proposal to license three resort casinos was filed.

Special interest groups have targeted the Commonwealth as a market for expanding their profits at the expense of host regions, local aid, small businesses, public safety, environment, taxpayers, individuals and families affected by the negative impacts of this industry.

Wildly inflated job projections and revenues have been disseminated in the media by the corporate gambling industry, the Administration and alleged researchers funded by gambling and construction groups.

The global recession has impacted revenues with casinos and racinos going bankrupt and creating economic instability.

Statements by proponents about wages and revenues going to out-of-state gambling venues have been exaggerated and inconsistent as reported in the media.

An example frequently used by proponents is that the average salary for a casino worker is approximately $45,000.00 with benefits.

Inclusion of executive pay skews these figures and when median wages are calculated the estimate by Spectrum Gaming in Massachusetts would be approximately $25,168 with 25% annual turnover (page 28).

Who will pay the health insurance for low income workers when there is a 25% annual employee turnover rate in the business?

Will this not be an additional burden to the taxpayers to expand already strained subsidized health insurance programs?

When estimates of $700 million dollars per year going to CT casinos from Massachusetts residents are suggested by proponents, they fail to note that only the tax on those projected revenues would be retained by the state as revenue.

How will that amount of revenue close the budget deficit when the net costs of the industry are so high?

What about the costs?

When a lot of people hear about bringing slots or casinos to the Bay State, they think - jobs... revenue... and possibly a boost for the local economy. And when they think about a downside to expanding gambling - like addiction - they think, "well that won't hurt me..." or "we already have all the problems from the casinos in Connecticut and Rhode Island, so why not keep the money in Massachusetts..."

Perhaps they don't realize that the availability of more places to gamble won't just keep current gamblers in-state - but will actually create more problem gamblers - incidentally the gambling industry's best customer - and that modern slot machines are considered to be the most addictive form of gambling out there.

But it doesn't stop there. Expanded gambling brings more crime - requiring more enforcement, prosecution and incarceration.

And legalization of gambling in Massachusetts and the establishment of non-tribal casinos would require a state-run regulatory body - think Turnpike Authority.

And where gambling goes, so goes addiction, domestic violence, and child abuse and neglect, and so follows a greater need for social services.

And for every senior citizen who enjoys a day at the casino - there are others who'll lose their life savings - at a time in their life when it is unlikely that they would be able to recoup - and perhaps requiring public assistance.

Local businesses and tourism lose out, too. There are only so many discretionary dollars in local pockets. It's a casino's job to keep people inside - not to frequent local businesses. The majority of casino jobs are low-paying and do not result in a great deal of secondary spending within the community - and racinos add even fewer jobs. Additionally, casinos and racinos are completely at odds with the Massachusetts brand of being a tourism mecca to history, culture, and provider of world-class education.

Bankruptcy, foreclosures, embezzlement and other white collar crimes are mainstays of expanded gambling, and also come at a cost to communities, families and businesses. Communities - like those around the Connecticut casinos - may need to pay to clean up added road trash and police increased traffic, drunken driving, hot-bunking and youth gambling.

And, in Connecticut, towns around the casinos report drops in property values on roads leading to the casinos.

Corruption often precedes and follows expanded gambling. It's price is paid by both the public and in the public trust.

But let's not forget the costs to Democracy. The gambling industry's well-funded lobbying efforts and inflated promises spin decision-makers heads. Before long, transparency has been eroded while citizens are denied their voice in government and control over their own quality of life. It's already happened.

Costs. They're real. And they belong on the balance sheet.

Gambling and the Economy

From an interview with John W. Kindt, business professor, national gambling critic,and contributing author and editor for a new, three-volume book collection that offers the most comprehensive analysis of gambling to date. in an interview with News Bureau Business & Law Editor Jan Dennis.

Q. How does gambling drag down the economy?
A. When money is spent on gambling, it's not being spent on cars, refrigerators, computers and other products that create manufacturing, service and other jobs that drive the consumer economy. For every $1 that's gambled, you lose $3 to the consumer economy because an economic multiplier effect triples the value of every consumer dollar spent, creating more jobs that supply goods and services. On top of that, gambling causes social costs that are a drain on taxpayers. Research shows that in areas with casinos, the rate of new addicted gamblers doubles, bankruptcies rise 18 to 42 percent even when the economy is good and crime goes up 10 percent every year. So the social costs to taxpayers are $3, $4 or $5 for every $1 in benefits.

Q. What about industry claims that gambling fuels economic growth?
A. The industry claims that casinos create jobs, but 90 percent of the money spent on casino gambling goes into slot machines. Slot machines don't create jobs. All you do with slot machines is dust them off and collect the money. On average, every slot machine takes in $100,000 a year, which is a loss of $300,000 to the consumer economy based on the multiplier effect. That costs the consumer economy a very good job with very good benefits. So every slot machine takes away a job a year, and there are tens of thousands of them. The gambling industry claims jobs, jobs, jobs, and that's not true. But if you say it loud enough, long enough, with millions of dollars behind it, people start to believe it.

Q. Has there been any change in a two-decade trend that has rapidly expanded gambling in the U.S. and around the world?
A. Russia has closed 2,230 casinos, leaving only four in isolated areas. Siberia is the one that comes to mind. Russians who want to gamble now have to go to Siberia. So what do the Russians know that we don't know? I think they reached conclusions similar to those of our U.S. National Gambling Impact Study Commission more than a decade ago. Gambling weighs down the economy and increases crime, corruption, bankruptcies and gambling addiction. It's just not worth the cost. The Russians even called it a national security issue, which parallels our research. No nation can maintain a strong military presence with an economy drained by gambling that gets weaker, weaker and weaker.

Conroy Analysis

In March 2008 Representative Thomas Conroy wrote a twenty-page, quantitative and qualitative analysis of the three resort casino proposal promoted by Governor Patrick. You can view a copy of the report here. Among the conclusions Rep. Conroy reached are:
  • Destination resort casinos are not consistent with the state's tourism value proposition or brand, and, therefore, will not be as financially successful as proponents hope.
  • The gaming industry will not fuel the creation of new, tangential, cutting edge industries in Massachusetts.
  • The Massachusetts state government should support win-win industries such as life sciences, renewable energy, financial services, and information technology that will create new, spin-off industries, which has been the growth model for the Massachusetts economy in the past.
  • Long-term slot machine gambling may diminish as slots compete with the internet / video game generation's more sophisticated gaming preferences.
  • Three destination resort casinos in Massachusetts would likely reduce state lottery revenues transferred as state aid to towns and cities by about $200 million.
  • Median hourly wages for the jobs to be created by destination resort casinos are likely well below $10/hour and $20,000/annually.
  • The number of problem gamblers that would arise could range from 50,000 to 100,000 residents of Massachusetts, creating significant financial and social costs for the state and far exceeding the number of jobs to be created.

Gambling and the Poor

"The social costs of gambling, in low income communities, could be devastating."
--Barrack Obama (2003)

Gambling is not the "painless" tax that gambling promoters like to claim. Rather, it is a highly regressive form of taxation that thrives by inducing false hopes among the financially destitute. Government's multibillion-dollar annual take from gambling activities comes disproportionately from the pockets of America's poor. This has been most clearly evidenced in numerous statewide studies of lottery behavior over the last couple of decades. However, as casinos, racinos and the like are made more accessible, it has become increasingly clear that all forms of gambling prey heavily on those with meager financial resources. Some statistics:

Seven percent of Illinois casino gamblers surveyed reported annual incomes below $10,000. Half of these individuals reported losing at least $1,900 to the casinos in the previous year.

In a 1994 survey, 50 percent of Wisconsin casino gamblers reported an annual household income below $30,000. (The median income in Wisconsin that year was $35,400.)

The 1976 U.S. federal gambling commission found that the poorest Americans spend three times as much of their income on gambling compared to the wealthiest Americans. A Texas A&M study found that the lowest-income group of Texans, who earn only 2 percent of the state's total income, provide 10 percent of the lottery's revenue.

In New York, those living in the most impoverished areas of the state spent eight times more of their income on lottery tickets than did those living in the most affluent sections.

A 1996 Mississippi State University study found that poor Mississippians living in counties with casinos lost a far greater percentage of their income in the casinos than did wealthier gamblers. Gamblers earning less than $10,000 per year lost about 10 percent of their family income to casinos, while those earning more than $40,000 spent only about 1 percent of their earnings on casino gambling.

In New York, those living in the most impoverished areas of the state spent eight times more of their income on lottery tickets than did those living in the most affluent sections.

A study of 1,800 Minnesotans in state-run gambling treatment programs found that 52 percent had yearly incomes of $20,000 or less. The study also discovered that the amount of debt, as a proportion of income, was highest among the poorest gamblers seeking treatment.

"(Gambling) involves simply sterile transfers of money or goods between individuals, creating no new money or goods. Although it creates no output, gambling does nevertheless absorb time and resources. When pursued beyond the limits of recreation, where the main purpose after all is to kill time, gambling subtracts from the national income."

--Nobel Laureate Paul Samuelson



In a bet there is a fool, and a thief.

In the late 1800's a California mechanic invents the first slot machine. It comes equipped with three wheels, decorated with five symbols each and is intended to entertain the wives and girlfriends of the men at the gaming tables. But it quickly finds a larger audience. The chance of a hitting the jackpot? 1 in 1,000. The payout: 50 cents - paid out in nickels.

Over the years, the symbols on each reel increase, decreasing the odds of someone hitting the jackpot, while increasing the amount of the jackpot itself.

By 1970 the standard slot machine has a reel with 22 symbols - half of which are winning symbols and the other half blanks. The chance of hitting the jackpot is now 1 in 10,648.

But gamblers are interested in even bigger payoffs, so slot machine makers add bigger reels to hold even more symbols, then added more reels.

But these improvements don't fly with machine gamblers who know the odds of hitting the jackpot are better on the older machines.

Then, in 1984, Inge Telnaes invents a slot machine powered by a micro chip. The chip, not the reels themselves, now determine the outcome of every spin and it becomes possible to decrease the odds of hitting a jackpot while still having the machine appear to offer much better odds. Essentially, working on the same principle as a pair of loaded dice.

The president of Bally Gaming, among other players in the industry, objects to these new machines, writing to the Nevada State Gaming Board that "It would appear to us that if a mechanical reel on a slot machine possesses four sevens and it is electronically playing as if there were one seven, the player is being visually misled."

Nevertheless, in a decision that would change the course of the gambling industry, the Board approved the Telnaes machines - and 'virtual' reels become the new industry standard.

Over time, slot machines are adapted to encourage players to play faster, longer, and for larger wagers than ever.

Ergonomics, visuals, sounds, buttons instead of levers, credit cards and slot club cards instead of coins, bonus rounds, rapid-fire pay outs, deceptively programmed near-wins, machines engineered to allow the player to play more intensively - and to lose faster. Addiction experts begin to refer to slots as the "crack cocaine" of the gambling industry.

The modern slot machine has now become the industry's cash cow, with 70 - 80% of all casino revenue originating from slot machines - and 60% of that revenue coming from problem and pathological gamblers - making this demographic the industry's best customer.

States without gambling decide to get in on the action - by "recapturing" gambling dollars going out of State.

But costs associated with gambling are difficult to quantify and therefore often not factored into, or are underestimated in cost/benefit studies.

Gambling legislation is passed, in no small part due to ignorance of the product, budgeting and political pressures, influence from lobbyists, improper or inadequate review of the data, artificial urgency, and overstatements of benefits.

While in-state gambling does recapture some revenue and create mostly low-paying jobs, it also creates more addicts. It brings increased crime and social problems which will require State and local intervention. Property values decrease, local businesses, lotteries and charities suffer from limited discretionary dollars. The industry must be regulated. Cost per pathological gambler per year is $11,300. The cost per U.S. household, even for those that do not gamble is $460.

New slot revenue is quickly spent, but now impacts like crime and social problems have become more apparent and costly, as does regulation, requiring a new State bureaucracy with State employees with pensions and health care.

Revenue is somehow not paying for everything it was supposed to.

Then, neighboring states decide to legalize gambling in their own effort to recapture revenue.

Gambling revenue is no longer enough, but by now the State has become dependent on it.

Competition from other States, along with normal dips in the economy assures drop in gambling revenue, but the State has now become both regulator and stakeholder in gambling industry.

So... State sells more casino/slot licenses, repeals smoking ban, lowers the gambling age, allows 24/7 drinks, relaxes previous regulations, gives concessions to investors, opens more gambling venues

- all in order to create more problem gamblers - that all-important demographic - which in turn creates more impacts, resulting in less money for the State.

Now State has casinos, slots, another growing bureaucracy, multiple financial and social impacts, not to mention lives ruined, children neglected, businesses hurt, people dead - and STILL NOT ENOUGH REVENUE.

Meanwhile... billionaire casino moguls like Steve Wynn (and the policy analysts who love them) continue to smirk all the way to the bank.

--adapted from
Slotonomics 101
by 'Gladys Kravitz - Middleboro's Nosey Neighbor'