The State Gambling Addiction: Politicians Are Bleeding Problem Gamblers to Fix Their Budgets—and It Isn’t Working.
In January, New York governor Andrew Cuomo announced a bold plan to bring a $4 billion casino and conference center to Queens. But the plan fell apart within months, thanks to the reluctance of the state’s prospective partner, the Malaysian gambling company Genting, to undertake the massive investment without a guarantee that it would have the exclusive right to operate casinos in New York City.
New York is one of several states that don’t want to be left behind as their neighbors institute more and more varieties of gambling. At least 12 states, facing downturn-depleted coffers, have already expanded gambling efforts over the last three years—including Massachusetts, which became the 16th state to sanction casinos. But this approach is utterly misguided, since gambling has often disappointed as a fiscal tool and as an economic-development strategy. As legal gambling has spread, competition for limited dollars has intensified, and the new gambling enterprises seem merely to be siphoning money from elsewhere in the economy instead of generating new economic activity. “This is not an industry that creates wealth,” says Les Bernal, head of the Stop Predatory Gambling Foundation. “It’s an industry that transfers wealth.” And that’s before taking into account the documented social costs, including the disturbing fact that a significant part of gambling revenues comes from problem gamblers.
Gambling has been part of the American experience since the Founding. In the eighteenth and early nineteenth centuries, privately run lotteries, authorized by states, helped raise funds for everything from religious institutions to colleges. Harvard and Yale, for example, financed some new construction with lotteries. But as the practice grew more popular, fraud and other abuses increased, leading to a backlash. From the 1830s on, states began banning lotteries. The last state-sanctioned one ended in 1894, and the following year, Congress prohibited the interstate promotion of lotteries, making it tough to launch new ones.
