[kenberg]

A recent thread discussed MCCain's gambling, which reminded me. On election day I will have a local problem and I haven't decided on it yet.

Maryland wishes to amend its constitution to permit slot machines. There would be licenses with the state getting a substantial cut of the take. It's up for referendum in November.

Like most states, Maryland could use the cash. And if a bunch of nice folks want to save me some tax dollars by dumping their paychecks into slot machines, who am I to say no. OTOH. While the state takes about two-thirds of the cash, that means someone else takes about one-third. Unlike farming or steel work or ship building, slots produce nothing of value. The estimated take for the state is around 600 million (I'm skeptical, but so say the advocates). That means around 300 million flows out of Maryland into the hands of someone else (the gambling interests are for the most part out of state I understand), with absolutely nothing of value being produced. The state will use 100 million or so to subsidize horse racing, thus livening up another opportunity for folks to throw their money away at the tracks.

Nearby state have slots, and so the argument goes that they suck money from Maryland.

I'm inclined to vote no. Generally I am skeptical of an argument that essentially goes "Let's you and me get rich ripping off the suckers". Often I am one of the suckers he has in mind. Those with experience or thoughts are encouraged to comment.

[jdonn]

kenberg, on Sep 30 2008, 02:08 PM, said:

I'm inclined to vote no. Generally I am skeptical of an argument that essentially goes "Let's you and me get rich ripping off the suckers". Often I am one of the suckers he has in mind.  Those with experience or thoughts are encouraged to comment.

I think voting no is absurd. The slot machines do provide value, the value is entertainment. Would you vote that there should be no televisions, movies, theaters, sporting events, concerts, or dances as well? Should the state lottery be illegal? I have always been against this, even long before I moved to Las Vegas and started working in casinos. It's not the government's or anyone else's business to ban forms of enjoyment or entertainment that don't have inherent negative externalities.

Meanwhile, whatever money they make will do a lot of good. That money mostly goes to schools here in Nevada, and means people don't pay state income tax. It also attracts more tourists and people to move to the area. It's such a win win all around that I don't understand the argument at all.

[mike777]

Money is fungible.

http://en.wikipedia....iki/Fungibility

On top of that what happens when the money goes to schools is fun.

Example: Schools budget 300 million 2008 from non gambling sources......now 2009 there is 300M more(gambling money) in budget that must go to schools.... no problem.



School budget for 2009 is 450 million.......300M from gambling....150million from non gambling sources. You got 150M for new pet nonschool projects.....

[kenberg]

The argument that it's not my business how folks want to spend their own money has some force with me. I'll get back to it.

Let me address the self-interest (schools and such w/o the tax burden). Nevada is different. Folks fly in from everywhere for the casinos and the shows. People will not be flying in to play our stupid little slots. The upshot is that the net flow of money for Nevada is in, the net flow of money for Maryland would appear to be out. That's a big difference. If convinced the flow were inward, I would probably vote yes.

Now about butting into other's business. I'd rather not. But nationally we are seeing that sometimes we should. It's not my business if some guy buys a house that he cannot afford or if some fool banker gives him a mortgage that the guy can't handle. Individually it is not my business but collectively these idiots are screwing up the economy big time. My concern here is that out of state gambling interests will be siphoning off from the state 300 mil or so a year (that's for starters, I assume they will expand their operations) and we get left holding the bag. I didn't buy a house I couldn't afford and I sure as hell won't be playing slot machines. But I will be ponying up cash for the mess left by the homebuyers/bankers and I worry that something similar will come from the legalization of slots.

If money goes into someone's hands, it comes out of someone else's hands. If the flow results in some apples on the shelf, this is good. No apples here.

[mike777]

kenberg, on Sep 30 2008, 02:41 PM, said:

The argument that it's not my business how folks want to spend their own money has some force with me. I'll get back to it.

Let me address the self-interest (schools and such w/o the tax burden). Nevada is different. Folks fly in from everywhere for the casinos and the shows. People will not be flying in to play our stupid little slots. The upshot is that the net flow of money for Nevada is in, the net flow of money for Maryland would appear to be out. That's a big difference. If convinced  the flow were inward, I would probably vote yes.

Now about butting into other's business. I'd rather not. But nationally we are seeing that sometimes we should. It's not my business if some guy buys a house that he cannot afford or if some fool banker gives him a mortgage that the guy can't handle. Individually it is not my business but collectively these idiots are screwing up the economy big time. My concern here is that out of state gambling interests will be siphoning off from the state 300 mil or so a year (that's for starters, I assume they will expand their operations) and we get left holding the bag. I didn't buy a house I couldn't afford and I sure as hell won't be playing slot machines. But  I will be ponying up cash for the mess left by the homebuyers/bankers and I worry that something similar will come from the legalization of slots.

If money goes into someone's hands, it comes out of someone else's hands. If the flow results in some apples on the shelf, this is good. No apples here.

Ken you seem to be saying if someone gambles too much and has no retirement money or food for the baby or money to pay for the house that some how affects you negatively?

Also keep in mind if all these out of state people pour into your state to gamble your state now gets to spend more on roads, sewer and water, hospitals, etc.

Look at all the homes and infrastructure Nevada has built with the gaming boom. The gaming money goes to schools and no state income tax!

[Al_U_Card]

As long as there is accountability and information available concerning placement of the acquired funds.

Just putting large sums into the general account is asking for trouble.

[BillHiggin]

The 300 million you see going to out of state interests needs to be compared with the status quo. This will not all be new slot machine activity. A significant portion will be in state play by people that would have gone out of state to play their slot machines. If as little as 1/3 of the activity on the new in state machines is such redirected play then the 300 million was already headed out of state and that number remains unchanged (but 600 million in new state revenues has appeared).

[Lobowolf]

I pretty much agree with Josh's post entirely, other than I wouldn't call opposition "absurd." More like a value judgment I don't ascribe to. I'm not a fan, in general, of criminalizing activities between consenting adults that don't directly and imminently harm third parties.

Even if people don't fly in from all around for your slots, you'll probably pick up some drive-in traffic, if it's illegal in neighboring states. I think the economics of it are benficial (job creation, tax revenue, etc.), but that's a side argument to me. Primarily, for me, it's like one of the popular arguments in favor of legal gay marriage -- If you're opposed to gay marriage, don't marry someone of your sex. Similarly, if you're opposed to slot machines, don't play 'em.

[Al_U_Card]

Seems to me that the folks in Atlantic City weren't that enamored of the effect of "Casino Alley" on their community's well-being...

[crazy4hoop]

I believe A.C. was pretty much a ghetto before the casinos arrived. Now, it's still a ghetto but with casinos surrounding it. It reminds me of Chris Rock commenting on how crack was ruining the ghetto: "Like the ghetto was so nice before crack!"

[onoway]

There IS a cost to the gambling, esp the slot machines. These came to Alberta a few years ago and I know a few people who have ended up the worse for it.
Examples are a 26 year old marriage dissolved/bankruptcy proceedings Another person lost their small company because of not monitoring the accounts sufficiently after an employee of 10 years got in too deep. Another is a business which cancelled all the Christmas bonuses for their employees because one of the owners lost $60 000 in the slots.

There are stories in the paper of small children being left in cars in parking lots while parents play, or unattended at home. The use of the food banks has risen sharply.

A friend of mine was terrorized after she had a fairly big win by being followed, first on foot ( she had a casino escort) and then by car by four young men, an adventure which included a wild race through various subdivisions.( The first was to confirm she was being followed and not just paranoid, after that it was pretty much just terror).

Unfortunately it seems that often the people most desperate or least able to afford to lose money are the ones who gamble, and slots are so quick and hypnotic people can lose a lot of money very quickly indeed.

Addiction is a reality for a percentage of the population and addiction leads to social costs. Whether those costs balance out is a matter of opinion.

In spite of being awash in oil and gambling revenue Alberta still has income tax, a severe shortage of hospital beds, nurses and doctors, still charges health care premiums,has an education system which claims the schools are all falling apart, and a lousy environmental score. So more revenue doesn't necessarilly mean much of value comes out of it. Sometimes more money just means you don't have to be as careful about what you do with it.

Btw this is not to suggest that anyone who enjoys gambling is doomed to disaster. I am always up for an afternoon at the races. But the slots in particular are not an unalloyed answer-to-all-prayers uness you are a casino owner.

[jdonn]

onoway, on Sep 30 2008, 05:11 PM, said:

Addiction is a reality for a percentage of the population and addiction leads to social costs. Whether those costs balance out is a matter of opinion.

I tried to avoid bringing this up, but figured it would be. Addiction must of course be handled and prevented to any extent possible, but it's not inherent and so not a reason to ban slot machines. Not any more than it's a reason to ban horse tracks, alcohol, sex, chocolate, Monday Night Football, BBO, or any of the other thousands of things people get addicted to that are already legal in Massachusetts.

Every other argument you made is inherently ridiculous to use as a reason. For example, your argument that the government mishandles the money is of course ludicrous. Are you suggesting those problems you mentioned would be better if the government got less revenue? No one said it solves all your problems, it simply gives you a tool that is otherwise unavailable. If you don't like how the government uses the money then elect a new government! If no one is running who will handle the money properly, run yourself!

[glen]

CNN had an article on "gambling" today:
The $55 trillion question

CNN said:

...credit default swaps became the world's largest casino. As Christopher Whalen, a managing director of Institutional Risk Analytics, observes, "To be generous, you could call it an unregulated, uncapitalized insurance market. But really, you would call it a gaming contract." ... In 2003 Warren Buffett famously called derivatives "financial weapons of mass destruction."

[hrothgar]

Its interesting that folks have brought up the question of addiction...

My opinion about gambling is (essentially) the same as my opinion about drugs. I recognize that drugs (and gambling) present problems for many people. However, at the end of the day trying to ban either seems more trouble than its worth.

I think that there's a happy medium where gambling is legal, but regulated and taxed. Moreover, I think that a significant portion of the tax proceeds should be plowed back into programs designed to assist compulsive gamblers and help to ameliorate the social costs.

Too many municipalities seem to view legalized gambling as a simple solution to their monetary problems. I think that a more reasonable to plan on breaking even on gambling (maybe make a small profit). The State's primary goal should be to force numbers rackets, offshore casinos, and the like out of business...

[pclayton]

Gambling is a great form of entertainment. Bans against gambling are a carryover from our Puritan days.

Can someone get hooked? Yes, not at all unlike cigarettes, booze, porn, crack, or an assortment of legal and illegal substances. But its their life and they can do what they want with it.

Do others get tired of the Nanny state?

If the money goes toward schools in Maryland its a no-brainer as far as I'm concerned.

By the way, I think a lot of the distinctions between "table games" and "slots / games between players (rake)" are kind of a joke. There's an Indian casino down here that has a silly form of craps that uses cards, simply because they can't use dice.

[Lobowolf]

pclayton, on Sep 30 2008, 07:14 PM, said:

Do others get tired of the Nanny state?

Well, yeah! Not to mention, with this state in a budget crisis, seeing the trail of taillights heading up I-15 on Friday and coming back on Sunday after having spent those dollars next door.

But mostly the nanny state.

[Lobowolf]

pclayton, on Sep 30 2008, 07:14 PM, said:

Bans against gambling are a carryover from our Puritan days.

At least in our state, bans against it, and limitations on it, are also a product of a "crusading" lawmaker who not coincidentally has Vegas or Indian casinos listed on his campaign contributions disclosure form. Or so I found out when checking out one former State Assemblyman in my journalism days. I have a strong feeling it was hardly a unique situation.

[matmat]

what's the line on this amendment passing?

[kenberg]

The morality/freedom arguments are a little tricky. From the freedom point of view I would favor allowing gambling between consenting adults. That isn't what is being proposed. A friend plays in a high stakes poker game. It's illegal now, it would be illegal if the slots referendum passes. Drugs were mentioned. The analogy doesn't hold. I can see arguments both philosophical and practical for, say, legalizing at least marijuana. I would not however favor having the state go into the drug business and create an advertising campaign to get people to come to state licensed drug parlors. This, with gambling in place of drugs, is what is up for referendum. Legalizing gambling, as a free private activity, is not being contemplated.

Anyway, morals differ and it is more or less hopeless to discuss such things. Practicalities can be discused.

The state run lottery was mentioned a couple of times. It has been very successful in parting fools from their money. How would that fare if slots are introduced? Would people just add on slots play to lottery play or would there be some substitution? It matters. As I understand it, virtually all of the money spent on the lottery stays in Maryland. That's very different from the planned slots. Further, the benefits from the lottery are spread around. The guy where I buy my wine sells lottery tickets. So does the guy at the convenience store. If folks put their lottery money into slots, then a much larger portion of the profits disappears out of the state and neighborhood stores lose out. The slots will be at a small number of locations and the folks raking in, and keeping, the cash will not be local. Certainly it will not be my local wine merchant. Given that we are going to raise a portion of our revenue by gambling, the lottery seems to be a far better deal for the state. Further, I am pretty sure that there are already some instant winner variations for the lottery. I can't give details since I don't play. It would not take that much to add in some more and keep the revenue in state. You could probably get it so that the difference between slots and the lottery were very small. But it would keep the profits instate and partially local.

The gambling industry wants to put in slots. That's in their interest. It's far from clear to me that slots are in the interest of the rest of us, even those of us who will certainly leave them alone.

I was taught to be suspicious of offers of free money. If you believe the advertisements for the slots places in the nearby states, everyone goes home a winner. If you believe the arguments from the slots industry, all we have to do is let them put in their slots and we will be awash in dollars. Yeah, maybe. Maybe not. I'm not from Missouri but my wife is. So naturally I've got my doubts.

[jdonn]

kenberg, on Sep 30 2008, 07:47 PM, said:

The gambling industry wants to put in slots. That's in their interest. It's far from clear to me that slots are in the interest of the rest of us, even those of us who will certainly leave them alone.

They are in the interests of people who want to play them!

All of this is easily solved. If you are worried that 1/3 of the money is leaving the state, why not show some ingenuity and start your own in-state slot machine company? If you don't believe enough of the revenue is coming from out of state, why not put slot machines in the busiest airports and tourist centers?

Quote

I was taught to be suspicious of offers of free money. If you believe the advertisements for the slots places in the nearby states, everyone goes home a winner. If you believe the arguments from the slots industry, all we have to do is let them put in their slots and we will be awash in dollars.

Come on. Do you really think this is a reason to ban them? This would be a reason to ban about 98% of all advertised products!