Casino Gambling Food for Thought

Allow me to get right to the point: Like it or not, state sanctioned casino gambling in the United States is here to stay. Not so much because Americans like it. Gambling existed illegally in underground circles prior to its legalization and would continue to exist in the shadows of the law if it was banned. Not so much because casino owners and operators want it. The giant corporations that run casino gambling in this country would find other entertainment venues. It's because state and local government coffers need it, they've grown to depend on the revenues it generates.

Gambling and the levels at which it is taxed are the last great bastions of revenue sources for politicians to tap into. Raising sales taxes, income taxes, property taxes, and cutting social programs are things that our elected representatives hate to suggest or even discuss. But no politician was ever kicked out of office for voting for an increase in the gambling taxes.

State and local governments were the beneficiaries of about $3.6 billion in gambling taxes in 2001. The money was used for a variety of projects and used to subsidize many programs. The morality of the source of these dollars, the right and the wrong of gambling, is not at issue here. The bottom line is that states with legalized gambling aren't going to ban it anytime soon.

Take a look at the states that were the biggest tax collectors on commercial casinos in 2001: Nevada ($688 million), Illinois ($555 million), Indiana ($492 million), Louisiana ($374 million), New Jersey ($342 million), Mississippi ($322 million), Missouri ($322 million), Michigan ($219 million), Iowa ($216 million), Colorado ($92 million), and South Dakota ($5 million).

If anything, casino gambling is going to expand. Lawmakers in 26 states are expected to debate some form of gaming expansion in 2003. With many state budgets hurting, lawmakers previously opposed to casino gambling will be inclined to look at gambling in a different light. There are already almost 1,000 commercial and Native American casinos in this country.

Americans made 302 million visits to casinos in 2001, triple the number a decade earlier. That is one-fifth the trips they made to the movies, but it's about the same number of trips they made to golf courses and almost identical to the number of trips they made to theme parks.

Whereas Americans spend billions and billions of dollars on gambling in this country every year (almost $25 billion on slot machines in the state of Illinois alone last year), remember that a large percentage (approximately 95 percent of money wagered on slots) is returned to gamblers in the form of winnings. If you are a recreational gaming enthusiast who partakes of a casino outing as a form of entertainment, you have a chance to lose, break even, or win. What other entertainment venues afford that opportunity in addition to the pleasure you derive from a night out?

Last year Americans spent $400 billion on restaurant meals, $41 billion on basic cable television, $38 billion on do-it-yourself lawn and gardening products, $25 billion on golf, $23 billion on music and movies, $21 billion on snack food, and $19 billion on coffee. Unlike these expenditures, however, expenditures associated with casino entertainment are generally taxed at a much higher rate.

Sure, there's a dark side to gambling. But there's a dark side to many other ways we spend our entertainment dollars. How about the billions of dollars that are bet every year illegally on sporting events, money that state and local tax bases never see? How about the office pools on the NCCA Basketball Tournament, the Super Bowl, baseball fantasy leagues, and weekly NFL games?

Take the Illinois State Lottery for example. It is marketed and promoted quite heavily in newspapers and the electronic media. Even TV and print media news divisions cover, and thereby advertise and promote, the jackpots when they grow to tens of millions. But the odds against winning the jackpot are astronomical. Half of every dollar bet on the lottery is taken by the state.

When's the last time a progressive slot jackpot at a local casino was hyped by the news? Fact is, the odds against winning that jackpot are far less than winning the lottery.