Bad economic times have increased calls for gambling expansion in Minnesota. Advocates argue that profits and taxes from gambling proceeds will eliminate our state's financial deficits, help ailing local businesses and potentially cure just about everything else that needs fixing. Legislation has been introduced in St. Paul to put slot machines in neighborhood bars, establish a casino at the airport, legalize betting on sports, as well as to allow racetracks to become "racinos" -- or, as they becoming more accurately known in other parts of the country, fleecinos. That term was coined because, frankly, these are the latest venues to fleece people out of their money.
With these proposals, gambling advocates are looking for easy solutions to a difficult problem. But they are betting on a bad hand. More gambling won't solve our state's economic problems -- it will only serve to deepen the wounds for thousands of families who are affected by gambling addictions.
Minnesota already has too much gambling: the lottery and its multitudes of games of chance; tribal casinos; two racetracks and their card clubs, and charitable gambling in nearly every community.
This year, legislators face tough decisions on tightening government's belt or raising taxes. Gambling comes with a cost, and expanding legalized gambling -- literally the state promising something for nothing -- isn't the answer. Recent statistics back up this premise: University of Illinois Professor John Kindt recently testified "that each slot machine takes in $100,000 per year. Well, that is $100,000 dollars out of the consumer economy." That dollar amount, however, doesn't include the increased social cost of expanded gambling. Another professor, Earl Grinols, has delved deeply into the social costs of gambling. He reported that "[t]he costs of problem and pathological gambling are comparable to the value of the lost output of an additional recession in the economy every four years." It's sadly ironic that the purported solution to our recession would be to plunge the state into worse economic turmoil.
Minnesota isn't alone in having tax and spending woes -- and those who peddle easy solutions to difficult problems have been selling their woe-filled wares across the country. A recent survey of proposed legislation shows that nearly a third of all states are considering new or expanded gambling operations as an easy way to easy street for legislators.
But if gambling reports from other states are any indicator, it's clear that more gambling in Minnesota will present more problems than solutions.
For example: Kansas approved state casinos in 2007 with the promise that $200 million from their proceeds would be used for such noble causes as property-tax relief and building infrastructure. Two years have passed, and private casino developers have dropped plans for three of the four planned casinos -- leaving the state coffers filled with empty promises.
Maryland found out much the same when only one of the six proposed casinos even drew a bid from developers -- prompting the state Senate president to say that the bidding process was in "disarray."
Ohio, a state with more than twice our population, was betting on $292 million of income from the first year of a new Keno game. Thus far the game has grossed $46 million -- hardly the winning hand that policymakers bet on.
Cash-strapped Illinois upped the ante and decided to sell an additional casino license. Legislators conservatively estimated that the license would net the state nearly $600 million. The "winning" bid came in at one-fifth that amount and with no money up front to allay current budget woes.
Minnesotans will also learn that what happens in Vegas isn't quite what used to happen in Vegas: Gambling isn't immune to economic downtowns. Gambling revenues from the Las Vegas strip dropped nearly 23 percent during December, the 12th straight month of decline. Here at home, the Running Aces racetrack lost $4 million during its initial season and continues to eliminate jobs once promised as a form of economic development for rural Anoka County.
It's clear that Minnesota lawmakers have some serious work ahead as they balance the budget. It's also clear that more gambling is not the answer to the state's financial problems and is a bad bet for our future.
Jack Meeks, Minneapolis, is chairman of Citizens Against Gambling Expansion.