Gambling Insanity: Political Chicanery and Cowardice

· Tuesday, January 31, 2012

Any way you slice it, state sanctioned gambling is a bad bet. And it’s an easy cop out for tax hungry politicians.

A well-known expression attributed to Albert Einstein defines insanity as "doing the same thing over and over again and expecting different results."

Well, if that's insanity, then most state officials are quite insane when it comes to gambling: for more than two decades, they have looked to casinos, lotteries, slot machines, and video poker as a way out of their budgetary woes.

In virtually every instance, actual revenues fell far short of expectations: There was no pot at the end of gambling rainbow. Whatever added revenue was gained came at the expense of social problems associated with gambling.

At this point, a sane person might conclude that it really wasn't worth the trouble. But state officials seem intent on proving Einstein right.

Case in point: a recent New York Times story about states possibly legalizing online gambling. Specifically, the goal is to get a cut from the online poker industry. The thinking is that just as the states took the various numbers rackets and turned them into state-run lotteries, the states could do the same with online poker.

The states would sell licenses to websites and tax the game operators' earnings. And thanks to a favorable ruling from the Obama Justice Department just before Christmas, states now have the green light to proceed.

As Einstein might have predicted, the case for government-licensed online poker is drearily familiar: industry trade groups are predicting billions in additional tax revenues, an enticement state legislators find hard to resist. As a California legislator put it, "Two hundred and fifty million dollars buys you a lot of teachers."

Ah, the old "we're doing it for the children" gambit. The same gambit was employed in Florida in support of casino gambling. It didn't turn out that way. Casino money didn't "fix education" as politicians promised. In fact, the state wound up spending less money on education after legalizing casino gambling than it did before.

Folks look, this whole thing is a political shell game.

Licensing and taxing gambling is an easy out for every lilly-livered politician who refuses to make tough political and budgetary decisions. And it perpetuates the illusion that you can get something for nothing.

Since support for state-sponsored gambling is a way to avoid hard truths, you are unlikely to hear this. Likewise, you are unlikely to hear that lottery revenues are the most regressive of taxes, since the poor spend a larger proportion of their income on gambling. You also won't hear about the social and personal costs associated with gambling, including crime, family breakdown, and on and on -- up to $10,000 a year for each compulsive gambler.

So let's be honest: As Alan Mallach of the Brookings Institution put it, "every dollar dropped into a slot machine is a dollar not spent on something else." It's taking money away from things like groceries and child support.

None of these arguments are new: state-sponsored gambling has always been a sucker's bet, which makes the newest rush to expand it, well, insanity.


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Comments

BoFromTexas

Florida is a perfect example. Get the lottery! It will decrease your property taxes because the money will be spend on education! Lottery happened. Lower taxes did not. Lots more people spending themselves into poverty on false hopes, other winners fighting tooth and nail over the proceeds. The usual outcome, as expected.

Posted January 31, 2012 at 12:46:30 PM


Army Officer (Ret)

My favorite bumper sticker says,

"The lottery: a tax on people who are bad at math."

Tongue-in-cheek, of course, because gambling is not a tax. It's stupid, but it's not a tax.

And anyone who falls for the idea that money from ANY source is earmarked for ANY budget item should look up the word "fungible."

But the real point is whether the state has a compelling interest in telling adults what they may and may not voluntarily do with their own money.

For the record - I do not gamble: not even token bets, church-basement BINGO, or office pools.

Having said that, I do not see any valid conservative argument for allowing the state to tell people that they may not play games of chance with their own money.

What other diversions should we ban? Shall we outlaw Bollywood Romantic Comedies? Personally, I think that's a sure-fire losing bet, although my wife seems to find them occasionally amusing, even with the subtitles. The money she spends buying a video is also, "a dollar not spent on something else."

Oh, the horror! An adult American spending her own money on something she likes! Where will it all end?

Perhaps the ex-con Chuck Colson fancies himself a better judge of how Americans should spend their own money than they are.

I posit that the criminal mindset boils down to the idea that one's preferences should over-ride the rights of others. No wonder he went to prison - he has the mind of a criminal even now.

Posted January 31, 2012 at 12:54:11 PM


Aaron Stovall

I thoroughly agree with Army Officer (Ret). How competent adults choose to spend their money is their business.

Mr. Mallach's quote is silly. In fact, a dollar dropped in a slot machine is not lost forever, but gets re-spent by whoever ends up with it, be it a slot machine winner, casino owner or employee, and then again by whoever they spent it with, ad infinitum (save for the compound pain of taxation at multiple levels). Mr. Mallach would likely not make the same claim about a dollar dropped in a soda machine or spent on a sandwich.

Just as with government spending,* spending on gambling may be less efficient than other forms of spending, but the money does not cease to exist.

*Excepting deficit spending which is all bad.

Posted January 31, 2012 at 4:56:42 PM


JTG

Add to this that every time someone wins the lotto or some other type of windfall associated with gambling, the government has their hand out for their cut. We're talking about hundreds of millions of dollars per year. Did anyone ever hear what happens to this money? Oh yeah, the general fund.

Posted January 31, 2012 at 5:12:54 PM


Walter Parmantie

Doing the same thing over and over again and expecting different results is not insanity, it's stupidity. It's the failure to learn. In our modern day culture that celebrates sloth and denigrates achievement, this isn't much of a surprise. The only question that remains is; how long can this go on? After all, those 'lilly livered politicians' didn't shoot their way into power, they were put there by 'We the People'. Doesn't say much about our chances for survival, does it?

Posted January 31, 2012 at 7:27:33 PM


Emcee

Army Officer (Ret):

You sir, need to learn how to read before calling other people 'criminals'. Nowhere did Chuck Colson try to tell people how to spend their money. Chuck is, as I am, opposed to STATE-SPONSORED gambling. Note the last paragraph of Chuck's article:

"None of these arguments are new: state-sponsored gambling has always been a sucker's bet, which makes the newest rush to expand it, well, insanity."

Also re-read the quote from Mallach:

"So let's be honest: As Alan Mallach of the Brookings Institution put it, "every dollar dropped into a slot machine is a dollar not spent on something else." It's taking money away from things like groceries and child support."

Aaron Stovall:

Nowhere in this article is Mallach quoted as saying that the dollar spent on gambling is "lost forever".

But Chuck is correct when he says that money spent on gambling is money that might have been put to better use--especially in the families with lower incomes:

"It's taking money away from things like groceries and child support."

Wake up, gentlemen!

Posted January 31, 2012 at 10:10:03 PM


DMincey

Emcee: What gives you, or anyone else, the authority to say what is "better use" of other's money? You don't have to like or approve of what I do with my money; it is none of your business.

Posted January 31, 2012 at 11:06:16 PM


BoFromTexas

I had a client who could not make ends meet. He was a lineman for Florida power and Light, and was paid more money than I was making. His ex-wife told me that he was spending about 25% of every paycheck on Florida lottery tickets. So, the State of Florida was constantly telling him, and hundreds of thousands of others like him, to buy a chance on a get rick quick scheme, but pay no attention to his other responsibilities, such as child support, etc. That is why I object to state run gambling. It used to be a crime (read immoral) when private "entrepreneurs" were doing it, but suddenly became lawful (moral?) when the states began sponsoring it. I cannot advocate opening every gate and saying, "ya'll just go on and do whatever you want, just keep it on that side of the fence." That will only work for so long before the activity has leaked over onto my side of the fence. Dope addicts rob honest people to supply their habits. Addicted gamblers cheat their families, and creditors, by gambling. The Bible clearly instructs to avoid games of chance. There is a reason for this wise bit of advice.

Posted January 31, 2012 at 11:19:47 PM


Army Officer (Ret)

I've heard the saying, "Hell is being condescended to by idiots." I'm not sure who originated it, but there's a grain of truth there.

Emcee, for example, WRITES to tell me that he is of the opinion that I cannot READ.

Let that sink in for a minute.

It is, however, Emcee who needs to work on his reading comprehension, as I am correct and he is not. Here's why:

Chuck Colson is objecting to an initiative to legalize online gambling so the states can then run it like they run the lottery. Colson's exact words were, "Case in point: a recent New York Times story about states possibly legalizing online gambling. Specifically, the goal is to get a cut from the online poker industry. The thinking is that just as the states took the various numbers rackets and turned them into state-run lotteries, the states could do the same with online poker."

Call me crazy, but if something is illegal, and Chuck Colson thinks it should stay that way (since he compared a currently-illegal activity to a formerly-illegal activity that the states had taken over in the past), a person with even normal reading comprehension skills would be justified in thinking that he wants to continue that prohibition, although he didn't say it in those exact words. (That is a demonstration of why my reading comprehension was tested at college level in 3rd Grade, Emcee.) That is an example of ex-con Chuck Colson wanting to use the power of the state to keep people from spending their own money as they see fit.

And DMincey is correct that Mallach's statement is misleading: a dollar dropped into a slot machine does not disappear into the aether - it ends up in somebody's pocket to be spent on other things - perhaps even groceries or child support. Not that it's any of your business anyway. DMincey is also correct that the owner of the dollar is the one who gets to decide the best use for that money is - not you or ex-con Chuck Colson.

As for the morality of it: I actually agree with you and Bo. I do not approve of gambling. I do not even bet on trivial things. But I don't get to decide what the "best use" of someone's else's dollar is any more than you or Chuck Colson. And if I don't want people to tell me whether the way I decide to spend MY money is okay, I have to respect the rights of others to spend their money on things I think are wrong and/or stupid, like gambling. It's called liberty, and conservatives used to believe in it.

As for Bo's argument: I cannot find any conservative principle that states that it is the job of the state to keep people from doing dumb things to themselves on the chance that they might lead them to do other dumb things that impact other people.

He writes, "Dope addicts rob honest people to supply their habits. Addicted gamblers cheat their families, and creditors, by gambling."

But robbery and graft are ALREADY crimes, and the "prior restraint" argument provides no logical stopping point. That same argument can be made to prohibit all sorts of things that we all do every day. Sometimes people crash their cars while tuning their radios. Bo, would have us ban radios in cars? Cup holders? Oh no! Cup holders are actually purpose-built into cars to carry drinks! Drinking while driving is dangerous - even if it's just water you have to take a hand off the wheel. Time to ban those and require retrofits for all vehicles that have them now! I bought a rifle a while ago - that's a dangerous object that many would like to ban. I didn't spend THAT money on groceries, either. Where does it end?

The ONLY philosophically-coherent conservative position is that it ends when somebody's rights are infringed. An adult who doesn't understand math very well may find pleasure in buying lottery tickets and "dreaming big" for an hour or two. Considering the cost of movie tickets, that's pretty cheap entertainment. Not my cup of tea, but, hey, IT'S NOT MY MONEY.

Posted February 1, 2012 at 12:44:37 AM


Aaron Stovall

Emcee,

I did not quote Mr. Mallach in my previous comment, nor was it my intention to do so. I was using my own words to demonstrate the silliness of his position via the fallacy in his thinking. Examples of dollars "not spent on something else" abound. If I buy a shirt, I didn't buy food with that money. To assume the grocer suffers is to assume the tailor doesn't spend my former money (now his) on groceries.

My point is that the money doesn't cease to exist, it just isn't spent by that person on those things I presume Mr. Mallach approves of for the hypothetical slot player whose free will he disapproves of. It ends up in the hands of employees, vendors, owners, or the State (via taxes on gambling receipts) and those people spend it on whatever best suits them and their preferences.

I'm not sure how you're defining "state sponsored gambling." Mr. Colson includes both state run and merely state licensed gambling in his article, so his definition is not clear, either. He refers to state run lotteries multiple times to demonstrate his point, but the article itself is about the legalization, licensing and subsequent taxing of privately run online poker in California. There is a material difference between operations that are state run and those that are merely state licensed. it truly is apples to oranges.

Mr. Colson falls down when he tries to make the case for his values and morals being so superior to others' free will that his values and morals must be imposed via state force (i.e. Mr. Colson disapproves of gambling so it must be criminalized).

He mentions costs associated with compulsive gambling but provides no context. Are one percent of gamblers compulsive? Ten? In the absence of context this cost cannot be evaluated against the benefits of an industry that actually creates living wage jobs. For what it's worth, from personal experience I can cite literally hundreds of examples of people who found good-paying jobs in the gambling industry and were able to get off welfare and provide their families with better lives than they otherwise could. I propose this is a good thing for them, whether or not Mr. Colson, Mr. Mallach or even Mr. Emcee agree with how those people spent their incomes in turn :)

Finally, as to Army Officer (Retired) referring to Mr. Colson as a criminal, I refer you to Mr. Colson's own opinion column from January 21:

"I went to federal prison for my role in Watergate."

http://patriotpost.us/opinion/chuck-colson/2012/01/21/politics-and-peoples-lives/

If I'm mistaken in assuming this is why Army Officer (Retired) labled Mr. Colson a "criminal" he is free to correct me :)

Cheers,

Aaron

Posted February 1, 2012 at 3:45:41 AM


mmccrindle

If anyone wins a lotto you would do well to withhold 40%.

That is the minimum the government will take, not including any state tax.

They will throw you in jail and take ALL of your assets if you fail to pay that 40%.

Posted February 1, 2012 at 10:02:39 AM


Army Officer (Ret)

Aaron,

You are correct, Sir. Chuck Colson is a convicted felon and served time for his role in Watergate. He claims to have learned from his mistakes and to have converted to Christianity.

I have no reason to doubt him. For what it's worth, I consider him to be a fellow Christian, and a brother in the faith. I believe in redemption.

Having said that, he WAS a criminal, as he freely admits now. The point I made that Emcee didn't get was that he still THINKS like the criminal he used to be.

Criminals (by which I mean people who victimize others - I don't consider people who engage in victimless activities to be actual criminals) have a common mindset. That mindset is that what they want is more important than the rights of their victims. If the robber wants your property, he just takes it by force or fraud. Some crimes are done USING the legal system: if a woman gets tired of her husband she uses the courts to take his property and deny him access to his children. That is no less criminal - in the moral sense - than theft, extortion, receipt of stolen goods, and kidnapping (although it is "legal" and done in a courtroom).

By my stated definition Chuck Colson still has the mind of a criminal - he feels that his preferences regarding how people spend their own money should trump the rights of people to spend the money they earned on what they want. The fact that he considers it to be for their own good is utterly beside the point - how other people dispose of their own property is simply none of his business.

I end with this quote from C.S. Lewis:

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

Posted February 1, 2012 at 11:12:39 AM


slinger

Army Occifer, ret,

By my stated definition Chuck Colson still has the mind of a criminal - he feels that his preferences regarding how people spend their own money should trump the rights of people to spend the money they earned on what they want. The fact that he considers it to be for their own good is utterly beside the point - how other people dispose of their own property is simply none of his business.(RET)

Yet, you find no problem with the State promoting such as you deplore. I must ask: what is your disability rating/ Retirement check??? Yes, I know tricare sucks and does not come close to what you sighned(sic) up for.

Govt. lies, and "It's all Bush's fault." will not work anymore. My children know this.

As a Christian brother, I implore you to get off the Govt's teat. Your "mote" is very obvious.

Respectfully, (since you's an Occifer), JS. DAV, US Army Infantry, for the last 28 years. Am Legion, been there done that, and no, all my T shirts are now long (lnog) gone.

Posted February 1, 2012 at 2:37:19 PM


Army Officer (Ret)

slinger,

Since you and I probably crawled through the same mud, eaten the same cruddy chow, and both claim the same religion, I will refrain from unloading on you like I have on others regarding other topics. However, I will point out your errors.

You are doing something known in law as "Assuming facts not in evidence." Four things:

1) I have never said that I want government to promote something I deplore. I challenge you to provide a quote where I said that or to withdraw that claim if you cannot. Not prohibiting something is not the same thing as promoting it.

2) I don't get a retirement check as I retired from the Reserve Component (many years of active service during that time) and I will not be 60 years old for more than a decade. So I am not on the "Govt's teat" (sic) as you so eloquently put it. Assuming I live long enough (and assuming the money is there), I expect to start collecting the pension that I EARNED when I turn 60. That is not IN ANY SENSE a gift from the taxpayers. It is deferred compensation. Wages (even deferred ones) are not welfare. This has nothing to do with my point about government not telling people what to do with their own money anyway, so if you have a point here you certainly didn't make it very clearly.

3) I never said anything about anything being "all Bush's fault," so this statement is pointless as well. I challenge you to produce a quote from me where I said that or withdraw your statement.

4) Regarding my alleged mote: Matthew 7:3.

Posted February 1, 2012 at 3:32:45 PM


Rich Muny

America's poker players are demanding the right to play online. It's not about tax revenue. It's about our essential liberty. If you don't wish to play, don't play, but why stop your neighbors from playing poker in their own homes? The reasons listed in the article sound more like reasons some would seek to ban fast food restaurants than a rationale conservatives should embrace.

Posted February 7, 2012 at 2:19:48 PM


John

You are right, providing this freedom to adults should never be about raising revenue; it must be about providing strong consumer protections and enforcement against unregulated Internet gaming, none of which is available with the status quo. Doing nothing would be a huge mistake, and it will simply continue a failed policy of outsourcing this industry to other countries that oversee it today. Sadly, this leaves U.S. consumers unprotected and leaves us vulnerable to any of the percieved ills of gambling without any of the economic or social benefit appropriate regulation would provide. The US needs to pull its head out of the sand and provide U.S. citizens the liberty to play Internet poker on sites based in the United States.

Posted February 7, 2012 at 2:21:08 PM


Mark

Yet another big government advocate and freedom hater who doesn't even consider the issue of why he can better tell consenting adults what hobbies to pursue worth mentioning.

Just please don't ever utter the words "Land of the Free" because it just makes you a hypocrite.

Posted February 7, 2012 at 2:40:24 PM


Sajeffe

Defend our essential liberties, but to hell with the rest of our liberties? You all don't have to play if you don't want. My desire to have online poker back in the U.S. has nothing to do with tax revenues. I just want my hobby back in good form. We need FEDERAL licensing and regulation of online poker. I don't care about online lottery tickets or roulette wheels because that's pure gambling, which gives me no enjoyment. But it's not just about freedom, is it? There has to be a revenue stream somebody deems worthy.

Posted February 7, 2012 at 2:54:31 PM


Mark

At the bottom of this page is quoted with approval 'If ye love wealth better than liberty . . . go from us in peace.'

Yet you embrace an article which basically says that the question of whether American adults should be free to pursue a certain hobby that hurts no one else is based all around the question of whether the revenue (i.e. wealth) justifies it.

You folks need to make up your minds about where your priorities really are.

Posted February 8, 2012 at 12:10:28 AM


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