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The Hidden Costs of Casinos

By Lee Karr

Casino related costs to taxpayers, nation-wide, exceed state income from casino gambling by a ratio of $5 to $1. An earlier estimate ($2 out for $1 in) noted in a university-sponsored, peer-reviewed study, (the senior author of which provided the current numbers) had been described as conservative. The state's take from casinos is easily measured and often cited; the costs passed on to taxpayers are often subtle, confusing and more difficult to identify. The new figures reflect the inclusion of real costs not previously noted.

Casino interests, for example, often point to the casino financed salaries of state police and of state fiscal overseers. While they inspire the easily impressed with this partial truth they characteristically neglect to note that the costs of recruitment and both the costs of training as well as of pensions are typically paid for by taxpayers and that the cost of training the state personnel required often runs well into five figures per person - the pensions, often far more. Increased insurance premiums (health, business liability etc), hundreds of millions and more for infrastructure (prisons, roads, schools etc.,) and social services are but a few of the many additional down-peddled and poorly rationalized costs of casinos. And these are but the financial costs of casinos. The human costs defy quantification.

It is by such strategic omissions (and with the active complicity of politicians) that casino interests manage to pass their cumulatively enormous financial costs on to each of us. Individually, the costs are a bit like the beginning of the Death of a Thousand Cuts; cumulatively they are terribly destructive. Casino interests succeed in passing these costs on to taxpayers because most people simply aren't aware of them and therefore don't complain. They just pay them - contributing mightily to the swollen profits so characteristic of casinos. So when your state describes its take, or prospective take, from casino gambling, just multiply the number by five to learn how much must come out of taxpayer's pockets. Casinos are not the free lunch they are dressed up to be.

The following is an editorial by Lee Karr:

Upton Sinclair once wisely observed that: "It is difficult a get a man to understand something when his salary depends on his not understanding it."

This wisdom seems to apply to many of the imported construction workers who have been making their feelings concerning casinos known to legislators.

What complicates this is that, to a greater or lesser degree, the same wisdom applies to too many politicians---many of whom, including a former governor of Louisiana, are already in jail for gambling-related crimes.

It is indeed difficult, if not sometimes impossible, to remind many politicians who they represent when the sugarplums of political donations, and too often more, are dangled before their all too vulnerable eyes.

The following is an editorial by Joe Eldred that appeared in the Legislative Gazette:

Zogby’s poll numbers don’t add up, reader says

Tue, Jan 18, 2005 9:18 am

To the Editor:

While at the LOB I picked up a copy of The Legislative Gazette. I was surprised to see an article headlined “Sullivan Residents back casino jobs.” As evidence, the article cites an obscure Zogby poll of 18- to 29-year-olds. Zogby polls are notoriously unreliable. Why not cover the many more scientific polls that show Sullivan County residents overwhelmingly do not want the five casinos Gov. George E. Pataki is pushing?

Turning New York into the next Las Vegas, as Pataki wants and as the state Legislature seems poised to let him do, will increase crime, addiction and recession in Sullivan County. Every economist not bought and paid for by the gambling con-artists have demonstrated that gambling costs three dollars for every one dollar it brings into a community, and loses jobs. There has been a casino in Niagara Falls for two years with no improvement in the economy.

Joe Eldred
Central Valley

Note: John Zogby is the guy who called John Kerry the president elect, with 311 electoral votes, at 5:00 P.M. on election day. and has intimate financial dealings with the Oneida Indian Nation of New York.

Click here to read about the true costs of casino gambling to our communities in a report entitled Business Profitability versus Social Profitability: Evaluating Industries with Externalities, The Case of Casinos by Earl L. Grinols and David B. Mustard

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