"In March, the Massachusetts House of Representatives rejected a measure that looked unstoppable when it was proposed by Gov. Deval Patrick last September: the authorization of “destination casinos” across the commonwealth. The plan was for Massachusetts to sell three 10-year licenses for at least $200 million apiece and then tax the casinos’ takings at 27 percent, raking in $400 million a year. That, went the reckoning, would cover a $1.3 billion budget shortfall. Patrick was backed by The Boston Globe, big casino corporations and some trade unions. His opponent, the House speaker, Salvatore DiMasi, warned of “human devastation” and suggested that Massachusetts could aim higher. “We are the Athens of America,” DiMasi said at a St. Patrick’s Day breakfast. “Do we really want this? Do we need this casino culture?” There are now more than 500 casinos in the U.S., most of them set up over the last two decades. They account for more than half of the almost $100 billion that Americans wager every year. Cash-strapped states and cities can tap this money through taxes and fees. Kansas recently legalized gambling to better finance education (with the money of people across the state line in Kansas City, Mo.). Detroit uses its three casinos for urban renewal, Indian betting resorts in Connecticut have replaced jobs lost to military downsizing and Western tribes use gambling for development aid. Like tax cuts in the mind of a supply-sider, casinos are the answer no matter what the question. They create money out of thin air. Anyone who believes this is likely to see the battle in Massachusetts as a contest between sophisticated libertarians (Patrick) and tut-tutting prudes (DiMasi). But that is a mistake. Liberty isn’t the issue. Patrick’s conviction that you can balance the budget with blackjack and slot machines depends as much on the moral disapproval of gambling as DiMasi’s skepticism does. Consider: If a state wants to get involved in a business, why does it have to pick a vice like gambling? Why can’t it run, say, a chain of ice-cream parlors? The answer is that collecting huge fees or taxes requires huge profits. Huge profits require monopolies (or oligopolies). Yet no mainstream politician today defends monopoly on economic grounds. Someone who proposed shuttering every Ben & Jerry’s in Massachusetts in order to make way for a state ice-cream scheme would be dismissed as unhinged. The only grounds for setting up a gambling monopoly are moral ones. Patrick’s vision of billions in betting revenues relies on the folk wisdom that gambling is too dangerous and corrupting to be left to the free market." Get the Story:
Christopher Caldwell: Bad Bet (The New York Times 4/13)
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