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Monday, June 29, 2009

Editorial:Playing budget games with gambling

Link: Playing budget games with gambling [Daily News]

POKER, BLACKJACK, craps, roulette and baccarat are among the table games included in a new bill that the Pennsylvania Legislature may consider soon to expand gambling across the state.

The list of games doesn't include the kind of three-card monte that lawmakers are now playing as they talk about table games as a viable solution to the $3 billion state budget crisis.

Rep. Bill DeWeese has been pushing for expanding the original legislation legalizing slots parlors to include table games almost since the original Act 71. Last week, the House Gaming Oversight Committee held an informational hearing on his House Bill 21. There may actually be some rational arguments for including such games; for one thing, the audience for such games tend to be more diverse than those for the lower-stakes slots. But the way legislators are now talking about them - including the governor, who has so far been adamant about opposing expansion until all slots parlors in the state are open - it's clear that they see this as an easy, even inevitable, solution to the budget crisis.

But it isn't, really. For one thing, the amount of immediate money generated from table games would be limited to the license fees; even though they may be $10 million per license, that is still a small percentage of the budget hole. The actual river of money flowing to the state from the games themselves would be at least a year away. And that river will be smaller than the streams from slots; table games require actual workers, so the tax on revenues would be only 18 percent.

More critically, the gaming revenues under current law don't go to the general fund; they are limited to property-tax relief, host cities' fees, tourism and race-horse breeders. Though the current table-games bill alters the distribution of revenues so that it would go primarily for property-tax relief, DeWeese says that he would be amendable to altering the bill to include a provision for the temporary flow of money to the general fund.

This should be temporary. Though we argued recently to reapportion some slots revenues to the general fund, this requires careful deliberation. Gambling is a heavily controlled industry for a reason; it can, and does, ruin lives. If we have to accept this - and thanks to Act 71, we do - taxpayers should ultimately be the direct recipients.

We should also point out that taxpayers should have more say in this proposition; they had virtually none in the passage of Act 71.

Money talks, especially in lawmaking bodies, including ours. Gambling revenue is not money that should be allowed to talk directly to government. As gaming revenues take up a larger and larger percentage of the state's revenues, they will also wield larger and larger influence. And as we saw last week with a Common Cause report that detailed the big campaign contributions from the gaming industry that have gone to Pennsylvania lawmakers, that influence is already considerable.

In fact, the original gaming act is being reviewed for reform. Last week, a gaming reform bill authored by Sen. Jane Earll, R-Erie, was voted out of committee. Among other things, the bill would re-establish the prohibition on political campaign contributions from people and firms subject to the gaming act. But since this has already been struck down by the state Supreme Court, here's a better solution: The reform bill should require immediate reporting of gaming contributions to the department of State.

In fact, we'd recommend that gambling be included in a Social Impact category of laws that would require immediate reporting; that category can also include guns, tobacco and alcohol. If lawmakers insist on encouraging more of these problematic items in our lives, let us keep better track of who's paying them to do it.
Posted by Ben Waxman @ 10:04 AM  Permalink | Post a comment
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