Gambling

This is a vice which is productive of every possible evil, equally injurious to the morals and health of its votaries. It is the child of avarice, the brother of inequity, and father of mischief. It has been the ruin of many worthy families; the loss of many a man's honor; and the cause of suicide…. The successful gamester pushes his good fortune till it is overtaken by a reverse; the losing gamester, in hopes of retrieving past misfortunes, goes on from bad to worse; till grown desperate, he pushes at everything; and loses his all. In a word, few gain by this abominable practice (the profit, if any, being diffused) while thousands are injured.

—George Washington in a letter to his nephew, January 15, 1783

The father of his country would be dismayed 225 years later to look upon his child. Legal lotteries in 41 states, horse racing in 43—these would have been familiar even to Washington. But the past quarter-century has seen an explosion in the availability of other forms of gambling, with full casinos legal in 10 states and on Indian lands in 16 others, card rooms in 5 states, and gambling machines (video poker, etc.) by the thousands in convenience stores and other locations in 6 states. And these are only the legal forms of gambling. Sports betting, at least 90 percent of it handled by illegal bookmakers, may run as high as $380 billion annually (the low-end estimate is closer to $80 billion). Most recently, the Internet has made all these forms of gambling available to anyone anywhere.

In assessing the impact of gambling, it is useful to distinguish between places—the neighborhoods, cities, or states where legalized gambling has taken hold—and people. After all, proponents of legalization have never argued that gambling benefits individuals, though subsequent advertising usually appeals precisely to that idea. Instead, they promote gambling as an economic enhancement to the general community. Lotteries and machines (“electronic gaming devices”) would provide money for education and other worthwhile government projects; casinos would be the core of a tourist-like industry, reducing local unemployment, bringing money to other local businesses, and generally improving the local economy. Opponents argue that casinos would also have negative effects on the area, attracting crime and perhaps other illegal commerce, like prostitution and drugs.

The results of various forms of legalization are mixed. Revenues from lotteries, even when dedicated to education, often merely allow states to cut back on other sources of revenue, thus shifting the tax burden to lottery players, who come disproportionately from the ranks of the poor, the black, and the uneducated. Lotteries function in effect as a regressive tax. Casinos, however, do reduce unemployment (though this may not hold for tribal casinos), and casino jobs are generally good jobs, better than what these employees could get otherwise. Casinos raise the value of commercial property, especially property close to the casinos, but not residential property. Particularly [Page 384]for economically depressed areas, introduction of casinos can spark community renewal, but the net effect on business is not always like that of general tourism, with local restaurants and shops flourishing. Often the revitalization affects a narrow slice of the region, as the history of Atlantic City shows. Twenty years after the glitzy casinos opened, the number of bars and restaurants had fallen by 80 percent, and many of the businesses that survive more than a few steps from the casinos are pawn shops and other downscale establishments—the gold coast and the slum, with little in between.

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