By Bill Armistead
Politicians in Montgomery who believe an expansion of gambling is a way to collect needed funds to run state government are either uninformed or are misleading voters. They might begin doing their homework by reading an article in The Atlantic — “A Good Way to Wreck a Local Economy: Build Casinos” — written by David Frum.
As reported by Frum, “the towns and cities that turned to gambling to escape their problems may discover that they have accepted a sucker’s bet: local economies that look worse than ever, local residents tempted into new forms of self-destructive behavior and a dwindling flow of cash to show for it all.”
So why are some of our elected officials pushing an expansion of gambling as a “solution” to yet another “budget crisis”? The only winners in a state that promotes or expands gambling are the casino operators. Why would Alabama want to go down the path that has been the ruin of cities like Atlantic City?
Independent research has shown that casinos create social costs of $3 for every dollar they bring in.
The democrat minority leader in the Alabama House of Representatives, Craig Ford, D-Gadsden, cites a supposed “shortfall” in the state’s general fund budget as his reasoning for proposing two pro-gambling bills that he said would raise the revenue needed to increase spending, expand Medicaid and grow the size of state government.
Like Rahm Emanuel, President Barack Obama’s former White House chief of staff, now Chicago mayor, Craig Ford must believe: “You never want a serious crisis to go to waste.” What that really means is: Let’s create and exploit the appearance of a crisis to enact a liberal agenda that sensible people would never otherwise support.
‘Compact’ deal
One of Ford’s proposals is to negotiate a deal — called a “compact” — giving new rights to the Poarch Band of Creek Indians to offer full-blown Las Vegas-style gambling at their casinos in Atmore, Wetumpka and Montgomery in exchange for a share of the gambling revenues. Right now those casinos only operate so-called “electronic bingo” slot machines. Under Ford’s proposal, they would add table games and card games like roulette, craps and blackjack.
The sales pitch is that casinos create jobs and would keep more money in Alabama rather than “losing it” to neighboring states with lotteries or casinos. That’s nothing but snake oil of course. Economists know that more and bigger casinos do not actually generate net job growth or positive economic activity. In fact as Frum states, casinos wreck local economies.
According to numerous studies, low-wage casino jobs typically come at the expense of other jobs lost as surrounding businesses and restaurants go under. For example within just four years of casinos being built in Atlantic City, one-third of the city’s retail businesses had closed.
And because gambling is a zero-sum game (meaning there is no economic output) the notion of “keeping the money in Alabama” is pure fallacy. Whether you gamble in Alabama, Mississippi or Las Vegas the money you lose simply goes into the pockets of the casino owners and the slot machine manufacturers. Gambling redistributes wealth in a community; it doesn’t create it.
Regrettably many in Montgomery seem eager to enact Ford’s plan to expand gambling at American Indian casinos. But it’s a very bad idea for several reasons.
Pending litigation
First the state’s official position in pending litigation is that the Poarch Creeks are already violating both state and federal law at their casinos. A federal judge threw the case out, ruling that the federal government has seized jurisdiction over Poarch Creek lands from the state. But Attorney General Luther Strange has appealed, determined to fight the President Obama Justice Department and defend Alabama’s state sovereignty from yet another federal encroachment.
The Legislature should not sabotage the attorney general’s efforts by cutting a deal with the Poarch Creeks before the court rules. Alabamians, not the federal government, should decide the gambling laws in Alabama.
Second if new revenue to avert a budget crisis is really the objective of a compact, politicians in Montgomery apparently haven’t thought through this thing. A compact to expand American Indian gambling would require a constitutional amendment. Even if it passes the Legislature, which is anything but assured, it likely wouldn’t go to a vote of the people before the 2016 general election. Therefore Ford’s bill couldn’t possibly “solve” a budget crisis anytime soon. Maybe that’s why Ford himself has admitted a compact wouldn’t solve the general fund budget problem at all.
Finally the last thing we need in the Legislature is another fight with gambling interests that takes up time that could be spent on coming up with “real” solutions to budget issues. If the casino “can of worms” is opened you can bet the halls of the Statehouse will be swarming with more casino lobbyists than you can shake a stick at. It also would invite bribes and corruption of the kind the Federal Bureau of Investigation investigated a few years ago.
EDITOR’S NOTE — Bill Armistead is chairman of the Alabama Republican Party and a former state senator.
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