Skip to comments.Triple Lutz Report--Casinos Don't Increase Wealth
Posted on 01/14/2012 11:41:18 AM PST by appeal2
Many States are scrambling to build new casinos. They mistakenly believe that this is a surefire prescription for more tax revenue and jobs. Theyve bought into the false Las Vegas Myththat if you build it and it has a blackjack table, a roulette wheel and a craps tablethey will come. However, Vegas is looking more and more like Detroit, yet another failed US city. Do politicians believe that encouraging and subsidizing these parasitic industries is going to build wealth? As libertarians we are not against citizens starting and running gambling enterprises. Theyve been doing it since the before the Babylonians and theyre going to be doing long after were gone.
What we object to is the unholy alliance of government and big gambling. It is corrupt and it does not serve the public. Selling mega-casinos as a panacea for economic growth is completely fraudulent. The overall wealth of a society that engages in governmental sponsored gambling enterprises actually goes down. While there is an increase in taxe revenues, theres also a resulting decrease in consumer spending and an increase in social costs, which are never factored into the rigged gambling equation.
While on occasion we have unsuccessfully tested our luck at the tables, we all know that gambling is a vice that can destroy families, increase crime and harm society. Therefore, the government should stay out of it, whether its running lotteries, booking sports/horse bets or embracing casinos as a fiscal cure all.
Listen to the Report Now
Gambling is a regressive tax and impacts those who are most at risk. For a government to target such people for revenue increases is corrupt.
It is time to think of the government as the new Mafia, running numbers (excuse me Lotto & Powerball), allowing gambling if it gets its take (casinos), and now some state's are looking into taxing and regulating drugs (medical marijuana laws, decriminalization, etc.).
Yes government has much in common with organized crime.
There is so much more than revenues to the state. It is the price that those who become addicted to gambling pay.
Many lives have been ruined because the greed of the state overlooks the many who can’t stay away from the casino. An example, a man whom I knew personally, is the case of a Coast Guard officer who embezzled $1.4 million from USCG Academy funds between 2004 and 2009. His problem was gambling and his proximity to the casinos just north of New London, CT caused his demise. He committed suicide, on the Academy grounds after being confronted by authorities.
Yes, there are millions who do not become addicted but there are many thousands who ruin their lives.
All gambling does is redistribute money, it produces nothing. The only way it can generate money is to bring in money from outside the local economy. Las Vegas could bring money in , because people from all over the world would go there. But now other countries, like China, are building their own Las Vegas attractions. The other casinos in the U.S. are trying to bring in money to their city that would otherwise be spent in Las Vegas.
Gambling = A Tax on stupidity.
In practice, casinos may be good, bad or indifferent, much like anything else. Arizona is a good example.
There are many tribes in Arizona, and a lot of them are both dirt poor, and *cannot* develop economically because of a vacuum of federal business law. That is, many companies could help them, but can’t, even though the tribes want their help, because the potential liabilities are too great.
When casinos were legalized, those tribes near metro areas suddenly prospered, while the more rural tribes went bust with their casinos, for purely location reasons. So with impressive wisdom and charity, and backed by a state referendum, the newly wealthy tribes pooled their wealth for profit sharing with the poorer tribes.
But then it was like an idealized lesson in an economics textbook. Some tribes used their money poorly, some wisely, and some extraordinarily wisely.
Two wise examples were first one tribe, genetically afflicted with morbid obesity and diabetes, which bought themselves a world class diabetes clinic, that would have been impossible to afford otherwise.
Another tribe, a small tribe, made a dramatic cultural change. They decreed that their tribe now had a purpose, and all tribal members were obliged to be part of it, that all children would have as much education as they could achieve, with everyone in the tribe actively supporting them, for free. A total dedication to intellectualism and academic achievement.
How extraordinary. And all paid for with their share of casino money.
Yet compare this with the casinos not on Indian reservations, and you can see the differences. They are just corporations providing high margin, empty entertainment. A way for “rubes with too much loot” to get brain stimulation by losing their money.
And I mean that particularly, because it has been shown that gamblers get more stimulation in their brains from losing than winning.
Exactly right. Most gambling proponents argue that in a free society, people should have the opportunity to lose their money any way they wish, and government simply takes a cut in the same way they take a cut of various other enterprises through taxes and fees. But there is no new wealth creation, merely discretionary income being redistributed. Of course the problem comes when people are too stupid or addicted to realize they shoudln’t be gambling with money that is needed for other things, like feeding their kids.
Government should not be in the business of running gambling operations, it should all be done by private businesses that then pay taxes.
Anyone with a basic understanding of probability theory will find another way to dispose of their excess cash.
All gambling does is redistribute money, it produces nothing.”
And liberals are incapable of understanding capital and wealth; they only “understand” stimulus and distribution.
Much like the "Service Economy" that was palmed off on the public as to supplement to the offshoring of factories.
I suppose that is so, if you consider entertainment and fun nothing. But by your standard. Sports are nothing. Movies are nothing. Theater is nothing. Television is nothing. And on and on...
Millions of responsible people part with an amount of money they can easily afford while having a great time gambling (not me, I find it boring and/or too nerve wracking). That is something.
The horse is out of the barn on legalized casino gambling. The revenues can go to state and local government, or it can go to Indian tribes. That's the only decision to be made at this point.
Yes, there is. Entertainment is part of what constitutes wealth. People's lives are immeasurably richer, due to the entrainment options a prosperous society makes available to them. Gambling is one of those entertainment options. Millions of people have priceless memories of great times had in Vegas hotels and casinos. That's wealth by any standard, whether you approve or not. Why is that so hard to understand?
Maybe that's true, if they derive no entertainment value from gambling. If, however, the value of the entertainment derived, exceeds the house edge on the amount they plan to risk, people with an advanced understanding of probability and statistics can and do gamble, and maximize their wealth and happiness in doing so.
They CAN get rich if they use gambling to bring in more tourists...But that requires them to be the only state nearby with gambling.
Entertainment is not wealth. You must have wealth BEFORE you have entertainment, otherwise you will never have a market for entertainment.
Example: you can’t sell cadillacs and caviar to starving ethiopian refugees...and you can’t sell them trips to vegas either.
A casino is just like a government. Whatever they pay out to anyone they first must take from someone else. But, it also keeps the lion’s share of what it takes in for itself.
Then neither is a Cadillac. And neither is a bushel of soy beans. Let's say they are all goods; goods that require capital and labor to produce. They are products that may or may not exceed the value of the inputs that went into creating them. And when they do exceed the value of the inputs, that is the creation of wealth. It's silly to say that the gambling industry produces nothing. If they produce nothing, then GM produces nothing as well, because poor Ethiopians have little to trade in return for the wealth their efforts generate.
Government gambling is a tax on every industry that survives by attracting disposable income by supplying amusements; Ski hills, bars, movie theaters, legitimate theaters, pro sports, etc. etc. etc.
Just the ruling class giving its citizens another tool to remain poor and dependent.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.