Thursday, 9 August 2007
Beshear's Fools Gold
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Beshear has predicted that he is going to be able to reap a whirl wind of revenue from legalized gambling and use those profits to bring about one of Kentucky's largest single expansion of state government ever.
Is this something Kentuckians should agree to? What can we learn about Casinos that have been built around the country? Let's take a look.
We know that casinos are part of the entertainment industry. They provide a form of entertainment for people who either can't do math or don't mind losing money while gaming. Why am I so harsh? Because all of the games in the casino, with the exception of poker, will cause people to lose their money. Their is no statistical way for people to make money long term of gambling. The only game that one can make money on is poker. That is because one is playing others and not the house.
What do we know about the entertainment industry? The entertainment industry exists because people have disposable income to spend. In the United States where the quality of life is excellent, the amount of disposable income is considerable and will continue to increase as long as the economy continues to grow.
Because the entertainment industry relies upon disposable income it's pool of available money is relatively fixed. (It does generate its own disposable money for people it hires, but it is not a self sustaining business). Therefore when casinos come in and generate a huge amount of revenue, it takes that revenue from the disposable income pool. In doing so, it takes away money from other avenues of entertainment available locally. Therefore a number of local bars and restaurants will be put out of business by the casinos. It will also effect charitable gaming negatively since they are all pulling from the same pool of entertainment dollars.
But since Government takes a greater percentage of money from casinos than other entertainment venues, the loss of local businesses does not have an averse effect to government funding. IE, The gain from casino gambling is greater than the loss in revenue from other businesses failing.
What about the social impact of casinos? In theory, disposable income is what drives casinos. The only problem with this theory is that gambling can be addictive for a lot of people. Those with an addiction end up spending more than is available in disposable income and end up spending money they need to live. It is these people that become a new problem for society.
Those with gambling problems end up bankrupting themselves. Marriages fall apart and more divorces occur. Once bankrupt, gamblers resort to crime to help feed their addiction. It is the amazingly similar to the problems that plague those with a drug addiction. Not only will the gamblers need to be treated for their problems, but the government will also have to provide help for the families that are impoverish by the addiction.
Therefore it is safe to say that an infusion of casinos in Kentucky will increase local crime, drive up bankruptcies and increase the divorce rate. Which in turn will increase the need for more government services. At the end of the day we can look at the balance sheet and things aren't so rosy for gambling.
While the revenue it generates can look impressive, the hidden costs in the form of lost business and social expenditures, eat up much of the casino revenue if not all of it.
That is why Fletcher has called expanded gambling fools gold. It doesn't generate a "new revenue stream" for government. It can't and won't support a major expansion of state government and it is irresponsible of Beshear to tell us it will.
The last time we had a snake oil salesman promise us fools gold, it was Wally Wilkinson. He promised us we could solve our education problems if we just had the lottery. It didn't then and there is no reason to think that expanded gambling will solve our health problems today. And to base a massive expansion of the state government on this false promise is insane.
Beshear's entire campaign is built upon a fantasy that doesn't exist in the real world. It didn't work for Wally and it won't work for Steve "The Gambler" Beshear. Kentuckians should reject Beshear's proposals for expanded government paid for by the tooth fairy. And let Kentucky continue to be handled by responsible adults who have taken real steps to tackle the states problems.
Is this something Kentuckians should agree to? What can we learn about Casinos that have been built around the country? Let's take a look.
We know that casinos are part of the entertainment industry. They provide a form of entertainment for people who either can't do math or don't mind losing money while gaming. Why am I so harsh? Because all of the games in the casino, with the exception of poker, will cause people to lose their money. Their is no statistical way for people to make money long term of gambling. The only game that one can make money on is poker. That is because one is playing others and not the house.
What do we know about the entertainment industry? The entertainment industry exists because people have disposable income to spend. In the United States where the quality of life is excellent, the amount of disposable income is considerable and will continue to increase as long as the economy continues to grow.
Because the entertainment industry relies upon disposable income it's pool of available money is relatively fixed. (It does generate its own disposable money for people it hires, but it is not a self sustaining business). Therefore when casinos come in and generate a huge amount of revenue, it takes that revenue from the disposable income pool. In doing so, it takes away money from other avenues of entertainment available locally. Therefore a number of local bars and restaurants will be put out of business by the casinos. It will also effect charitable gaming negatively since they are all pulling from the same pool of entertainment dollars.
But since Government takes a greater percentage of money from casinos than other entertainment venues, the loss of local businesses does not have an averse effect to government funding. IE, The gain from casino gambling is greater than the loss in revenue from other businesses failing.
What about the social impact of casinos? In theory, disposable income is what drives casinos. The only problem with this theory is that gambling can be addictive for a lot of people. Those with an addiction end up spending more than is available in disposable income and end up spending money they need to live. It is these people that become a new problem for society.
Those with gambling problems end up bankrupting themselves. Marriages fall apart and more divorces occur. Once bankrupt, gamblers resort to crime to help feed their addiction. It is the amazingly similar to the problems that plague those with a drug addiction. Not only will the gamblers need to be treated for their problems, but the government will also have to provide help for the families that are impoverish by the addiction.
Therefore it is safe to say that an infusion of casinos in Kentucky will increase local crime, drive up bankruptcies and increase the divorce rate. Which in turn will increase the need for more government services. At the end of the day we can look at the balance sheet and things aren't so rosy for gambling.
While the revenue it generates can look impressive, the hidden costs in the form of lost business and social expenditures, eat up much of the casino revenue if not all of it.
That is why Fletcher has called expanded gambling fools gold. It doesn't generate a "new revenue stream" for government. It can't and won't support a major expansion of state government and it is irresponsible of Beshear to tell us it will.
The last time we had a snake oil salesman promise us fools gold, it was Wally Wilkinson. He promised us we could solve our education problems if we just had the lottery. It didn't then and there is no reason to think that expanded gambling will solve our health problems today. And to base a massive expansion of the state government on this false promise is insane.
Beshear's entire campaign is built upon a fantasy that doesn't exist in the real world. It didn't work for Wally and it won't work for Steve "The Gambler" Beshear. Kentuckians should reject Beshear's proposals for expanded government paid for by the tooth fairy. And let Kentucky continue to be handled by responsible adults who have taken real steps to tackle the states problems.
Posted by at 9:50 AM in Kentucky Politics
