Marketplace Scratch Pad

Slots or taxes?

Scott Jagow Nov 4, 2009

Apparently weary from the recession, the people of Ohio have changed their minds about slot machines. After rejecting casinos four times in the past 19 years, yesterday Ohioans voted to allow them in four cities. Smart thinking?

Some background from Reuters:

Proponents of the measure, which included Penn National Gaming, have said the casinos will create 34,000 jobs, bring $200 million in licensing fees and generate an estimated $651 million annually in revenue for cash-strapped Ohio and its local governments and school districts.

Despite that, it’s hard to see this as a “now” solution for Ohio’s economy. Penn National is building two of the casinos, and they won’t be done until 2012. But the larger question is — are states like problem gamblers? Can they never get enough? Here’s what Rob Walgate, head of an opposition group, had to say:

“Two times since 2000 we’ve expanded gambling in Ohio and we have not hit the revenue projections once,” he said, pointing to the introduction of video Keno games and the Mega-Millions lottery.

Nevertheless, states continue to pile on more forms of gambling, mainly because other states continue to pile on more forms of gambling. Ohio’s neighbor Kentucky failed to approve slots this year, but now that Ohio will has changed its mind, you can bet a few votes in Kentucky will suddenly change. One reaction in a Frankfort, Kentucky paper:

Sen. Julian Carroll, D-Frankfort, said he “detests gaming as a source of revenue,” but it’s the only option besides raising taxes.

Really? Is that true? Is gaming the only option besides raising taxes?

I found it interesting that on the same day that Ohio approved casinos, voters in Maine and Washington turned down spending limits on their state governments. And many other states approved additional spending with bond issues. More from Reuters:

Despite economic hard times, voters approved some of the biggest debt issues, according to local election offices and governments…

“Rejection of spending limits in Maine and Washington hint that voters may not be overly concerned with growth in government spending, despite a huge expansion in federal spending over the last year,” said a report by Ballotwatch, based at the University of Southern California’s Initiative & Referendum Institute.

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