Wednesday, October 28, 2009

Cincinnati: The Next Las Vegas?

Dear George,

At the fitness center the other day I was working out on a machine next to an elderly gentleman with a cane who I often see when I go there. Another guy walked by and asked him if he’d been to the boats recently. He said no, he’s had to hold off. The acquaintance said he thought he’d been doing very well, then asked how much he was out. The elderly man said he had been doing well, but now he was down five thousand dollars. I realized that “the boats” referred to the gambling casinos anchored on the Ohio River across the state line in Indiana. I felt sorry. Perhaps he could afford it, but $5000 struck me as a lot of money to throw away.

This was of immediate interest because Ohio voters will decide on November 3 whether or not to authorize casino gambling in the state. Casinos have been rejected by voters four times previously, but the severe state financial problems and the promise of job creation have generated increased support. Among others, the AFL-CIO, the NAACP, and the Fraternal Order of the Police have endorsed the casino proposal. Here are some of the facts.

The proposed constitutional amendment calls for authorizing four casinos in Cincinnati, Cleveland, Columbus, and Toledo with tax revenues to be distributed to 88 Ohio countries and host cities. The casino proposal is backed by Dan Gilbert, the owner of the Cleveland Cavaliers basketball team, and the owners of a Pennsylvania-based gaming company, Penn National Gaming. Gilbert and Penn National have spent $32 million on advertising to sway voters. It’s estimated that these owners would take in $1.2 billion a year in gross profits. The state of Ohio would receive $600 million in tax revenues.

Nineteen percent of Ohio adults visited an out-of-state casino at least once in a recent year. Researchers estimate that there are currently approximately 252,000 problem and pathological gamblers in Ohio (2.98% of the adult population). Projections made in connection with a previous Ohio casino ballot initiative predicted an increase of 109,000 additional adults with serious gambling addictions if casinos are opened in the state.

Problem gambling is not randomly distributed. Men (3.7%) are about twice as likely to be problem or pathological gamblers than women (1.9%). Rates are significantly higher for African Americans (5.9%) than for whites (2.4%). A major national study found that gambling addictions were highest among the poorest twenty percent of the population (5.3%) and lowest among the wealthiest twenty percent (1.8%). These data, of course, suggest that if the state uses gambling profits to increase tax revenues, they will be drawing that money disproportionately from poor people and minorities.

Gambling is associated with high social and personal costs. Compared to non-gamblers and non-problem gamblers, people with gambling addictions have higher unemployment rates, have higher debt levels, are more likely to file for personal bankruptcy protection, are more likely to have committed crimes and served time in prison, have higher suicide rates and divorce rates, higher alcoholism, higher marijuana and cocaine use, and are more subject to a wide variety of stress-related health problems (.g., ulcers, migraines, allergies, respiratory problems, nausea, clinical depression). Based on data from four recent studies, between 30% and 41% of addicted gamblers steal money or property to finance their gambling

The state of Ohio currently provides 1.6 cents yearly per problem gambler for counseling and treatment of gambling addictions. Experts recommend a 5000% increase in state mental health funding if casinos are established in Ohio.

So that’s not a very pretty picture. Curiously though, little of the above information appears in mainstream media discussions of the casino issue. Instead critics of the casino proposal focus on the state tax revenue being too low (33%), churches losing income from their own gambling ventures, hidden costs of casinos (e.g., upgrading roads and bridges), bars and restaurants losing money to casinos, and the fact that obtained tax revenues would only constitute a tiny proportion of the state budget anyway (less than 3%). A statewide poll last week found that 57% of voters favored the casino proposal, and 39% were opposed. The polls haven’t always been good predictors in the past though, so it will be interesting to see. Whatever else, I feel certain that a casino in downtown Cincinnati is not in the interest of the elderly guy at the fitness center.



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