Saturday, July 2, 2011

Making a case against DC gambling

The details of DC's gambling law raise a number of issues specific to neighborhoods, many of which came out at the hearing DC's Finance Committee recently held. 

In preparing testimony, however, for it, I focused on some of the broader issues associated with gambling. I'll be writing more about neighborhood implications later. 

This is what I said before the committee: 

Had this gambling law received proper vetting an analysis it would not have passed, and here are the reasons why.

I was a daily newspaper reporter in Connecticut in the mid-1980s when the Native American tribes won approval to convert bingo halls into casinos, and that’s why I am interested in this issue as well as worried about it.

The approval of casinos on Native American lands touched off a debate in neighboring states and cities in New York and New England, which continues today. But this push to expand gambling to compete with the Native American casinos has been generally rejected by these communities.

Here are the two major reasons why: 

First, they reject gambling because it hurts local economies. It’s parasitic. Gambling acts like sponge that soaks up discretionary household dollars, money otherwise spent on local goods and services. This offsets the tax gains from casino revenue.  

And local businesses don’t support it. They have no reason to support something that competes for household budgets.  

These communities realized that by approving gambling, they were also expanding it, compounding their losses. And so they rejected it.

Second, they rejected the expansion of gambling because of its social costs, its links to crime, bankruptcy, and divorce.

A certain percentage of the population is prone to addiction, and an even larger number will simply have a problem with it.

Expanding gambling meant, quite clearly, expanding the risk pool -- the number of people potentially adversely affected.

[What’s surprising about the District’s law is that it doesn’t set aside any tax revenue to help families who may need help in coping with a spouse, or senior parent, a young adult, who develops a gambling problem. Even Nevada does that. ]

A third point is specific to the District.

The District’s law creates electronic casinos at hotels, bars and restaurants.

These facilities will expand to the neighborhoods.  And this is how it will happen.

Businesses will argue that people gambling from their home generate no additional economic benefit. But if you allow gambling facilities in neighborhoods you will create service jobs. The biggest push for gambling specific facilities will be in the poorer neighborhoods.

Neighborhoods will have legitimate questions and special concerns. How many users will these facilities support? How will they operate?

Neighborhoods may oppose this attempt to turn their neighborhoods into a Pottersville.  

This law provides no notice to the ANC of a plan to create an electronic casino. It allows the ANCs no oversight.  (UPDATE: Aug. 17 -- ANC's will now get 60 day notice to comment on proposed hot spots

Neighborhoods deserve the right to be notified, and the ability to block this expansion. It is a major flaw in this law to exclude the ANCs from a role.

In summary, it is important to realize that this is an expansion of gambling. This is not substituting what constitutes online gambling today with a government sponsored system.

The one true thing about gambling is that it destroys wealth, it doesn’t create it. It doesn’t make a community stronger, it makes it weaker.   

You have not studied the implications of this law or prepared this community for it.

The right thing to do now is to delay its implementation, and bring in independent experts who can give you a clear view of gambling’s impact on the District’s economy. You need access to people who understand gambling addiction, and can explain its dangers. You also need to bring in network security experts to assess the risks posed by D.C. Lottery’s plan to use the government’s internal network to host this system.

If these independent studies are undertaken, you will discover, as others have before you, that this plan to expand gambling creates substantial risks for the District’s economy and its people.  

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