The Seattle P-I’s business columnist, Bill Virgin, voices a perspective we haven’t heard too much from during the debate over I-892 (Slots for Tots.) [Gambling craze not a good bet for states]
States are making a big mistake counting on taxes on gambling to provide a stable source of revenues. And Bill points out that even as the rest of the nation has rushed to explode gambling, Nevada has been working diligently to diversify their economy.
Tim Eyman is pitching I-892 as something for nothing, a $400 million tax cut that won’t cut services. His “revenue neutral” claim is a lie, of course, that shows an understanding of economics as shallow as his ethics. It also ignores the enormous cost to state and local governments of dealing with gambling’s problems. Not to mention the incalculable toll in human misery.
But all that aside, I-892 suggests we’re sitting on top of an untapped reservoir of tax revenues, and that the more we expand gambling the less we’ll have to rely on taxpayers to fund essential government services.
Nothing could be further from the truth.
As the market approaches saturation, revenues will decline with margins, and many casinos will find themselves hard pressed to turn a profit. You can be sure that with billions of dollars in revenues and thousands of employees, casino operators will turn towards the Legislature for tax breaks to keep them in business.
Even now, one of the arguments made to legalize slot machines is that non-tribal operators can’t compete with the tribal casinos. It is not a stretch to suggest that in the near future, further demands will be made to subsidize an industry controlled by foreign and out of state interests, and which adds not a single dime of wealth to our economy.
I don’t always agree with Bill Virgin, but this one’s a no-brainer. Expanding gambling is not a good bet for Washington state.