Posted on 09/09/2014 7:20:39 AM PDT by Kaslin
For those who promote legalized gambling as a means of economic development or revitalization, or as a painless way to pay for public schools, the recent news from Atlantic City, New Jersey, is sobering.
Dominated by its famous boardwalk, the beach resort is familiar to Americans from the popular game of Monopoly, the Miss America pageant and the Democratic Convention that nominated Lyndon B. Johnson for president. Almost 40 years ago, when casino gambling was prohibited by every state except Nevada, New Jersey voters succumbed to a slick campaign that promised to remake the fading resort into Las Vegas East.
For awhile it seemed to work, as people from all over the Northeast rode buses to Atlantic City to sit for hours in front of mesmerizing slot machines. But casino revenues have fallen steadily to where they were 25 years ago, and this year four of Atlantic City's 11 casinos closed their doors, with a fifth expected to follow soon.
The closed casinos have eliminated 8,000 jobs in a city whose unemployment rate was already twice the national average, and the assessed value of the unoccupied properties will have to be sharply reduced. And no property was bigger or fell harder than the gargantuan Revel Casino Hotel, which was custom designed for high rollers who never showed up.
What can be done with a 57-story, hermetically sealed glass building with 1,400 hotel rooms and 10 swimming pools occupying 20 acres on the boardwalk? When it filed for bankruptcy a second time last month, the owners declared the value of the property was worth less than 20 percent of what it cost, telling the bankruptcy judge that the casino is "a melting ice cube."
The $2.4 billion it cost to construct that now-useless "glass elephant" was greater than the taxes New Jersey collected from all the other casinos in the past eight years. New Jersey Gov. Chris Christie had the chance to pull the plug on the project four years ago, but instead he doubled down, committing $261 million of state funds to see it through to completion.
Atlantic City parallels what happened in Alton, Illinois, where my husband and I lived for 44 years raising our six children. A riverboat casino was touted as the new "services" economy to replace the manufacturing plants that once supported over 10,000 families there.
After the politically connected original investors cashed in their chips a decade ago, Alton's casino steadily declined to about half of its original revenue. Along the way, a local family-owned business was devastated when a trusted employee embezzled over $100,000 to support her gambling losses "on the boat," as people still say although the so-called boat never leaves the dock anymore.
While Christie was bailing out the soon-to-collapse Revel Casino, he also committed New Jersey to enter the untested field of Internet gambling, which enables people to lose their life's savings in one fit of depression, without even leaving their office or home. Internet betting preys on the compulsive gambler because it invites him to feed his habit in secret, without criticism by family or friends.
Gambling over the Internet was deemed illegal based on a 1961 law called the Wire Act. As recently as 2007, the FBI was warning Americans that it is against the law to gamble over the Internet, and the operators of online virtual casinos were prosecuted.
But in another example of the Obama administration changing a law without congressional approval, its Department of Justice surprisingly announced just before Christmas 2011 that many forms of Internet gambling are legal after all. Obama's DOJ declared that the Wire Act prohibited sports betting, but implied that other forms of gambling (such as online poker) may not be considered illegal under the Wire Act.
At that time -- nearly three years ago -- the size of online gambling was estimated to be already immense, between $6 billion to $100 billion a year. Chris Christie obviously salivated at the prospect of collecting a share of that money for New Jersey, projecting $180 million the first year -- almost as much as the state now takes in from casinos.
But the state's actual revenue from Internet gambling this year was only a little over $9 million, which is 95 percent less than Christie expected. Meanwhile, more conservative states (such as Texas) have held the line against gambling expansions.
The lesson of New Jersey should not be lost on Republicans who are vetting potential presidential candidates for 2016. Some of the Republican "donor class" may be considering Chris Christie, who is not a conservative, as someone who could control the federal budget after eight years of Obama's deficit spending.
Like the liberal Republicans who are currently running for governor of two other blue states, California and Illinois, Christie offers himself as a non-ideological pragmatist who can manage the state's finances. The catastrophe of Christie's bad bet on gambling, both virtual and bricks-and-mortar, proves yet again that there simply is no such thing as a viable "social liberal, fiscal conservative."
I am no psychiatrist, but I have heard gambling isn’t too easy to treat.
The morons here in NYS are pinning their hopes on it for an upstate recovery instead of allowing Fracking that could support tens of thousands of middle class jobs.
Mustn’t let anyone get off public assistance now.
Gov. Cue ball is crowing about creating 500K new jobs during his tenure. Yeah, all ObamaCare part time positions that were once full time.
The House always and I mean always wins...
However I have no problem with people gifting the gullible out of their money.
Remember NYC OTB...? they lost money running a bookmaking operation..
We have to get back to the fundamentals in rebuilding the economy. Not thinking that a flash in the pan such as legalized gambling will solve an area”s economic problems, or fill the state’s tax coffers.
That’s a happy kitty photo.
[ We have to get back to the fundamentals in rebuilding the economy. Not thinking that a flash in the pan such as legalized gambling will solve an area”s economic problems, or fill the state’s tax coffers. ]
Gambling is a lot like a government job, hundreds of people hired to move money from one place to another while each station gets their tiny bit of a share... However it produces nothing of real value, just like the government...
I have sometimes thought it strange how things changed. At one time gambling was considered immoral and socially destructive, which is why most forms of it were illegal in many places. There was Vegas, of course, once known, probably with some justification considering that it was originally founded and run by the mob, as Sin City.
And then we started to have legalized lotteries of various sorts. And then, in my area, the government decided to cash in on gambling by permitting VLTs (video lotto terminals - multi-game video slot machines) to go into all sorts of locations - bars, restaurants, convenience stores, pizza joints, pool halls, pretty much anywhere you wanted. Eventually they decided that this provided unwanted access to the machines to minors so they restricted them to bars.
Anyway, I just find it interesting how for a lot time gambling was generally viewed as a disreputable (or shameful) and immoral activity, and then the government decided it needed the money and legalized, and suddenly it was if there was nothing wrong with gambling at all, since the government approved.
Yeah. Now they need to legalize whorehouses and drugs to generate the tax revenue to replace that lost from gambling. < / sarcasm >
Gambling creates nothing. It’s a black hole that sucks money out of communities. Think of it as reverse wealth redistribution.
Even the jobs it creates becomes problematic as it introduces graft, extortion and bribery to get some of those lucrative dealer or cocktail waitress jobs.
Gambling is a sign of a society that has too much wealth wasting away. They shouldn’t ban it, but it should be highly regulated with limited accessibility. A casino should always be a planned destination, not an impulse stop because you’ve driven by one.
Detroit has several casinos.
Porkus Christi threw $261 million of taxpayers funds into it because it was never going to open otherwise. It should be considered a criminal offense in my mind.
Gambling is a luxury. When things are tough, many stop it. Some won’t, but that isn’t where the majority of the money is made.
Here on the Mississippi between Iowa and Illinois, we have four casinos. They are losing money, and that is with huge tax breaks. Long term, at least two of them are going under, because every town of any size has at least one casino.
Back in the day when Vegas and Atlantic City was all there was for real casino gambling they could be assured of tourist dollars. Today it is everywhere and nobody has to go to AC or Vegas to gamble.
If your customers aren’t from out of state, your just moving revenue from sales tax on something else to lottery/casino, not generating more overall.
There is a large group on FR that want to do just that.
However, like CO is now experiencing, it is hard to make people pay more for a legal drug than they were when it was illegal. Tax revenues are up, but not at near the rate they expected.
I know a family where the oldest brother just pled guilty to stealing 250.000 from his mother, all for gambling. He’s broke awaiting sentencing, ripped up the family, some want him in jail, the mother doesn’t.
Gambling turned them all upside down
I know of one substantial payoff from gambling, but it’s an odd one.
The tribes in Arizona were allowed to build casinos on their lands. But as with other businesses, location is everything, and some were very profitable, and others failed.
But then something unusual happened. The tribes with successful casinos agreed to a wealth sharing agreement with the other tribes. And this was backed with both tribal and statewide referendum.
Each tribe had its own spending priorities with their portion of the money. For example, one tribe, with terrible, endemic diabetes, built and runs a state-of-the-art diabetes clinic.
But another tribe was the real oddity. A very small tribe of only a few hundred people, it decided to commit all its funding to education. Along with the money, was a complete, cultural dedication to education. So any tribal member can get free schooling, from primary through a PhD if they can and want. And everybody in the tribe is expected to help them get educated in any way they can. To encourage them to push themselves, to tutor them, to laud them for their success, and to hold teachers in high esteem.
The brilliance of this scheme cannot be underestimated. And while they are not a rich people, they will likely get enormous dividends from this philosophy.
Before, they were likely on the path to extinction. But now the future is a wide open door to them. It will be very interesting to see what they have become in a hundred years.
BTTT
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