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The top 10 reasons state should say no to slots

| Sunday, May 4, 2003

The more you think about legalizing slot machines at Pennsylvania race tracks the more you see the terrible economics in it. Is there still a chance of stopping this monster?

Here are 10 economic reasons the Legislature ought to say no to slots at tracks:

  • The money won't be "new," only diverted from other uses. Will tourists flock to Pennsylvania for this insipid recreation• Not likely. Most of the players will be us, and a dollar spent one way can't be spent another. Disposable income that goes down the coin trap will not go for food, clothing, health care, theater, whatever. As the tracks win, other businesses will lose.

  • Yes, more gamblers will stay in Pennsylvania and the state will skim a tax off the losses that inevitably go to the "house." But gambling will become a more convenient passtime. Low- and middle-income people, the same who dream of lottery ticket winners, will play more slots. "Regressive taxation," that's called. It will tend to push people toward lower savings levels, a closer brush with poverty risk, and greater demands on government at the other end, via welfare.

  • Powerful new special interests will influence, perhaps dominate, lawmaking. Gov. Rendell's fund-raising trip to Nevada last summer becomes the pattern for the future.

  • Other interests will fight at the "gimme" end of the tax trough. Teachers' unions want the jobs in all-day kindergartens and smaller classes (never mind a reform that might actually boost teacher performance, like the competition from vouchers). Union-dominated transit systems like PAT surely will want theirs, especially if slots bite into lottery sales.

  • All-out casino gambling in Pittsburgh and Philadelphia becomes a cinch once the moral barrier of slots legalization is breached. And who's going to spend more in future legislatures• The well-heeled gaming lobby or the churchgoing anti's?

  • Gambling's economic "multiplier" is meager. Most jobs are low-pay and raw materials purchases are practically nil. Money literally slips down a hole to the operators.

  • Gambling addicts many not be numerous, but they exist. Bringing the temptations closer to home is no favor to them or families. Credit catastrophes, divorce and suicide set up staggering costs.

  • Gambling is a turn-off to other industries. You're an executive plotting a plant. Location. Would you put employee families where kids can't wait until age 21 (maybe 18) to make their first bet, among the other pitfalls of growing up• Bet not.

  • Pennsylvania's race tracks are said to be in danger, because "our" bettors are taking their money across state lines. But these enterprises are in the business of horse racing. Isn't it their challenge to make that more of an entertainment• An owner named Bill Veeck showed it could be done with baseball a half-century ago.

  • Slots legalization is smoke and mirrors. It diverts public attention from the sort of courageous economic growth program for which the state has cried for decades. Elected officials have got to roll back one of the country's highest tax structures, most overloaded bureaucracies, and worst labor climates.

    Public employee budgets need to be cut, by billions. So far, Pennsylvania's civil servants have been able to ignore, in the private sector, the symptoms of their own high-cost malaise. They have unions of unexpected power. The unions give and get out the vote. And governors, mayors and legislators back off.

    So take a band-aid, slot machines at race tracks, and see how long it stays on.

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