People Against a Casino Town
News of Interest
Recession will expose state's gambling habit
 
A lottery-dependent Oregon budget insidiously weighted down by the silent impacts of its tax-immune,
social-obligation-free tribal casinos has as much chance of beating the recession odds as the
blue-haired lady pumping quarters into the slot machine has of beating the house odds

February 20, 2008
Recession will expose state’s gambling habit
By Arnold Buchman

Connecticut provides a cautionary tale as an industry-wide downturn in gambling revenues foreshadows the end of a long winning streak for Connecticut taxpayers. The two casinos, among the world’s largest, that replaced former hard-scrabble chicken farms in rural eastern Connecticut came up $10.5 million short for the month of December in their year-over-year contributions to the state’s coffers. Oregon would do well to take note.

The contributions to Connecticut’s general fund are the winnings from a deal struck twenty years ago by a shrewd governor of the state once known as the Land of Steady Habits. He was smart enough to negotiate a piece of the action from the gambling-industry sponsors of a reinvented Mashantucket Pequot tribe. In exchange for the state-tribal gambling compact required by the then recently enacted federal legislation allowing tribal gambling, the deal gives Connecticut 25 percent of the slot action at the Foxwoods Casino. Several years later, the state “doubled down” by entering into the same deal with sponsors of the resuscitated Mohegan tribe for its Mohegan Sun Casino.

The December $10.5 million shortfall was bad news for a state that today has a steady habit of dependency on its fourth largest general fund revenue source: legalized gambling. Tribal gambling, unlike casinos in Las Vegas and Atlantic City, pays no state or local taxes. At the same time, it adds to government program and services burdens. These additional burdens amplify the downward trend in Connecticut and other states where compact payments to the general fund are a significant component of the revenue fix needed to satisfy a state’s addiction to them. 
 
The general gambling downturn reflects bad news as well for every state that has become dependent on gambling whether through compact payments, state-run slots or electronic lottery games. Nationwide, as reported by USA Today, there was one slot machine in operation on January 1 for every 395 Americans. The number is growing by the tens of thousands as states scramble for more cash. California and Florida want to “compact” their way to a bigger piece of tribal casino action and Maryland wishes to have slots at its race courses. Indiana, Kansas, New York and Oklahoma will significantly increase slots this year or get them for the first time. Legislators in Massachusetts, Kentucky and Texas are clamoring to join the party.

Oregon, which lacked the foresight to negotiate Connecticut-style compacts, will not directly participate in any casino revenue downturn.  But, downturn or not, Oregon suffers a budget drag created by the societal costs of gambling and the indirect costs of tax and regulation-free competition to its tax-paying small businesses from wide-ranging, casino-funded enterprises. To boost its gambling take, Oregon’s governor introduced perniciously addictive video slot games to its lottery as the state’s reliance grows on its lottery “earnings”.

Like Connecticut, Oregon faces a national recession. But, unlike Connecticut with its albeit smaller piece-of-the-action cushion, Oregon’s revenues have been shorted by curtailment of federal timber revenues. At the same time, the federal Office of Management and Budget shows $100 million a year in federal “assistance” is going to Oregon’s cash-soaked casino tribes.

Tribal casino operators are confident they will survive the downturn. After all, casino gambling is said to be recession-resistant. But, a lottery-dependent Oregon budget insidiously weighted down by the silent impacts of its tax-immune, social-obligation-free tribal casinos has as much chance of beating the recession odds as the blue-haired lady pumping quarters into the slot machine has of beating the house odds.

Gambling revenue comes largely from the community’s poorest and most vulnerable at great social costs in addiction, bankruptcy, spousal abuse and crime. It’s time for  Oregon’s governor and legislature to own up to its lottery dependency, for Congress to revisit tribal gambling immunity and for government to readopt the steady habits that reject the fantasy that ongoing ability to meet budget responsibilities is just one more slot spin away.

(An edited version of this Guest Commentary appeared in the Register-Guard Newspaper, Eugene, Oregon, on February 4, 2008)

Related Links:
PACT   SEARCH   FACTS   LAWSUIT   LINKS   NEWS   RESEARCH   ACTION