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Posted November 27, 2001
Gaming the Busted Budget
By Jonathan Walters
It’s been said that one of the positive outcomes of the terrorist attacks in New York City is their unifying power on the home front. Well, here in New York State, that’s proved to be a mixed blessing.
Take, for example, the remarkable unity and single-mindedness of purpose shown this fall by the normally dysfunctional New York legislature. No, it wasn’t any sophisticated legislative package meant to prepare the state for potential bioterror that our legislators spent long nights working through. It wasn’t a long-range infrastructure investment package meant to rebuild Lower Manhattan.
No, in Albany, a huge portion of the newfound bipartisan capital was recently squandered on an altogether-different type of legislative purchase: gambling. Oops, I mean “gaming,” the gambling industry’s happy euphemism for when you go off to some convenience store, or casino or track to lose your shirt, socks and underwear.
Under the rallying banner of a state budget crisis in the aftermath of September 11th, the legislature pushed through long-stalled initiatives to join the multi-state “powerball” game and to significantly expand casino gambling and video slots statewide.
In other words, New York’s response to the attacks was an anti-democracy, anti-capitalist’s dream come true: Make government dependent on a shaky tax base, one that saps personal income and initiative and reinforces the message that hard work and persistence are nowhere near as important as dumb luck and a lottery ticket; that the way to gain wealth in America is through the fast score, not by creating a product or providing a service that has some value to society.
So in this case, score one for the terrorists. If their plan was to undermine America’s sense of decency, hard work and persistence in how we build our personal lives and our public institutions, they’ve found easy marks in Albany, where the gang we elected to bring strength and integrity to our government and our society is instead busily rolling the dice.
Jonathan Walters, a Governing staff correspondent, lives in upstate New York.
Readers’ Responses:
Jonathan Walters’ piece raised important questions regarding the work ethic and motives of the gambling public, and regarding the societal value of casino gambling. Please permit me to share my views on these issues.
Legalized gambling takes many forms, and there are a variety of gambling customers and gambling experiences. Our market research indicates unequivocally that casino customers view playing in a casino as an entertainment option, not as a career, an alternative to work, an investment strategy, a get-rich-quick scheme, or a way of life. And they behave accordingly: They budget the amounts of time and money that they plan to spend in a casino, and they stick to those budgets.
The typical casino customer has a household income approximately one-third higher than the national average. He or she is better educated and more likely to hold a white-collar job than the average American. According to a recent Yankelovich Monitor, casino players are significantly more likely than non-players to agree with the statement, “Doing enjoyable things and going interesting places means more to me than having a lot of prized possessions.”
The demographic profile of a typical casino player is in stark contrast to the demographic profile of a lottery player because of the different entertainment value that casinos and lotteries provide. Lotteries’ principal appeal is to low-income Americans as a way to change their lives in a significant material way.
Casinos, on the other hand, are for most people a venue for a fun night out with one’s friends. They are no more a threat to the work ethic than an evening at the theater, a supper club, or a professional sports event. While having a fair shot to win is important, the excitement, social interaction, and participation are more central to a satisfying casino experience.
That’s the casino/work ethic relationship from the perspective of casino customers. But the perspectives of the casino employee and the casino community are equally important. Throughout the United States, the casino industry has created thousands of jobs without tax breaks, subsidies, or other government largess. Additional employment opportunities translate to lower public outlays for welfare and unemployment benefits, often in depressed communities starved for private capital investment like Tunica County, Mississippi; Joliet, Illinois; East Chicago, Indiana; and scores of Indian reservations nationwide. In short, the casino industry advances the work ethic by creating private sector, career-path jobs that are the “glue” which binds strong, stable families.
The essay suggested that gamblers are afflicted with something akin to a pathology of hope. Like many who want to curtail individual liberty and personal choice in the name of compassion for the putative victims of capitalistic enterprise, Mr. Walters seems to pay scant attention to the actual sentiments of those he would protect. A few years ago, Gerri Hirshey described casino customers in the New York Times Magazine as “people of different races, incomes, playing skills and ages having a swell time rump to rump.” While “a swell time rump to rump” is a phrase apparently disfavored by my company’s market research team, one need only observe the convivial atmosphere of a typical casino and talk with casino players to doubt the authenticity of Mr. Walters’ motif of gambler-as-pathetic-victim.
Finally, anyone with at least a modicum of economics savvy would take issue with Mr. Walters’ dismissal of gambling because it fails to “creat[e] a product or provid[e] a service that has some value to society.” Just because Mr.Walters doesn’t value the experience of casino gaming doesn’t mean the value of the industry is illusory. Americans make more than 100 million visits to casinos each year. Call me a capitalist, but the last time I checked, mainstream market economists had determined that people’s willingness to work harder and longer depends on their expectations that they will be able to spend their hard-earned money the way they wish. Increased casino gambling in New York is a response to marketplace demands.
Consumer sovereignty causes the economic pie to expand, and the entertainment and recreation sectors are where consumers are choosing to spend their discretionary income. As disposable income increases, consumers tend to spend a greater proportion of their incomes on discretionary purchases such as entertainment. Casino gaming clearly satisfies some of the recreational needs of a broad segment of our society — and for that reason, it’s good for local and state economies.
Dean Hestermann
Recently in View:
The Bad-News Machine: Michael Bloomberg’s biggest challenge (posted November 19, 2001)
Now It’s ‘Our’ Government: why the attacks didn’t — and did — matter (posted November 13, 2001)
Election Reform, Now or Never: will an opportunity be missed? (posted November 7, 2001)
Issues Unchanged: the post-September 11 electoral landscape (posted November 7, 2001)
Where Is City Hall?: a small victory for the terrorists (posted October 31, 2001)
Complete index of previous columns
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