What Are the Odds That Casinos Will Ruin Some Lives?

posted by Ellen Perlman

Clinicians in Pennsylvania are getting training in a new field: gambling addiction.

Casinos began opening in the state two years ago. Compulsive gamblers surely are in those windowless establishments as we speak, losing good chunks of their salaries and/or savings.

They haven't been showing up in therapists offices in droves. But it's possible they haven't found out yet that the state will pay $65 per session for pathological gamblers who have lost everything. "I predict it will grow by leaps and bounds once they see there's funding," says Brent Olean, a licensed social worker, in a Pittsburgh Post-Gazette story.

The Pennsylvania Department of Health has approved 13 providers, who are authorized to get reimbursement for treating gamblers. Or members of their families. The department is expected to approve another two dozen soon.

It's the seamy side of gambling (or should we say seamier?), this business of states abetting compulsive gamblers by allowing in casinos. It comes up in legislative debates that focus on the revenues gambling can bring a state. And then gets accepted as the cost of doing business. And boosting budgets.

Pennsylvania is not unusual. It's typical for states to pencil in fund for gambling addiction services, knowing full well they will be needed. It's just that sometimes it's hard to watch this all unfold.

Banned Gambler Loses $10,000

posted by Alan Greenblatt

Remember the policy set up in Iowa to ban those with addiction problems from casinos? The Des Moines Register has a fascinating story about a man who is suing over $10,000 that he won at a casino, only to be recognized as a banned gambler and have his winnings confiscated.

A jury was not convinced. The casino has added the money to the more than $330,000 taken from "trespassing" gamblers for a fund to treat gambling addiction.

"Prairie Meadows doesn't benefit from this," said Tom Flynn, a Prairie Meadows attorney. "It goes to the gambler's treatment fund. It's not like we take your money and say, 'Gotcha!' "

Confrontational Speaker

posted by Josh Goodman

Charlie Crist, the governor of Florida, enjoys an approval rating around 60 percent. Marco Rubio, the speaker of the Florida House and a fellow Republican, is apparently part of the other 40.

Rubio is leading a suit against Crist, seeking to invalidate a deal the governor signed with an Indian tribe to allow expanded gambling. Rubio claims that the agreement required the legislature's approval.

But Rubio isn't merely defending legislative prerogatives. He's also clashing with the governor on global warming policy and property tax cuts.

Crist is leading the campaign for a constitutional amendment to cut property taxes, which voters will approve or reject on January 29. The cuts envisioned in Crist's amendment are large enough that some local government officials have fretted that will undermine the ability of localities to provide basic services.

Rubio, though, says Crist's plan "falls short of what we so desperately need." He is campaigning for his own constitutional amendment to cut property taxes even further. That amendment might be on the ballot in November.

Gambling Against Gambling

posted by Alan Greenblatt

I have a short piece in Governing's November issue about how the Kansas legislature this year passed a bill that will make theirs the first state to own its own casinos. Since then, I've noticed gambling is a topic of debate in a number of states. Which makes me wonder -- why?

In Maryland, Governor Martin O'Malley has called a special session on taxes and a proposal on slot machines that has been fought over in Annapolis for the last several years. In Kentucky, opposition to gambling has become the centerpiece of Governor Ernie Fletcher's flailing reelection bid.

Similar debates have occurred in recent years in Indiana, Pennsylvania, South Carolina -- you name it. The pattern is usually the same -- years of arguing ending up with the pro-gambling forces winning out.

Which makes me wonder why gambling opponents bother. I know the arguments against state-run gambling. It's a business the state shouldn't be in, there are moral qualms about it, gambling represents a regressive tax against the poor and causes serious social damage.

Yet now the biggest argument that proponents trot out is that gambling is everywhere -- so why should our state's potential revenues go to some neighboring state? That was one of the arguments used in Kansas. If Kansans are gambling anyway, why not have them do it at home?

Don't Bet on It

posted by Josh Goodman

One kooky California gambler has an idea: The state should make money off of online poker.

Anthony "Tuff Fish" Sandstrom is proposing a ballot measure that would require California to set up a state-owned poker Web site. California would make money off of it the same way casinos do, with fees to enter tournaments and by taking a small percentage of money out of every pot -- a "rake." Ninety percent of the profit would go to local governments to repair roads, while the other 10 percent would be used to fight gambling addiction.

This proposal might sound nutty. Critics will no doubt point to the social ills associated with gambling. But there's nothing inherently weirder about government being in the online poker business than the lottery business.

Some states are already allowing charities to use poker tournaments as a fundraising tool (it's more lucrative than bingo). Just think of municipal government as a charity that pays for roads.

In fact, Internet poker has one big advantage over a lottery: The state could extract revenue from an international audience. Online gambling is a $13 billion-a-year industry worldwide. If California were to grab a piece of that market, a lot of roads could be repaired at no cost to the state's residents.

However, there's a good deal of risk in this idea (but I won't call it a "gamble.").

Gambling on Lottery Privatization

posted by Josh Goodman

Today's big topic in privatization is infrastructure: toll roads, parking garages and airports. Tomorrow's, though, seems to be lottery privatization, something Indiana Governor Mitch Daniels and Illinois Governor Rod Blagojevich have proposed and Michigan's Jennifer Granholm is considering.

Infrastructure privatization has been controversial and lottery privatization will be too, but there are differences between the two. Consider how two arguments for and two arguments against the former apply (or don't) to the latter:

Pro #1: Private companies can provide more cost-effective management than government.

This is perhaps the fundamental argument for any privatization endeavor, but it was uniquely suited to some infrastructure debates. With regard to the Indiana Toll Road, Daniels could point out that the state was actually losing money on it. In other words, supporters of privatization had the advantage because there wasn't any question whether the infrastructure was being managed poorly. The debate instead boiled down to whether this was due to the inherent superiority of private control or whether the government could have been doing a better job.

That won't be true in the lottery debate. The whole reason states have pursued lotteries is that it's so easy to manage them well enough to bring in hundreds of millions of dollars, so the case for privatization is tougher.

Another pro -- and a couple cons --  after the jump. 

Lots Plot for Slots Spot

posted by Zach Patton

What do a former Pennsylvania lieutenant governor, a former county executive, a former city councilman and a former Steelers player have in common?  (Other than being defined by what they used to do.)

They -- and many others -- have all signed up to sell slot machines to the state of Pennsylvania. Under the 2004 law that allows casinos at 14 sites in the states, slot machine manufacturers aren't allowed to sell the machines directly to the state. The law demands an in-state supplier, and there's no shortage of people asking to fill that position.

Rhode Island's Gamble

posted by Josh Goodman

Rhode Island doesn't have a lot going for it. It's about 1/429th the size of Alaska. It's not actually an island. And, it was one of only two states where officials labeled their fiscal year 2006 revenue outlook as "concerned" or "pessimistic," the other being storm-ravaged Louisiana. Everywhere else, the outlook was either "stable" or "positive."

Louisiana's economic woes are understandable. But one reason for Rhode Island's downturn may be a little bit surprising.

Jesse Ventura Bodyslams Lady Luck

There are lots of respectable ways for governors to sell out once they leave office. Lobbying, for example, is lucrative and perfectly legal. But Jesse Ventura may be pushing his luck.

Ventura, among other celebrities, is now flakking for BetUS.com, an offshore online gambling site. As the NY Times notes today, Ventura may be putting himself in legal jeopardy. Online gambling may be a multi-billion dollar business--you may already have money down on this weekend's football games--but in the U.S., it's not technically legal.

Jesse tells the Times: "This is a step toward bringing something above-board that clearly many people want to partake in." A few weeks ago, he told the AP: "Bob Dole had the pills, Viagra. I prefer to endorse gaming--to each his own."

I don't know, Jesse. Sounds to me like you're lending a quasi-governmental stamp of approval to an illegal activity--one that many people find not only addictive, but financially ruinous.

Getting a Job the Hard Way

Most people peruse classified sections and send out resumes when they want a new job. Arkansas state Rep. Charles Ormond has decided to try and change his state's constitution instead.

Ormond is unable to run for re-election because of term limits. As the Arkansas Democrat-Gazette (subscription only) reported yesterday, he has proposed a constitutional amendment to create a state gambling commission. That sounds perfectly benign and reasonable, until you realize that the amendment names Ormond himself as the director of the commission. Until 2016.

Under the plan, the commission would be exempt from legislative oversight and the state's Freedom of Information Act. Also, shockingly, the commission's director is entitled to a "reasonable salary."

Ormond has to gather 80,570 signatures to get his measure on the ballot. Wouldn't it be easier to just set up some interviews?