WASHINGTON — After decades of politically useful fiscal mismanagement, many states and localities have become little more than underfunded pension systems with a few public services attached. At last count, they owed more than $6 trillion to creditors and public employees, leaving dwindling discretionary dollars for things such as libraries, police protection and schools.
A number of states — 23 at last count — have turned to gambling as a source of revenue, essentially forming joint ventures with gaming companies to squeeze some public benefit out of a common vice. This source of government funding has the added benefit of being voluntary. No one is forced to go to a riverboat casino or to play the racetrack slots.
For a public policy innovation this large, the casino/government complex has received little scrutiny, which a new report by the Institute for American Values, “Why Casinos Matter,” seeks to remedy. It is a crash course in the political and social hazards of funding public purposes through the exploitation of human weakness.
Modern gaming is different from the traditional image of destination resorts with swimming pools and showgirls. Casinos are geographically distributed — often purposely located in communities desperate for development. They depend on commuters instead of vacationers — people who come in a few times a month, or a few times a week. Their target market is the middle and working class.
State governments, which have often been improvident in their own finances, have turned to the active encouragement of improvidence in citizens as a source of revenue. In for a pound, I guess. But it is even more disturbing than this. “Why Casinos Matter” points to studies indicating that 40 percent to 60 percent of slot-machine revenues come from problem gamblers. Would the government exploit any other disability in this manner? Would it raise revenue from brothels catering to sex addicts? Open crack houses to profit from drug addiction?
This should disturb the libertarian right. Government, in this case, is not merely permitting private, consensual behavior. It is granting monopolies and awarding regulatory advantages to favored firms. States sometimes conduct casino border wars, locating new facilities to poach revenue from their neighbors. This has little to do with limited government. It is the active, predatory state.
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