No more gambling for state budgets

Loveland Reporter Herald

Cash-strapped states that rely on gambling revenue increasingly are giving their residents more ways to spend more money on games of chance, according to a recent story from The Associated Press. Lawmakers apparently believe raising the stakes at lotteries, casinos and racetracks — which they hope will increase declining gambling revenues they collect — is a better option than raising taxes.

Colorado, incidentally, in February introduced its first new jackpot game, MatchPlay, in nine years. The lottery now offers Lotto, MatchPlay, Cash 5 and a slew of scratch tickets, as well as multistate Powerball tickets.

And last year, Colorado voters allowed the three towns that have casinos to increase betting limits and remain open 24 hours a day, with the promise that increased state revenues would fund community colleges.

No doubt that the state’s share of gambling revenues has done good things in Colorado. The Conservation Trust gets 40 percent of net lottery proceeds to support local parks, recreation and open space projects; 10 percent goes to state parks and outdoor rec programs; up to 50 percent goes to Great Outdoors Colorado, which “gives money to projects across the state that impact communities,” according to the lottery’s Web site. “Funds have built trails, helped open recreation facilities, preserved ranchlands and view corridors, improved and expanded river quality and access, and conserved wildlife habitat.” The GOCO fund is capped, and money above that cap goes to the Public School Capital Construction Assistance Fund.

It’s hard to imagine what the state would look like without the millions of lottery dollars spent on parks, open space, local recreation projects and schools. And every other state that allows gambling has seen similar benefits.

But the Great Recession, and an economy that continues to struggle, also has taken a toll on most Americans’ discretionary spending. And states that are increasing gambling options, undoubtedly hoping to capture more of that discretionary spending in an effort to balance budgets, might be missing the bigger picture.

Setting aside the argument that state-run gambling is essentially a regressive tax, if Americans do spend more in casinos or buy more lottery tickets, they’re not spending that money on something else, whether it’s a loaf of bread or clothing or whatever. It’s reasonable to conclude that, in many cases, increased gambling taxes or spending would decrease a state’s income elsewhere in the form of retail sales taxes. Or that money is coming from gamblers’ savings.

Gambling isn’t likely to go away any time soon. As Iowa state Rep. Kraig Paulsen, a Republican, told The Associated Press: “Absolutely we’re addicted to gambling dollars.”

States need to acknowledge that addiction and be wary of feeding it too much. States’ gambling revenues, like their residents’ income, should be seen as discretionary spending and not as an avenue to fix broken budgets.

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