Members of the gambling crowd visited the state Capitol this week to extol the wisdom of expanding their trade to Georgia.
Legislators were pleasant enough during the hearings, asking cheery questions and nodding earnestly when gamers explained the largess that would come with their glitzy casinos.
Gambling is needed here because the wildly popular HOPE scholarship program, which helps middle-class folks like me send their kids to college on the backs of those with less, just isn’t paying off like it used to. So enter the casino and horse racing folks with a scheme to reinforce the system.
The hearings were thick on enthusiasm, thin on sober analysis, which legislators promise will come later.
I’ll give you a sneak peek of what the other side might say, but first, let’s set the way-back machine to 2009 to a dumpy convenience store in northwest Atlanta. Back then, I met a 60-year-old unemployed woman buying a $10 Extreme Green lottery ticket. The recession was at full tilt and the lady was dodging calls from those holding her car note and her mortgage. Still, there she was, scratching away at an oversized shiny piece of cardboard and losing again and again.
A few years ago, Bloomberg News created an algorithm that measured how much residents in each state spend on the lottery, what the payouts were, per capita income and some other factors. They called it the Sucker Index.
Well, you can guess where I’m going with this. We in Georgia were #1. (To be fair, Massachusetts was #2, so they weren’t picking on the South.)
In fact, I figure the whole process would have been more seamless if the lady with the scratch-off just gave me the $10 for my daughter’s tuition. We could have cut out the middle man.
Twenty years ago, when the lottery was new, Georgians would buy their Lottery tickets, pick six numbers and then wait patiently for the ping pong balls on TV to make them millionaires. But we are no longer as patient. Players want action and the consuming public has migrated to scratch-off tickets, which pay off more often, albeit in smaller chunks.
To keep Georgians scratching, the Lottery folks had to keep inventing an endless array of games with increased payouts. But bigger payouts, in turn, reduced the percentage that HOPE and pre-K programs saw.
Lottery confronts a sucker deficit
No matter how inventive our lottery folks get, they just can’t get enough suckers (AKA heavy users) to part with their money to send my kids to college. So, enter the casino folks, who hope to migrate the suckers (our own and those from other states) to Peach State gambling dens — palatial dens dressed up with palm trees, mirrors and waterfalls.
The CEO of MGM Resorts International stood before our elected officials and wooed them with billion-dollar promises, thousands of jobs and the prospect that HOPE would again be flush.
The jobs are already coming. MGM Resorts and other gambling providers are snapping up some of the state’s sharpest lobbyists to help guide the project through the Legislature next year. (It needs a two-thirds majority and then must pass a statewide referendum before local voters have a whack at it.)
To examine the other side of the casino coin, the version not yet discussed, I called David Blankenhorn, head of the New York-based Institute for American Values.
Blankenhorn said his org got onto studying casinos after looking into “thrift and the wise use of resources and that got us into gambling.”
What did his studies show?
Spoiler alert: Gambling is not thrifty, nor a good use of resources.
'I'm a free-market guy, but …'
The institute found that casinos aren’t the massive draw that proponents say they are. Most patrons come from a 70-mile radius, many of them visiting several times a month. Are casinos glamorous playpens, a la Sinatra and the Brat Pack? Nah. Forget about high rollers; casinos are seeking “middle and low rollers who play slot machines,” the study found, a lot of them problem gamblers who are slowly screwing up their lives.
True, gambling companies hire construction workers to build the casinos and then employ thousands to run them. (MGM said the average job runs in the $50,000 category.)
But the institute study found that casinos weaken nearby businesses, “extracting wealth from communities.” Gambling centers don’t like their guests sneaking off, so they have hotels, restaurants, retail shops and Wayne Newton to keep them put.
Blankenhorn laughed about the incongruity of how something once illegal is now “sold under the guise of sending little Johnny to school.”
“In the movies, the gangsters would have suitcases of money and they’d bring them to their bosses in Kansas City,” he said, referring to “Casino,” starring Robert DeNiro and Joe Peschi. “Now those suitcases of money are going to our elected officials.”
To get a sense of the economic impact, I called David Mustard, a University of Georgia economics professor who has studied such things, including the effect on crime.
“I’m a free market guy but I’ve kind of changed my mind on this,” he said.
‘The costs are less apparent to the public’
First, he said, “Gambling doesn’t create more money. You’re not creating new products or getting more productive. Gambling just transfers resources.
“If 50,000 people gave me $100 each, then I’d get $5 million. I can hire people with that but, then again, that leaves you with a lot of people not going out to dinner or to the movies or doing other activities.”
Second, in what he said was the most exhaustive study on the subject, nonviolent crime increases in counties with casinos compared to those without. True, crime sometimes dropped around casinos (as it did everywhere in the 1990s); it just dropped less fast in casino counties, he said.
Mustard has testified many times in various states and has heard the pro-gambling arguments again and again.
“The benefits are big and obvious and state legislators think, ‘We’re bringing in all this money and jobs,’ ” he said. “But the costs are less apparent to the public eye. There’s a loss of productivity, the crime, the impact on family dissolution, bankruptcies. It is certainly no silver bullet.”
