Gambling with gambling

Twenty-four years ago, conservative columnist George Will wrote, “One state’s welfare is uniquely woven into gambling, but Nevada has an excuse: The silver was gone, the soil was lousy, and the would-be divorcees were bored. After the Comstock Lode petered out, Nevada eventually discovered divorce as a way of making money.

Nevada crushed the competition of a few other states in setting the shortest residency requirement, and then looked around for a new way to mine money from the law and found gambling. Now, one Nevada is kind of nice. But there is something sinister about more and more governments becoming more and more addicted to money from what was until recently considered a vice.”

The situation Will feared is here. Last week the Washington Post reported, “State by state, they ante up, betting on gambling taxes as the casino industry spreads to every corner of the country and most points in between. Contained to just Nevada and New Jersey a quarter-century ago, casinos now hold sway, in various forms, in 39 states.

A 40th, Massachusetts, is in the process of selecting operators to open three full-blown casinos plus a slots parlor. The holdouts, including Virginia, can now fit around a single, 10-handed poker table, if they were into that sort of thing (and if nobody invited the District of Columbia, which is also bereft of casinos). In time, though, they are likely to be playing short-handed, as more cash-strapped states yield to the promise of more jobs and new revenues without new taxes.”

One of the things that fueled the spread of gambling was California’s influential 1978 tax cutting ballot measure, Proposition 13. After its approval by voters, similar measures swept through other states, reducing tax revenues in state after state. Even in states like Nevada, where voters defeated local versions of the California measure, Proposition 13 had an impact as legislatures cut spending.

But the voters who approved all those state ballot measures did not want their services cut. When spending cuts came up, business lobbies from health care to construction and social service supporters from Medicaid to food subsidies circled the wagons.

Legislators, under pressure to both cut taxes and continue spending, began looking at gambling more favorably than before. New Jersey had already broken Nevada’s monopoly with Atlantic City casinos that opened the same year as the passage of Proposition 13. There was a cartoon in a national magazine in those years that showed two men sitting on a storefront porch in a tiny hamlet containing a half dozen buildings, one of them saying to the other something like, “We could use some prosperity here. Let’s legalize casino gambling.”

Now we have a country more or less addicted to gambling revenue. Even states without full-fledged casinos have lesser forms. And no one planned it. There was no policy decision that we would have a nation dependent on gambling for its governing. It happened incrementally, with this state and that joining the trend over time.

There is a body of thought that society needs citizens to be invested, through their taxes, in government. So what is the consequence of the public getting a larger and larger portion of their services without having to pay for them in taxes? It’s a question that probably should have been asked 40 years ago, and it may help account for the increasing detachment of the populace from government and the rise of tea party sentiment. It’s easier to demonize government when we have less of a stake in it.

It’s not that the process of gambling itself is flawed. Most states have done it well. Many states, starting with New Jersey, created better gambling regulation than Nevada, because it had Nevada from which to learn. But anticipating how to conduct gambling is a different thing than anticipating what the impact of gambling will be on how society functions. We do that a lot. When Congress forced states to abandon usury laws, no one planned for what would happen when much of the population was deep in debt to credit card companies. When the war on drugs was launched, no one considered what would happen when it created a massive illicit drug industry.

Now, we are also facing still another upshot of the spread of gambling: Glut. In October, Time magazine reported on growing concern that the United States is reaching “a saturation point, with too many casinos, in too close proximity…” One more thing for which no one planned.

Dennis Myers is an award winning journalist who has reported on Nevada’s capital, government and politics for several decades. He has also served as Nevada’s chief deputy secretary of state.