American states are becoming more and more dependent on gambling revenue. The lure of huge tax draws in a time of economic stagnation caused many legislators to pursue new avenues. Attitudes regarding the societal ills caused by gambling have also begun to soften, according to several new studies.
Twenty-five years ago, only three states permitted legalized gambling. Today every state except Utah and Hawaii have some form of gambling which they rely on for revenues in order to avoid raising taxes. The American voters have sent a clear message that they prefer to find alternative ways of generating money for education and other public services, and legalized gambling appears to be at the forefront. New laws across the nation have led to an explosion of state-sanctioned casinos, slot machine dispersal, and regulated lotteries.
Currently, there are more than 900 casinos across the country -455 are run privately in 11 states, 406 operate on native Indian reservations in 29 states, and there are 29 racetrack casinos (known as racinos) in 11 states. An additional 9 states (Delaware, Georgia, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Ohio, and Texas) are now considering allowing the operation of casinos and/or racinos.
So how did this reversal in public opinion come about?
Well, that’s not entirely clear but it seems that more and more Americans are turning to gambling as a major form of entertainment. According to the CNHI (Community Newspaper Holdings, Inc.), American consumers now spend twice as many dollars on gambling as they do on the combined totals of movie tickets, CDs, sports events, and concerts! What this in turn means is that the gaming industry generates more than $20 billion annually in taxes and lottery revenues for state coffers.
This figure does not even include payment from Native American-run casinos, which is an enormous tax draw. One of the first things Arnold Schwarzenegger did as governor of California is negotiate a deal that would see the Native American-run casinos pay the state $1 billion in exchange for the exclusive rights to operate slot machines.
A common concern by many is the rapid expansion of unregulated internet gambling. As public approval for gambling revenue increases, some fear that the industry will spiral beyond the control of the government. Internet gambling is the fastest-growing segment of the gaming industry, with an estimated $13 billion wagered last year alone. Steps are already being taken to ensure the industry remains legitimate.
Clearly the economic problems which worsened at the beginning of the century led to the pursuit of alternative methods to generate tax money.
But now as the economy appears to be improving, the zeal with which state legislators pushed for more casinos is dissipating. Many states are running surpluses this year, however as long as expenditures for health care, education, and infrastructure remain high, there will be a need to generate revenues and, for many, the gaming industry is the most effective way to do this.
There is a worry that if states continue to promote gambling, we will encounter more serious problems of addiction and increases in crime down the road. Although there is currently no evidence to suggest that the expansion of legalized gambling has led to an increase in problematic gambling behavior, the states are cautious about the long-term effects. Many feel that if the lawmakers are going to continue to support the industry, they will need to increase their attention on the possible negative effects of gambling as well.