New York, Play This Hand Very Carefully

Paul Davies, New York Daily News, 6/8/2012

Yes, casinos will create jobs and generate tax revenue for state coffers. But casinos also have some very troubling economic and social costs. In fact, a large chunk of casino revenue comes from problem and repeat gamblers.

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Subjects: Gambling, Casinos, New York

More by: Paul Davies

The collapse of Gov. Cuomo's proposed deal with a Malaysian company to build a $4 billion convention center next to its Aqueduct racino in Queens underscores the haphazard way the governor and lawmakers have gone about trying to expand gambling in New York.

It was troubling enough that Cuomo struck a deal with Genting before legislation to legalize commercial casinos was introduced, let alone approved. Any claim the deal was about building the largest convention center in the country was put to rest after Genting pulled out largely because it couldn't be guaranteed exclusive gambling rights in New York City.

Now Cuomo says he wants a gambling commission, with members appointed by himself and legislative leaders, to think all this through. He says he wants it to operate in public – being fully transparent and accountable to the taxpayers.

Don't bet on it. This much is becoming clear: When it comes casinos, money and influence seem to drive policy.

Casinos were not part of Cuomo's extensive agenda when he ran for governor in 2010. But a year later, he voiced full-throated support for casinos. Coincidentally or not, that support came after more than $2 million in contributions from casino interests to a group closely allied with the governor, according to a recent report in The New York Times.

Cuomo argues the state is already in the gambling business, so it may as well seize the economic benefit of being all in.

But the answer to gambling is not more gambling.

Yes, casinos will create jobs and generate tax revenue for state coffers. But casinos also have some very troubling economic and social costs. In fact, a large chunk of casino revenue comes from problem and repeat gamblers.

At a gambling conference in Philadelphia last year, Ron Baumann, the general manager of the Harrah's in Chester, Pa., said his customers visited an average of 4.5 times a week.

Baylor University economics Prof. Earl Grinols found that every $1 in revenue a state generates from gambling costs taxpayers $3 in social welfare, criminal justice and regulatory costs.

Casino supporters will produce different numbers.

But what's especially troubling in New York is that Cuomo and lawmakers did not even take the time to conduct an independent cost-benefit analysis before pushing forward to overturn a constitutional ban and legalize commercial casinos.

In fact, lawmakers admitted after the first late-night vote in support of casinos back in May that the number of gambling joints they proposed to add – seven – was a compromise based on no real analysis. Assemblyman Gary Pretlow (D-Westchester) quipped that seven is just "a lucky number."

This is what passes for due diligence in Albany? Changing the state Constitution should not be taken lightly. There is a reason why New York's forefathers felt compelled to prohibit gambling. Many of its ills persist today.

In fact, the National Gambling Impact Study Commission recommended in 1999 that there be a pause in any expansion of gambling to examine the overall impact. That never occurred. Instead, states have rushed into the casino business with little or no thought. This rapid expansion has many casino operators and lawmakers warning that the market is saturated.

The collapse of the Genting deal is not a time for the state to simply find new partners to build casinos. Rather, it's an ideal moment for New York to pause and conduct its own independent study that looks at the costs and benefits of adding more casinos. Lawmakers and voters should be armed with such information before deciding if casinos are really the right policy for the Empire State. After all, the main responsibility of lawmakers is to protect citizens, not implement a policy that is nothing more than a roll of the dice.

This article originally appeared here.

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