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To The Tribes: What's a Gambling Monopoly Really Worth?

Category: Gambling
Posted: 11/20/11 17:47

by Dave Mindeman

There is a persistent theme developing that mixes public policy with the public perception of jobs in every way possible.

The GOP has consistently linked tax increases to job losses. Convincing us that any higher tax to business will immediately result in job losses. This idea continues despite empirical evidence to the contrary. The current business admission has been that they are sitting on piles of cash which has not led to any changes in job creation.....and one would have to assume that more tax cutting would only increase the piles.

This jobs/policy mix has been adopted by others as well. After all, it does get attention in a job starved economy. The Tribal Gaming Lobby has figured this out....

Minnesota?s 18 Indian casinos employ more than 20,000 people, making it one of the largest industries in the state. But casino operators say expanding non-Indian gaming to help pay for a Minnesota Vikings stadium means casino job cuts of 30 percent. ?7,000 people could lose their jobs over this,? said John McCarthy, the head of the Minnesota Indian Gaming Association.

The Tribal lobby has been effective with this approach. But there are several areas of argument that they leave out....

1) Tribal gaming has had racino and pull tab competition (in limited form) for quite some time. I don't think there is much evidence that these have had much direct impact on the ups and downs of their gambling revenue. What the expansion of these areas might do to tribal revenues is really an unknown, but to automatically assume it will be negative to the point of layoffs is a fair stretch. Especially when expansion would probably create new jobs to minimize that impact.

2) The whole idea behind gambling expansion is to increase state revenues without raising taxes. The Tribal gaming casinos pay no revenue to the state while the methods of gambling expansion will. And although it is granted that jobs in tribal gaming do pay income and sales taxes in regards to their societal integration, the gambling expansion jobs would do the same. It is just that expansion would have the added benefit of direct state revenue.

The larger issue here is that the Tribal Gaming community could make all of this a moot point. They really have the power to make all of this go away by voluntarily discussing a limited renegotiation of the gambling contract.

If the tribes want to maintain a monopoly, then the question becomes, "how much is it worth to them?"

If they would be willing to give a certain percentage of the proceeds directly to the state, then state investment in competition gambling might be negotiable as to scope and even existence.

When these original contracts were negotiated, the Tribes got very favorable terms. Those terms have been in place for decades. And the Tribes are certainly entitled to do what is necessary to keep their monopoly...including legal action. But wouldn't it be more beneficial to all concerned if the Tribes shared some of their state protected profits with the state....in return for additional assurances on that protection?

Before everybody spends significant dollars on lobbying to take sides on the issue, why doesn't everybody consider a solution that might benefit everybody......without a public policy fight?

Just asking.
comments (2) permalink

Re: Moral Objections to Gambling Expansion - Too Late

Category: Gambling
Posted: 11/13/11 22:22

by Dave Mindeman

I realize that gambling as a source of state revenue has its controversies. But the basic argument used by one segment of the conservative base just doesn't hold any water ....as far as I can tell....

Even so, a large and politically powerful coalition of Minnesotans oppose gambling expansion for moral reasons, saying it comes with steep social costs, such as higher crime and gambling addiction. They say it's immoral to solve the state's financial ills on the backs of those who often can least afford it.

Sorry. But I think the moral argument has long since sailed in Minnesota. The social costs of gambling are certainly present in the state. We have a lot of pretty sad stories to tell. But, unless the moral argument moves to prohibition of gambling in all forms, blocking expansion based on that argument is weak.

People who have a gambling problem have outlets everywhere. If they are intent on hurting themselves with a gambling issue, there are places to go at any time. It is hard to imagine that stopping expansion is any kind of alleviation of the problem. It's not.

Yes, it would be immoral if we tried to solve the state's ills on the backs of those with gambling problems, if that were the main source of revenue. I certainly hope we would agree that gambling should only be a small addition to state resources. We can only hope that more normal revenue sources (like taxes) will be our main source.

We have other complications to deal with when it comes to state sponsored gambling -- legal and contract wise, but in the final analysis, any kind of moral objections should have been raised and dealt with long ago.
comments (1) permalink

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