Casinos Are a Bad Bet for Government Budgets

casino locationsWhen one considers the tough positions local and state government elected officials face with increasing costs and declining revenues, it’s easy to understand the allure of a local Casino.  This week we will look at what it actually means to local government budgets.

There is a lot of data and substantiated evidence which proves that government entities who rely upon casino revenue have budget shortages, because it is anti-economic growth, unsustainable and inadequate.

States that use gambling revenues as a “quick fix” to avoid politically difficult structural tax reforms in the short run have just kicked the can down the road and have been forced to confront the same difficult tax policy decisions in the future.

A 2009 report by the Rockefeller Institute of Government concluded that predatory gambling worsens long term budgetary problems for states.  “Income from casinos and lotteries does not tend to grow over time as rapidly as general tax revenue. Expenditures on education and other programs will generally grow more rapidly than gambling revenue over time. Thus, new gambling operations that are intended to pay for normal increases in general state spending add to, rather than ease, long-term budget imbalances.”

Here at home, a report by Wisconsin Public Research Institute shows that Wisconsin’s Casino market is already over-saturated.  There are over 18 casinos, and 4 new proposed sites, including Shullsburg and Beloit.  No one in Wisconsin has more than a 2 hour drive to get to a casino.

The national trend, which holds true for Wisconsin shows a steady decline in casino revenue.  According to a report published by the WPRI in September 2013, the Chippewa Indians experienced a drop of more than two-thirds in its casino earnings over the past few years, compared with losses of about five percent over the same period for all tribal casino earnings in Wisconsin.

One reason casinos have experienced losses is increased competition. Not long ago, casinos were limited to a Nevada and New Jersey. Today, they are everywhere, and there is rapidly growing competition from internet gambling. Internet gambling could do to tribal gaming what tribal gaming did to dog tracks in Wisconsin.

Depending upon casino revenue for a “quick fix” to budgetary issues is irresponsible at best.  As budgets continue to grow and casino revenues continue to decline, budgetary gaps will continue to increase and ultimately leave the community in a much worse predicament.