As the nation’s annual April 15th tax filing deadline nears, one reason why we are paying more taxes for less government services than we should is because of regional casinos and lotteries.
State governments have relentlessly pushed these extreme forms of gambling onto the public in a bid to collect more money.
Yet a new report this week by the Rockefeller Institute of Government at SUNY Albany confirms what is becoming obvious to most Americans: “In the long-run, the growth in state revenues from gambling activities slows or even reverses and declines.”
That means higher taxes for less services. And worse budget problems. For everyone. Except for the people who own the commercial gambling operation.
You’re paying even if you’re not playing.
Key takeaways of the report include:
1) Government-sponsored casinos and lotteries are contributing to rising inequality. According to the report: “The economics literature supports the argument that gambling activities, particularly lottery activities, are regressive in nature and attract poorer population. Therefore, gambling often leads to reduction of disposable income for low-income households, particularly at a time when their income is not growing and is even declining in real terms.”
2) In states that sponsor commercial gambling, all taxpayers—including the non-gamblers– end up paying higher taxes for less services and their states end up with worse budget problems over the long term. Taxpayers who don’t gamble are footing the bill.
3) Expansion of gambling leads to more social costs, which in turn leads to economic costs. These costs are paid by all taxpayers and not just by gamblers.
Instead of lowering the tax burden on citizens, government-sponsored gambling has proven to be a spectacular failure, worsening state fiscal woes while contributing to rising inequality of opportunity for tens of millions of Americans.