Just minutes after posting today’s entry, I got a call from someone whose views I respect and who has a track record of public service.
He wanted to let me know why he views gambling as a poor economic move for the state. It offers “a false promise,” in his view. I’ll try to summarize his main points.
• Since gambling is legal in 48 of the 50 states, few visitors would come to Hawaii primarily to gamble. They can do it at home, or in places much closer to home. This means gambling will not bring in new or additional dollars.
• If it doesn’t draw new visitors who would not otherwise choose Hawaii as a vacation destination, then visitor expenditures for gambling would likely displace spending on other local goods and services. And, since gambling venues are likely to be owned and operated by companies from outside Hawaii, this would be a net drain on state revenue.
• The current situation, which requires local residents to travel to Las Vegas or other venues to gamble, with the associated travel costs, creates a form of “internal control” over how much they spend gaming. If gambling were legalized here in Hawaii, that control would be lost and those least able to afford gambling losses would be more likely to become bettors.
• At public hearings on proposed gambling legislation, few proponents appear except for paid lobbyists.
An 11-year old study of gambling in Hawaii challenged the assumption that legal gambling wouldn’t draw new visitors. It was prepared for a company promoting gaming, but it tries to put number to the potential economic impact.
It posits a modest number of new visitors drawn to gaming, as well as the capture of some expenditures by local residents who would otherwise go to Las Vegas.
Perhaps there are newer numbers, especially some that look at the current slow-down in gambling-dependent economies across the country.
My own feeling is that people who can’t really afford to gamble already have many illegal options within reach locally, with lots of existing opportunity to become problem gamblers. My friend, on the other hand, thinks that most vulnerable people are deterred by the “illegality” of gambling, but would quickly be attracted to legal gambling, raising the social costs of legalization.
I don’t know of any studies of this question. Perhaps others can come up with suggestions.
In any case, I think my friend raises substantial questions, and it would be useful to have fresh data to assess them.
You can tell that I haven’t pored over testimony on any of the gambling bills. Hopefully some of you out there can point me to the highlights.
Several years ago, I did some research on gambling by Hawai`i residents.
Each year, approximately $500,000,000 leaves the state with Hawai`i visitors going to a Nevada destination. This covers all expenses – accommodations, airfares, spending, etc.
Even assuming that three-quarters of these Hawai`i residents will want to continue to travel outside the state, the idea that an additional $125,000,000 will remain in the state sounds pretty good to me.
As for illegal gambling, it’s very difficult to verify specific figures, but according to my sources in HPD, approximately $1,ooo,ooo,ooo – that’s one billion dollars – goes into Hawai`i’s illegal gambling pots. No taxes are paid on these revenues and probably a lot of it goes out of state or even out of the country.
Never got around to checking to see if illegal gambling has a major financial & social impact in
Nevada, Mississippi/Louisiana or New Jersey, but Hawai`i’s figures are not at all pleasing to contemplate.
As for me, I want to have access to Bingo, Keno, slots, humane horse-racing, and a lottery within an easy drive – or even a brisk walk to a local 7-11 to pick up a ticket.
I am sick and tired of having The Government step in and tell people what they cannot do with their time and money when these actions do not do bad things to other people.
A reader submitted this comment to me via email:
“Your friend is correct, at least on the point of people not specifically coming to Hawaii to gamble. You cannot get in a car and drive there. The average white collar person is not drawn to the casinos. The folks to volunteer for the PTA and Friends of the Library are not ordinarily the ones you meet up with in the casinos. Unless they are going to the upscale restaurant that is NOT on the casino floor, and doesn’t have a whole lot of competition locally.
Look at it this way. Who in the community still smokes? Those are the ones you are most likely to find in the casinos. Really.”
Studies have shown that only a lottery has long term positive economic effects. Casino and other forms of gambling are long run losers. The downside of a lottery is that most of the sales are to the already poor.
Hawaii people are not going to stop traveling if a casino opens in Waikiki. People just want to get off the rock from time to time no matter what.
All in all there is really no persuasive argument for gambling in Hawaii. Most of those who are for it are from elsewhere or are paid lobbyists.
http://www.amazon.com/Hitting-Lottery-Jackpot-David-Nibert/dp/1583670130
On the gambling issue, I agree w/Manoa Kahuna that ppl travel to get off the rock; Las Vegas provides a venue that is both convenient and cheap when compared to other places IMO.
I also question the viability of casinos here because if people sit at the slots or spend time IN the casino, the money goes to that entity and isn’t going to go to elsewhere to shops or restaurants. How does that help the economy? Also, to my knowledge, casinos don’t add high paying jobs…just create more low end service types. Is that what Hawaii needs more of?
what’s wrong with just having a Lottery in Hawaii? I wouldn’t mind buying one ticket for $1 per week. What’s wrong with that?
Just don’t open the door to other forms of gambling like casinos, for instance.
i always am comforted when the churches and las vegas casino owners stand together to oppose something. it makes the issue feel more real than the other puritanical social issues the churches oppose.
How about legalizing some other stuff too… Like marijuana and prostitution? Where do we draw the line? Why do we as a society think we have the right to restrict adults from engaging in any form of consensual commerce? Where is the harm in these things? Are they really harmful or do we just perceive them as being so?
I am not opposed to gambling per se, but I am concerned about the side effects. Are we prepared for more families made homeless by parents who spend too much money on lottery tickets? Are we prepared for peripheral crime brought in by casinos?
Ian,
Two points.
1. You underestimate the volume of local, “illegal” gambling. The controls you mention about the distance to Las Vegas is not a factor concerning MOST local gamblers. Like the pakalolo business it is untaxed and greatly underestimated.
2. The visitor industry report you mention was accurate, but the bulk of visitor business would be east-bound; not from the 48 states that currently allow some form of gaming. These predictions have been proven out by the performance of new casinos built in Australia and South Korea specifically to attract Japanese and Chinese visitors.
Using MynahBlog’s reasoning, Hawaii should allow legal forms of prostitution/sex trafficking or other undesirable things as Aaron said because it’s already being done here and the gov’t is missing out on all that revenue. Really, that’s the best arguement?
I fear gambling in Hawaii and not for any religious reason — just common sense based on life experiences.
I lived in Nevada once as a editor of a tiny daily and a minimul underpaid staff. Still the gambling employees lost their food budget in the few tables in town and more than once I bailed out their kids with noninterest loans so they could get groceries.
This was a town that lived on cooper and silver mines and some limited cattle raising in the high desert. People who drove through were hunters and speculators, not gambling clients or people seeking a tinsel town show. Gambling was the major social problem for those unable to limit their activity to parlor poker. I predict gambling here would cause even greater child neglect/abuse, family split ups and human service demands we are unable to meet now.
And yes, this town had controlled prostitution and it was taxed but it was not a snare like gambling.
It’s a typical pattern that a state will introduce one form of gambling and inexorably other forms take hold.