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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2009 > September > 17 > Entry
Editorial: Want to bet on Strickland’s gamble?
The New York Times recently wrote a story about states hitting a wall in the amount of money they’re raising from gambling.
The newspaper quoted an academic who could easily have been talking about Gov. Ted Strickland.
“When budgets get tight, expanding gambling always looks to lawmakers like the perfect quick-fix solution,” John Kindt, a professor of business and legal policy at the University of Illinois, told The Times. “But in the end, it so often proves to be neither quick nor a fix.”
This week was the deadline for the state’s seven racetracks to each pay $13 million toward their $65 million fee to operate slots. Only two tracks put up the money, though all seven did pay a $100,000 application fee. Lebanon Raceway was among those that didn’t write the big check.
Because of the uncertainty about whether the tracks will ever really be able to have 2,500 slots each, it’s proving difficult to get investors to put up money for the privilege of entertaining people by taking their money. Three lawsuits challenging the legality of the decision to allow “racinos” have been filed against the state.
Meanwhile, Ohioans will decide in the November election whether they want to allow one casino each in Cleveland, Columbus, Cincinnati and Toledo.
If that measure passes, that would mean more competition for the racetracks, a concern that figures into their calculation of how much money they can rake in. The risk here for Gov. Strickland is that he was counting on big money quickly rolling in — from the fees and from having half the slots operating by May. He hoped to have almost a billion dollars in new money for the current budget.
The Times story was precipitated by the fact that states are, for the first time, seeing a drop in gambling revenues. Though the economy undoubtedly has had a role in the downturn, the development raises the possibility that there’s a finite amount gamblers can or will spend. If that money is spread among a growing number of casinos, that changes the financial predictions states have been making.
According to The Times, the 12 states with casinos brought in $4.5 billion last year, a 7.4 percent drop. “Racinos” did better, bringing in $2.9 billion in taxes and fees, representing a 6.7 percent increase.
What’s telling about that latter number, though, is the proceeds fell 6.7 percent if Pennsylvania and Indiana are taken out of the equation. Their “racinos” are new, and some experts think that they’re temporarily benefiting from the novelty factor.
Resorting to gambling as an economic development strategy has always been a hoax. The jobs that are created aren’t well-paying; oftentimes they’re hard on families because so many require odd and late-night hours; if the casinos attract other businesses, those jobs typically are also relatively low-paying, too.
If, going forward, the revenue from gambling also becomes iffy, that’s even more reason to ask whether casinos are all they’re cracked up to be for governments.
Tough decisions and choices will keep coming at Ohio as it tries to feel its way on this issue. For instance, the lottery commission, which is charged with regulating gambling in Ohio, recently decided that 18-year-olds should be allowed to play the slots — opening the door even to some high school seniors.
When critics dumped on that decision, Gov. Strickland said he thought the age should be 21.
Clearly, the lottery commission sees its job as getting people to gamble, so there will be more money for the state. But decisions about how aggressively to do that present all sorts of tensions, invariably leading to some tawdry choices.
The gambling option was never as simple or as certain as it was presented. Best not to bet that Ohio has hit the jackpot.
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