In Our View: Precarious Profits
Adding slot machines at cardrooms is the wrong way to solve budget problems
Thursday, December 1, 2011
Legislators in their first week of a special session in Olympia are understandably desperate in their search for budget solutions. However, they should be careful not to let their desperation lead to foolishness.
One possible new source of revenue being pushed by some Republicans is the perfectly horrible idea of allowing slot machines and other forms of electronic gambling in nontribal casinos, or cardrooms. Currently, electronic gambling is allowed only in the state’s tribal casinos; nontribal outlets are limited to table games.
Some lawmakers argue that allowing more slot machines could yield $300 million to $400 million per biennium to a state that’s wrestling with a projected $2 billion shortfall. But here are the most compelling arguments supporting the belief that “more gambling” is a foolish fiscal strategy:
Voters hate the idea. Seven years ago, 61.5 percent of voters rejected Initiative 892, which offered a similar expansion of electronic gambling beyond tribal casinos.
Tribes hate the idea, as well, although they have yet to express any formal opposition this year. But common sense and history tell us that tribal opposition to any diversion of their slot-machine business will be ferocious and, coupled with the proven opposition from voters, would make this a fruitless pursuit of supposedly easy money. The News Tribune of Tacoma quoted state Rep. John McCoy, a Democrat from Tulalip and a member of the Tulalip tribe: “It’s simple logic that, if I’ve got to drive by a cardroom to play the device I like, why would I drive farther to get to the tribal casino?”
Gambling, clearly, is here to stay in this state, but that doesn’t mean Washingtonians should countenance unrestrained growth. When I-892 failed in 2004, there were 24 tribal casinos in the state with fewer than 16,000 slot (or similar) machines. Today, according to The News Tribune of Tacoma, 28 tribal casinos offer almost 24,000 gambling machines. Such a growth rate ought to pacify even the most ardent gambler.
Gambling revenue is notoriously unpredictable and a precarious source of money for states, which need fiscal stability. Furthermore, money spent on any expansion of slot-machine gambling could very well be money already being spent, and taxed, elsewhere. The Tacoma newspaper also quoted Professor William Thompson, a gaming industry expert at the University of Nevada at Las Vegas: “The (new, nontribal) casino money is going to come out of dining budgets; people aren’t going to go to the Walmarts and the Sears Roebucks to buy stuff that would be subject to the sales tax.”
Beware the argument that this would be a new revenue source without a tax increase. That might be so under the strictest definition, but Washington State Wire reports that a proposal from the Recreational Gaming Association (cardroom operators) would turn over to the state 35 percent of revenue from new cardroom slot machines. Call that a “piece of the action” or a “part of the profit” or any other euphemism, but it’s still a clear case of the state extracting 35 percent of new revenue from businesses. Gosh, that sure feels like a tax.
The myriad ways in which gambling deteriorates a community’s quality of life have been extensively chronicled on these editorial pages. There’s no hope of reducing gambling’s presence in our state, but feeding the monster is the wrong way to solve the state’s budget problems.