Crapped Out

Call me fearless.

I’m finally ready to enter that burning debate that has consumed post-Katrina America: Under what conditions should the thirteen Mississippi casinos wiped out by the storm be allowed to rebuild?

And you thought I’d never speak out!

First, some background. Mississippi casino gambling was legalized in the early 90’s And to keep operations limited, it was restricted to casinos that could float; and those could be only along the Gulf Coast or along the Big Muddy.

Now, some of the biggest gambling corporations are demanding that when they rebuild they be allowed to do so on dry land. And some pro-gambling lobbyists want a new law that would put a ten year freeze on any hike in the gambling tax – currently set at 12% (Nevada casinos pay about 8%).

Governor Haley Barbour, a certified GOP hack and former RNC Chairman, has been on all sides of these issues . And the pro-gambling forces are led by, well, Democrats. It’s not clear how these matters will ultimately be resolved. But it’s an almost certainty that the state will grant new concessions to the casinos -- yummy incentives far beyond the imagination of the poor sucker civilians who got their houses blown away.

Mississippi casinos contribute about $190 million or just short of 5% to the state budget—a whole lot of money. The Gulf Coast casinos provide about 14,000 jobs – most of them low paying and non-union.

These are the “benefits” derived from legalized gambling. These are the reasons why the pols will do what they can to appease the gambling interests.

What’s never toted up in these calculations are the hidden and not so hidden costs of casino gambling. What are the social costs in social services, broken families, criminal justice etc. that are incurred as a result of compulsive and problem gamblers? A lot more, by the way, then one might imagine.

Further, how much local revenue is “cannibalized” by the casinos? In other words, how many local businesses, restaurants, theaters and bowling alleys have closed because so much discretionary income has been redirected into the slot machines and gaming tables?

So whether or not the casinos are on barges or 2,000 feet inland really makes no difference and should not be at the heart of the debate.

Instead, a serious economic study of the impact of gambling is in order. As desperate as Mississippi might be to reopen the casinos, it’s not like the gambling corporations can relocate to wherever they please. The state holds a strong negotiating hand -- if it cares to really play.

Any new concessions to the casinos should be balanced with substantial corporate givebacks: increased gambling taxes; living wage guarantees for casino workers; community development projects financed by gambling profits.

Don’t count on any of this happening. You're more likely to flop a Royal Flush than to see Mississippi get tough with the gambling industry. Sprouting casinos are always the markers of failed political leadership. They signal a surrender – a lack of any will or imagination to promote economic development other than through a regressive local tax (the bottom line of legalized gambling). At best, a strip of casinos is an ugly necessary evil. Any chance offered to renegotiate the deal between their owners and the surrounding communities should always favor the latter.

 

Comments

[Daz Honey]

oooh but isn't gambling a sin? it's only not a sin if it's on a boat!

[richard lo cicero]

Mississippi and social services don't exactly go together. There is cerainly no reason to expect that the Delta, the poorest region in the country, would ever have a pro-union or pro living wage policy. Hell, they just got a suspension of Davis-Bacon for reconstruction projects. Yeah, no doubt about it - Mississippi is business friendly. Now if only California would see the light. . .

Seriously, I really don't care about gambling casinos. I might have objections but I'd feel hypocritical condemning games of chance while advocating decriminalising drugs or permitting gay marriage. While I won't say that it is true of gay marriage it is certainly true that legalisation of drugs would lead to increased social costs. Its just that those costs should be met as a price of freedom. But, yes, when faced with a place that doesn't give a damn I am troubled. So I guess I'm just another wimpy liberal. Ah, to be decisive and uncaring like most of the country!

[Woody]

This goes to the argument that a lot of people use about marijuana--people are going to smoke it anyway, so you might as well make it legal and the state can get some taxes from it. People in Mississippi are going to gamble as long as there are bookies covering southern football, casinos in nearby New Orleans, and its biggest competitor--casinos operated by Indian tribes within the state. If the state doesn't keep the casinos legal on the coast, then those Indians are going to make all the money. The casinos will be back.

[Mr. Plow]

For these casinos, what do they do? Put the casino itself on a barge, and the hotel on dry ground?

[Marc Davidson]

If government doesn't have a role in working for a better society, then what good is it? If after a proper cost-benefit analysis of casino gambling, it is determined that the net effect is negative, why should it come down on the side of the gaming industry? The reasons should be evident to us all:
1. erosion of tax revenues and shifting the burden to low and moderate income families make this type of revenue source palatable.
2. politicians in the pocket of those who profit most from gambling.

If state programs that are funded by casino taxes and lottery revenues are of value to the state, then they should be funded by taxes that are carried in a fair way by all citizens, not just by those who suffer from the sickness that is compulsive gambling. And shame on politicians, particularly Democrats, for not telling it like it is.

[Woody]

Mr. Plow asked: "For these casinos, what do they do? Put the casino itself on a barge, and the hotel on dry ground?"

Answer - Yes, except the "barges" are not exactly sea worthy and would not survive a "three hour tour." Basically, it's a sham, but meets the technical aspects of the law.

-----------------

Marc Davidson: "If state programs that are funded by casino taxes and lottery revenues are of value to the state, then they should be funded by taxes that are carried in a fair way by all citizens...."

Marc D., we agree for the most part on this. I voted against the lottery in my state, but it passed thanks to Zell Miller's efforts, and my kids got "free" college by keeping high grades. The lottery has been referred to as being for the mathematically challenged, and the school funding has been described as a program where the college tuition for white middle class kids is being paid by poor blacks (who represent a disproportionate number of people playing the lottery.)

I don't think that the state has any business going into or supporting the gambling business, particularly because of the social costs that Cooper raised; and, the state shouldn't run lotteries, which are deemed "illegal and immoral" for private citizens.

However, to replace these and other multiple sources of government revenues with a tax system that is "fair" won't happen, because "fair" can never be defined as *fair* but is defined however politicians want. Don't confuse that with the currently popular "Fair Tax" which sells books but won't happen. There are too many golden calves that would have to be sacrificed, too much power given up by politicians, and too much money lost to fraud and negligence because it would take the IRS a decade to devise systems for monitoring and compliance.

So, I think we are left only with current options for funding government. The state will continue to permit gambling and I doubt that increased taxes on it will be used to fund social costs. Therefore, expect no changes in government expenditures, either. However, we can afford to build a couple of useless quarter billion dollar bridges in Alaska, for which at least 50-250 people will benefit. Now, that's really rolling the dice with taxpayer money.

[reg]

Amen, Brother Woody !!!

[mikey]

I am old enough to remember being in grade school when California created its current state lottery. One day in class our teacher informed the class that she used the lottery funds earmarked for public schools to purchase two filing cabinets. We were instructed to go home and tell our parents about this wonderful bounty! I can't tell you what a monumental impact those filing cabinets had on my education. Couldn't have finished graduate school without them!

This idea of lotteries and tax revenues from casinos helping to support public programs is a terrible joke. The public is first lied to about the impact of these revenues and then subject to the social and economic costs of gambling enumerated by Marc. Gaming indeed!

The only coffers that grow fat are the corporations that run these operations. For the record, the CA state lottery is run by a private corporation that of course puts its own interests well above providing much needed filing cabinets for the state's classrooms.

[Marc Davidson]

What part of Woody's sentiments is reg saying "Amen" to, the misguided involvement of government in gambling, the gross misappropriation of tax money, Woody's cynicism about fair tax policy, or all of these?

[reg]

Somehow I didn't think W was registering approval of the bad stuff...and I share his cynicism about the liklihood of fair tax policy (although we'd no doubt define it differently). Sounded like W was agreeing with MD. Just seemed like a pretty good post from somebody who has a marked tendency to drive me nuts. Thus "Amen".

[Rob Grocholski]

I think the whole notion of gaming facilities for tax revenue is mostly dishonest. If a state has a need for tax revenue, then the state -- and it's citizens -- should be adults about the matter and pay for it through taxes. The motto on the federal treasury building says, "taxes are what we pay for a civilized nation" (I'm probably slightly off on exact quote.) These casinos work mostly as regressive taxes on the poor.

BTW, shouldn't an urge to blow the NEST EGG involve a complicated adventure into the Nevada desert?

[Marc Davidson]

Reg, I agree. Give credit where credit is due.

[Jim Rockford]

Sorry Woody, I believe Miller's scholarships were wise policy and politics. Mostly middle class people (of all races) take advantage of them; but to decry opportunity for white middle class kids is just IMHO wrong. When did Government start to be about denying opportunity to certain classes of people (UC essentially wants less Whites and Asians, particularly in UCI which had quotas against both in the 90's) to help other groups? Achievement based with means-testing is to my mind both fairer and better policy. People stuck in the middle and screwed over tend to react angrily and make lots of people pay. Refusal to address skyrocketing property taxes led to Prop 13. College affordability is one of these issues.

If lotteries and Casinos help there, it's better than nothing.

Broadly, I am with Marc on the futility of Casinos as engines of economic development. They are at best a means of a stealth tax rather than real development.

Take Harrah's at Canal in NOLA. That place has been a white elephant and generated for all the money put into really nothing. But then the Superdome, the Hornets arena, and various other sports boondoggles are the same thing. Cities LOSE when they put these things up.

Mississippi and Alabama are desperately poor states. Fixing them is not rocket science but requires discipline and unified policy: emphasis on education and business friendly investment, particularly infrastructure to attract higher paying jobs in manufacturing etc. That doesn't mean tax give-aways but roads, telecom, cheap power, sewage, public safety, and the like, along with generally business-friendly taxation and regulation. That doesn't mean gutting worker safety but does mean no ticky-tack regulations that in effect end up as bribes by hiring connected law firms to navigate futile regulation (such as restrictions on when shipping can take place).

[Woody]

Well, we have a problem now. It seems that the hurricane was God's judgement on gambling and sin; so, if they rebuild that will bring yet another hurricane. It's a no-winner.

The Birmingham News, 09/28/2005 http://tinyurl.com/7kjxw
Senator says storms are punishment from God

An Alabama state senator Hank Erwin said, "New Orleans and the Mississippi Gulf Coast have always been known for gambling, sin and wickedness. It is the kind of behavior that ultimately brings the judgment of God."

Now, I'm not sure why Alabama should have been hit, seeing how they voted down the lottery. I guess that some people crossed the state line to gamble in Mississippi.

But, it gets worse and is tied to the Iraq war.

"Erwin...is not alone in seeing God's wrath at work in the storms. ...Nation of Islam leader Louis Farrakhan suggested the devastation caused by Hurricane Katrina was divine punishment for the violence America had inflicted on Iraq."

Wow! This is even more proof that Bush caused the hurricane.

With a less extreme view is Samford University professor of divinity Fisher Humphreys. He said,
"There is a standard about right and wrong conduct, and God is fully aware of whether our conduct measured up to the standard or not. As to God's control of events, different believers answer the question differently. A God that is irrational and vindictive, and filled with anger - that understanding of God is not the understanding we find in Christ. We don't believe in a God that is vindictive or cruel."

But, how does he explain that Katrina caused flooding of the New Orleans Baptist Theological Seminary?

This is very complex and serious. It's clear that rebuilding the houses of sin will invite more floods, locust, frogs, and maybe volcanos.

Well, I tend to think that the hurricane was caused by the same meteorological conditions that have created hurricanes for the past ten thousand years, before there was gambling and Bush...but, you're welcome to agree with the Senator.

[richard lo cicero]

There is a quota on Whites and Asians at UCI? Been there lately Rockford? Yeah I know, a sea of Black and Brown.

[H.E.R.E. member]

Mark, thanks for throwing in that little bit about "living wage guarantees for casino workers," but how 'bout a little in-depth reporting. We all know you like to go to Vegas, and we all know you like to report on the the struggles of our country's most down-and-out workers (such as grape pickers in the Central Valley), so why not hop on down to Mississippi to see what's up with all the casino workers who've been left with neither job nor home?

Believe it or not, the workers in Tunica, MS, up in the delta near Memphis, unaffected by Katrina, have organized a union and are in negotiations for their first contract. (They got a significant assist from their sisters and brothers in Atlantic City, who pulled off a very successful strike last year against the very same companies that operate the casinos in Mississippi.) The workers down in Biloxi were in the process of doing the same before their workplaces got blown out of the water.

But your question--"Under what conditions should the thirteen Mississippi casinos wiped out by the storm be allowed to rebuild?"--is not idle speculation. The fight for economic justice in the casinos was already going on before the hurricane, and it should only ramp up now that the inequality and outright failure of the current system have been laid bare.

For that matter, why stop at the gaming industry. Now that the entire Gulf Coast economy needs to be rebuilt, let's rebuild it right, and let the Deep South be an example of justice for the rest of the country (imagine that!). I'm stuck here in LA, doing my own organizing. Why don't you go give us the play-by-play on the battle of Biloxi.

[Chesty Puller]

"costs should be met as a price of freedom."

Freedom without personal responsibility isn't freedom, it is hedonism.

[Marc Cooper]

Yo1 H.E.R.E. member thanks for checking in. Y;know I was in Biloxi at beginning of sumner at the southern gaming summit wa and as wable to talk to some people ginning up some organizing. A pretty good idea, no?? Will promise to saty on it and get down there sooner rather than later.

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[Book Publishers]

This goes to the argument that a lot of people use about marijuana--people are going to smoke it anyway, so you might as well make it legal and the state can get some taxes from it. People in Mississippi are going to gamble as long as there are bookies covering southern football, casinos in nearby New Orleans, and its biggest competitor--casinos operated by Indian tribes within the state. If the state doesn't keep the casinos legal on the coast, then those Indians are going to make all the money. The casinos will be back.