Monday, October 15, 2007

Gambling: A Tax on the Poor?

Financial consultant Dave Ramsey seems to think so:

Gambling is a tax on the poor and people who can't do math. Don't get mad at me for saying that. This is not a moral position; it is a mathematical, statistical fact. Studies show that the zip codes that spend 4 times what anyone else does on lottery tickets are those in lower-income parts of town.

He cited the long lines for Powerball and Mega Millions tickets. But guess what? There isn't one single campaign anywhere to get rid of state-run lotteries. Why? Because, simply put, as revenue-raisers, they work. That's why first Bob Ehrlich, and now Martin O'Malley, are so desperate to have slots gambling put in place in Maryland, especially since West Virginia, Delaware, and (soon) Pennsylvania lure Maryland taxpayers into dropping off some of their disposable income into Little Green Men and the like. (Disclaimer: I have done so too, but never beyond my means.)

But is gambling the panacea for states' coffers? Jim Kunstler (pardon the name of his blog) doesn't buy that:

Plans are on the table all over the US for ever more casinos. In New York, campaigns are underway to put a big new one in the depressed Catskills, and another on the site of what is currently the squalid Aqueduct racetrack in the borough of Queens. We have a video-slot-machine operation here in Saratoga in what used to be a harness racing track, and every day it is filled with retirees pissing away their grandchildren's college tuition (in exchange for "excitement"). Next door in Massachusetts, new governor Deval Patrick is working tirelessly to set up casinos in the de-industrialized cities of Springfield and Brockton (and Boston, too) -- as a painless substitute for productive work. The Illinois state senate just passed a bill that would put casinos in downtown Chicago and allow additional "riverboats" along the Mississippi River -- really just barges moored in fixed locations.

And if it wasn't for tourists, no one would be hitting the Niagara Falls casinos except the down-and-out'ers. It doesn't make much sense to me or Kunstler to put casinos where the money isn't. Whereas Charles Town, WV has seen some economic impact from its ever-expanding slots parlor, the next-door town of Ranson is rather impoverished.

I don't reach quite the same conclusion as Kunstler, however. What I feel is more likely to happen is that so many casinos will open that the gambling revenue from slots will eventually become a declining source, not unlike taxing the hell out of tobacco. And it's not as though we haven't seen this happening already: remember when people used to flock to horse and dog tracks to gamble? How's that working out?

All the while, the poor will likely become poorer because they expect gambling to take them to the land of impossible dreams. Maybe Ramsey is wrong. Gambling isn't really a tax on the poor. It's a tax on the stupid.


ignorant redneck said...

I'm going with a tax on the stupid. Except for my lottery system.

My lottery syste works like this:
the odds of me winning are so poor that I might as well take the odds of me finding the winning ticket.

When I find the winning ticket, I'll have only beaten astronimical odds, the same as buying the winning ticket.

Then, when I win, I'll have spent no money.