March 9, 2014

Sidebar: State Sponsored Gambling, Then and Now

According to several articles I read in the NY Times archives from 1965 - 1967, there was a great deal of angst surrounding the question of whether to allow a lottery for education funding, as there was leading up to our falling hook, line, and sinker last November for the hype and promise of expanded casino gambling for the same purpose.

Opponents of the plan believed that it was immoral for the government to be in the gambling business, particularly for the purpose of funding education; there was also a line of thinking that lotteries would lead to more: "off-track betting, slot machines, and all other forms of gambling," according to Rochester Republican senator Thomas Laverne. He also noted that "There is very little difference, other than how you lose your money." Others opposed to the plan felt that 'infiltration by the underworld' was sure to be a consequence.

Proponents, on the other hand, felt that the State had already lost the moral high ground when they approved taxing betting at horse tracks and allowing bingo games. And, in contrast to Senator Laverne's thinking, Republican Edward Speno of Nassau County noted that
I don't think that anyone in this chamber can deny the very apparent propensity of people to gamble. This is an intelligent experiment which we as legislators cannot permit to go untried. 
Guess who was not in favor of the lottery-for-education proposal?  That would be the Board of Regents, the state's education governing board.  Here's part of their statement, from an August 1966 article, announcing their unanimous opposition:
The obligation of the State to provide adequate funds for education is so fundamental that it should not be discharged, even in part, by the encouragement of public participation in a state lottery, which will result in uncertainty as to adequate revenue available for education and in an inequitable distribution of the public burden.
We are opposed in principle to a constitutional earmarking of funds for education, or indeed for any other specific governmental service. The insertion in the Constitution of the proposed earmarking provisions would, in our opinion, lead to further similar attempts to earmark funds in other areas and in the long run might well be injurious to the advancement of education.
Additionally, we believe that attempts to support education by the lottery involve serious moral considerations and, in our opinion, are inconsistent with the goals of education.
How about that for taking a stand? And there's this impassioned statement from Senator Samuel L Greenberg of Brooklyn:
To tell the kids of our state that their teachers' salaries and their books are being paid for with the $3 that Mama spent on a lottery ticket is the wrong way to bring up children. 
Well, we know what happened after all the hand-wringing: voters went to the polls in November 1966 and saw this simply-worded amendment before them:
Shall the proposed amendment to article one, section nine, subdivision one, of the constitution, in relation to the authorization of state lotteries for the support of education in this state be approved? 
By a 3 to 2 margin, voters said yes, and slowly, off they went to the bank -- yes, the bank! -- to buy lottery tickets.  In June of 1967, there were 4,100 ticket outlets, 3,100 of which were banks. How far we've come, so to speak, that lottery outlets now outnumber bank branches in most NY neighborhoods.

The proposition we voted on was certainly in stark contrast to the ones our parents faced:
The proposed amendment to section nine article one of the constitution would allow the legislature to authorize up to seven casinos in New York State for the legislated purposes of promoting job growth, increasing aid to schools, and permitting local governments to lower property taxes through revenues produced. Shall the proposed amendment be approved?
Only a child-hating, property-tax-loving idiot would vote against that, right? Well, apparently only 43% of current voters meet that definition, because the bill passed last year.

Here's a look at what's been happening since then:

(1) Developers are starting to put packages together, and lo and behold, there's already a battle royal brewing in the Catskills. Seems that some folks think Orange County, which is much closer to New York City, and is doing much better economically than neighboring counties to the north, could be a great site for a casino...except if you're one of the counties to the north, like Sullivan, or Ulster, which have higher unemployment rates, and tons of old vacation resort properties which could use refreshing.  As gambling consultant and former Racing and Wagering Board chair John Sabini notes,
As it moves forward, there'll be no shortage of bad blood, sniping and hired guns.  It'll get ugly because the stakes are so high. People have already spent millions of their own money.
(2) Some people are already starting to spend their casino-proposition money.  For example, Onondaga County Executive Joanie Mahoney, who's now Andrew Cuomo's BFF, is going to put the county's $2.5 million share of casino revenue towards the Onondaga Lake revitalization plan. We can't have an OnSino, because we're in the Oneida Nation exclusivity area, but we'll get revenue, and won't be shy about spending it.

(3) The erosion of the middle class is having an impact on casinos. According to Goldman Sachs analyst Steven Kent
For example, luxury gambling properties like Wynn and the Venetian in Las Vegas are booming, drawing in more high rollers than regional casinos in Atlantic City, upstate New York, and Connecticut, which attract a less affluent clientele who are not betting as much.
So, regarding the destination casinos authorized last November, if we build them, will the right people even come? Or will the high rollers, the ones who can (theoretically) afford to spend money gambling, still be flying out to Vegas?

Tioga Downs (Elmira Star-Gazette photo)
(4) Consistent with the bullet above, Tioga Downs had its worst two-month slot revenue in three years. The racino, in Nichols NY, competes with a re-invigorated Mohegan Sun casino in Wilkes-Barre PA, where they have a hotel, luxury suites, and other amenities -- and where they also lost revenue on slots, as did 10 of the 11 casinos in Pennsylvania that were open this time last year.

But that's OK, because the owner of  Tioga Downs is going to compete with a handful of other bidders to be the Southern Tier's resort casino,and that will right the ship.

And speaking of casinos located just across the Empire State's borders, you just have to love comments like this one from our Sonova Governor, after he voted last year?
We literally hemorrhage people from the borders who go to casinos. I think it will keep the money in this state...
If I was a betting woman, I'd put money on those hemorrhaged people being figurative not literal, but "hey, you never know."

(5) It's worth noting that, at Tioga Downs, "it's just a game" and everyone is encouraged to play responsibly. But that lost revenue, whether it's related to the poor economy or the shrinking middle class or the poor weather or those dirty bastages in Pennsylvania and New Jersey and Connecticut and Canada and Massachusetts who are raking in money hand over fist from our hemorrhaging New Yorkers, well, that means that we'll have less money for education, right?

Is education funding really just a game? If it's really just a game, do we need the NY Lottery's ad campaign thanking us for helping the kids?

And hmm...lost revenue...that sounds a lot like the "uncertainty as to adequate revenue available for education" that the state's Board of Regents lamented back in 1966, doesn't it?

Folks, I'm torn.  Should I run out to buy a lottery ticket, or get my fanny down to Tioga Downs to play the slots? Does anyone know if they have happy, singing-and-dancing kids there?

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