Sucking The Life Out Of The Golden Calf
Dec 14th, 2009 by Frank Knotts
If anyone needs an example of how government can ruin anything, just by being involved in it, take a look at the state of Delaware and what it has done to the gambling industry.
The state of Delaware has been relying on revenue from gambling now for many years. First it was the lottery, we were told that it would solve many of the problems faced by our education system and that much of the money would also go to help seniors.
Well as you can assume it wasn’t enough, so we had to up the bet, and so we instituted slots betting. Again we were told that the revenue from this and the lottery would be the magic bullet that would solve the state’s budget short falls.
So that brings us to last years push to put into place sports betting. Gov. Markell and those who supported sports betting told us that if we just did this one more thing that we would reap the benefits . They even based our budget, a balanced budget I might add, on the projected revenues of sports betting. Of course those projections were based on multi-sorts , sports betting and as we all knew and now know the state was not allowed under the law to do multi-sports betting. So all we have are bets on the NFL, this has caused the projections to be much higher than the actual revenues. In fact Dover Downs and Harrington Raceway are both saying that sports betting is barely breaking even.
This brings me to the main point of this post. The two racinos, Harrington and Dover are reporting falling profits that they attribute to the fact that sports betting has been less than successful, but also to the fact that the state is taking a larger share of those profits.
Harrington Raceway & Casino has cut its dividend for the first time since it started offering slots betting back in 1996. Dover Downs is reporting a fifty percent drop in profits from last year. Both locations are blaming these losses on the state taking a greater share of the profits.
So this demonstrates how, when government is involved and continues to raise taxes, and be clear that is exactly what is happening, that they will eventually suck the life out of whatever it is that they are taxing. Be it an industry or an individual. The only thing that can stop this from happening is to cut spending.
A government cannot tax its way out of debt, it matters not whether it be a local government, a state government, or the federal government. The more the government takes from the individual or an industry the less there is to take. Every time you increase a tax you discourage people and industries from growing, after all why grow if the government will just step in and take more of your profits.
Here in Delaware, as in many states and also the nation as a whole, we don’t have a revenue problem, but a spending problem. If we would lower taxes and cut spending we would see tax revenues increase from the increase in the amount of spending that the citizens would do. Also industry and business would have more money to invest in new projects which would spur employment.
Currently we do not have a governor or a legislature that believes in the free market or in lower taxes as a way to increase revenue. What we do have is governor and a legislature that believes that by constantly increasing the amount of options for the people to gamble away their money, and to continue to increase the amount the state takes from these activities, that they can continue to spend out our tax dollars on their pet projects and their discretionary funds.
Now that we are seeing that sports betting is not the end all that it was sold to be, what next ? Well of course from the governor we will now hear that we must go the next step and implement table gambling, which I believe was the intention all along. This too will fail, due to the fact that there are only so many gambling dollars and the state will continue to increase the amount that it takes which will cause the gambling industry to be less and less profitable for the private side of it. At some point the private companies that run the gambling for the state will decide it is no longer in their interest to be involved.
So as always it is up to us the people, the citizens , the voters to arrest this behavior. We must as a state , say enough. We must find and vote for leaders who will find ways to make real and long-lasting cuts in spending and taxes. Until the people as voters do this, then the government will continue down this path of ruin of taxing and spending.
Let no man be forced by the government to discontinue the pursuits which he finds enjoyable except if they violate the rights of his neighbors. However, let not the government explicitly condone those activities which do men harm.
Sounds profound, from some founding father no doubt? Nah, it’s just the way *I* think things ought to be. People want to gamble? Fine, let them gamble in the same way we let them drink, smoke and drive race cars. It’s not the governments job to play daddy to everyone and tell them what they can and cannot do. It should instead be focused on job creation and quality of life.
Equally important, government shouldn’t be promoting those activities that ruin lives, send millions of Americans into bankruptcy every year, cheat citizens out of much needed savings and contribute to thousands of divorces across the country every year. In fact, the government purports that gambling revenues go to help seniors and children yet I contend that seniors and children are indeed the most affected classes by gambling. Ever driven by or stopped into one of our 3 wonderful casinos on a Tuesday, Thursday or Saturday? The average age is about 65 years old. Many of them no doubt are using their Social Security checks in hopes of matching the cherries. Just one more pull, this IS my lucky machine afterall. Bus loads of geriatrics are brought in from ALL over the region. The money FLOWS from the slots like water over Niagra Falls and is promptly swallowed up by an inept and below average educational system overrun by the teachers union. Children never see the increases in their educational situation as scores generally stay the same or increase/decrease only slightly but they do feel it in other areas. Studies have shown that when gambling is introduced into a state that incidents of child abuse and divorce rates sky rocket. Focus on the Family did a report on gamblings affects and found “Researchers such as T.E. Dielman, Ph.D., at the University of Michigan Medical School note “a strong relationship” between the level of gambling activity and divorce… Less than a year and a half after casinos entered Mississippi, Gulfport Judge William L. Stewart told the New York Times that he had witnessed at least 20 divorces as a result of gambling losses. The Rapid City Journal reported an increase of more than 200 divorces per year in sparsely populated South Dakota after video gambling was legalized there.” Meanwhile Delaware grants tax breaks, incentives and even low cost or FREE advertising to the racinos in exchange for a share of the profits. I dare say that Dickenson and Rodney would be beside themselves to see Delaware out promoting gambling.
That said, let’s turn and take a look at the idea of opening up table gaming and trying to strong arm more sports betting. Do we REALLY think that Atlantic City and Las Vegas will sit back and let Delaware institute these ideas? Especially A.C. who brings in tens of millions of dollars from Delaware Valley and Philadelphia residents every year? I can guarantee you folks that they will not remains silent as they did when they allowed the NCAA and NFL to fight their battles last time. It’s time as Frank says, to vote out these racino beholden clowns and put in some principled candidates who will make the right decisions and lessen governemnt involvement in the pursuit of gambling.
Econ 101- people respond to incentives.
Tax policy should be based on promoting savings, growth and investment. If you do those things, you get revenue.
Mike Protack
Mike,
I don’t mind them taxing to invest in our kids education, improve the transportation system or renovate the cityscape, provided they ACTUALLY do those things. I don’t mind them taxing for things we NEED but when I see the education department budget in the BILLIONS and the poor quality education are youth recieve I tend to get a little angry at my tax bill.
Tax policy really ought to be even more simple than your suggestion:
Taxes should be limited in scope to cover the cost of a project as needed, end when the project is completed and a last resort when private funding cannot be found.
It really doesn’t matter how the tax dollars are collected, there is still a core problem. Until we vote our corrupt, career politicians out of office; all tax dollars will continue to go to bloated, inefficient programs!
Evan, I was surprised to see you say the government “… should instead be focused on job creation….”
In my opinion, that’s a recipe for repeating the disaster we see taking place in DC. The only sector that has grown is the government. Look at the size of the state payroll. That’s what comes from “government job creation.”
Don’t you mean the golden goose?
We should lessen government involvement in everything, including gambling. However, we should not stigmatize those that support gambling. When sports betting was being discussed and debated, I heard this line of thinking frequently: “Gambling will not solve Delaware’s financial problems, and therefore it should be illegal.” Wrong. Gambling should be legal, because it is a consensual activity that does not directly violate anyone’s rights to life, liberty, or property, and therefore it is not the government’s responsibility to restrict, regulate, or outlaw the practice. The problem is not, as some would have us believe, that gambling is immoral and therefore Delaware hurts itself by sponsoring it, but simply that government is naturally inefficient, and it follows that government-regulated gambling will be no more successful than its postal service or public schools.
Personally I find gambling to be morally wrong whether it is an effective revenue generator for the state or not. When taken to its extremes, which it often is, gambling discourages thrift and industry. It thrives based on a concept of geting something for nothing, which is contrary to reality.
However, even when you cut out the the argument of morality, as Frank and others have indicated, gambling is not something our state government should be involved in and it certainly should not be creating its budget based on gambling revenues. Continuting to place our bets on gambling is a loosing proposition for Delaware. Unfortunatly, as is often the case with government, when Delaware should have been scaling back its level of involvement with gambling it doubled down instead.
Great comments guys, thank you very much. And for you anon, no I mean the Golden Calf, as when Moses came down from the mountain and found the people worshiping a Golden Calf as a false god. Delaware has elevated gambling revenue to the level of a miracle end all. It is their Golden Calf or false god.
“In my opinion, that’s a recipe for repeating the disaster we see taking place in DC. The only sector that has grown is the government. Look at the size of the state payroll. That’s what comes from “government job creation.” – freeper
You misunderstand my meaning. This is not a “grow government” statement. Government should be focused on creating Private Sector Jobs. I should have clarified. Government should be writing policy (or NOT writing policy) that helps or at least does NOT harm business.
“The problem is not, as some would have us believe, that gambling is immoral and therefore Delaware hurts itself by sponsoring it,” – Chris Slaven
The problem is that the government ought not to be sponsoring gambling period. For moral reasons, for efficiency, for PRINCIPLED reasons. So yes, the problem IS immorality, it’s also inefficiency and ineptitutde.
The golden calf wasn’t a false god, but rather god of the previous era, when Moses decended from the mount, Aries (the ram) was at the equinox, hence Moses association witht the ram or lamb. As we follow the procession of the equinoxes, couple a thousand years later we have Pisces (the fish). I wonder who around that time was associated with the symbol of a fish, fishermen, feeding with fish……
Current age is aquarius, the water bearer.
http://www.delawarerepublican.wordpress.com
for the lighter side of how bad government can be.
Mike Protack