by Pete Mazzaccaro

In 1976, in what was thought to be an important measure to breathe new life into a seaside resort in serious decline, the state of New Jersey legalized gambling in Atlantic City.

The casinos appeared to do their job. Through the ’80s and into the early ’90s, tourism in Atlantic City boomed, aided by the fact that it was the only destination for legal gambling on the East Coast.

While Atlantic City tourism boomed, however, the city didn’t necessarily fare much better. The casinos provided jobs, but not ones that paid well. Crime remained a problem as did education performance. Any money made at the casinos mostly went to casino operators and shareholders, among them Donald Trump and Steve Wynn.

This year, less than 40 years after gambling was legalized, the business model seems to be taking a huge hit. A large part of that hit – no doubt – is the introduction of casino gambling in Philadelphia and Delaware. Apparently people are just as happy pulling slot levers off of I-95 as they are in a seaside hotel by the boardwalk.

This year, five of the Atlantic City’s 10 casinos have closed. More than 10,000 people – one third of the city’s casino work force – are now out of work. It’s hard to imagine that Atlantic City will end up any better off than it was in 1976. In fact, it’s not hard to imagine that it will be worse.

In Philadelphia, similar promises were made to voters who paved the way for legislation that has allowed casino developers to build gambling parlors in the city. When a local government is looking at desperate measures to fill coffers, gambling always seems like a too-good-to-be-true solution. It will fill school budget holes and relieve residents of their property tax burdens.

Again, money is being made, but much of it is not helping the city’s poor or destitute.

The local group Casino Free Philadelphia, which has tried to keep gaming out of the city, looked at Pennsylvania Gaming Control Board data for Sugar House Casino in the city and determined that Philadelphia residents lost $116 million in the casino’s first year of operation. Of the total $232 million taken in by the casino, only $11 million went to the state in taxes and fees.

The group also determined that investors made $54 million from those losses.

It’s not hard to see the pattern. In what is sold to the public as a way to bring revenue to local government, the actual result is a defunding of local gamblers’ bank accounts. We can stand back and rationalize the situation: These people would lose their money somewhere else anyway – might as well have them lose it here than in Atlantic City (this was a favorite rationalization of former Philadelphia Mayor and Pennsylvania Governor Ed Rendell).

But what of the costs? It’s too difficult, perhaps, to determine exactly what the long-range costs to the population are – from the prevention of crime related to casinos to the fallout of those who lose it all.

I’m not sure I would ever support the criminalization of gambling. At some point people need to be responsible for their own actions, and those who can gamble responsibly – if there is such a thing – should be allowed to do so.

But what we must stop doing is arguing that state-sanctioned gambling is a net gain for local government. The gains are not ours. They are all for the casinos.

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  • Mike

    Good article – we usually never agree on much of anything but you’re spot on with this. Gambling is at best a net-neutral proposition as far as society, and it realistically tends to skew more towards the worse case – a de facto “tax” on those who can least afford it. Hope the second Philly gambling license never gets issued.