Here's an idea we aren't betting on: In an effort to fill a budget deficit projected to reach $14 billion over the next two years, New York State legislators are considering the further legalization of gambling operations throughout the state. A proposal to install as many as 20,000 Video Lottery Terminals in Off-Track Betting shops aims to contribute $2 billion to state funding. Unfortunately, the idea will not solve any problems and will end up taking money away from the people who need it most.
Gov. George Pataki and the State Assembly speaker and State Senate majority leader pledged to raise funds this year without increasing taxes. As a result, gambling income is being considered because of its simplicity and significant results. The video lottery terminal machines are much like video-based slot machines, and some OTB centers will have over 1,000 units.
Despite the attractive nature of this proposal to lawmakers, there are plenty of reasons why the State of New York should refrain from using gambling to accomplish its fiscal goals.
When gambling money enters the state coffers, it must come from a source - in this case, it will come from gamblers, who are too often individuals that are elderly or have low incomes. These gamblers often already have financial difficulties and their money is best left in their pockets.
Gamblers are lured by the false hope of winnings, but the No. 1 rule of gambling applies - The house always wins. Legislators may claim they are helping the economy, but in times of economic trouble it is the very people whom VLT operations will be targeting that need to the most help.
Economically, the VLTs will cause more problems than they solve. Gambling expenditures cannot be taxed, but money not spent on gambling can be spent on products that are taxed, creating revenue for the state.
Proponents of gambling often point to tourism-related benefits, but in this situation, it does not seem possible. Tourism is usually associated with glitzy, attractive and youthful imagery - OTB is none of these things. No one will drive to New York just to play video slot machines. If New York truly intends to generate more revenue in tourism, legislators should endorse programs that more specifically target travelers.
If legislators did not pledge not to raise taxes, they would not be this position. New York State should be able to come up with an honest solution that does not rely on exploiting the poor and elderly, especially when they are the ones hit hardest by the budget shortfall. It is good to see legislators taking innovative steps to address the problems, but encouraging gambling will not solve anything.
Photo: Courtesy of Laron Fomby
