Gambling to Buffer Tax Rolls Replaces Spending Cuts

This is interesting as most reports on gambling say it doesn't reap the rewards for most states that have decided to venture into gambling as a tax buffer. Not to mention one of the down sides is problem gamblers, people that can't afford to gamble, add to the already overburdened state medical establishment as wards of the state. Also, gambling money that is used to grease politicians for favors as well as organized crime trying to get a foot hold brings still more headaches to state capitals.

Still states will go ahead and give it a try knowing full well the problems associated with organized gambling will come as well.

Cash-Strapped States Bet On Gambling
Source: Ron Dicker, "Cash-Strapped States Bet On Gambling," Huffington Post, December 14, 2011.

Faced with mounting budget deficits, more states are expanding gambling options and loosening restrictions in a grab for revenue. Critics warn that the winnings are not worth the potential social and financial ills. Nevertheless, many states continue to enact legislation that will increase brick-and-mortar establishments within their borders.

While the federal government attempts to overcome its deficit woes, it bears mention that states face a combined $95 billion deficit for 2012. In this context, it makes fiscal sense that state lawmakers advocate the expansion of gambling options, as casinos and lotteries make up at least 2 percent of revenue in states that have them.

Recognizing the impending budget shortfalls, in 2009 and 2010 alone, 37 states pushed for increased gambling outlets. State lawmakers in Massachusetts, who recently approved the construction of three casinos after 20 years of the debate on the topic, could not help but emphasize the potential fiscal benefits. Estimates suggest that the casinos will collect $1.5 billion to $2 billion a year. That corporate income will translate into $300 to $400 million in tax revenue to chip away at the state's projected $1.8 billion 2012 deficit.

The fiscal benefits explain largely why so many states have made recent efforts to bring gambling options to their citizens. Additionally, it cannot be ignored that if a state chooses not to allow gambling within its borders it will watch potential tax revenue leak into other states that do.