Say No To Casinos

Forget the Final Push, Work for the Commonwealth, NOT Casino-wealth

John-Mark Hack — Wed, 19 Mar 2008 16:31:57 +0000

Say No to Casinos, the educational campaign devoted to distributing results of scholarly research on the issue of casino gambling in Kentucky, today calls on Governor Steve Beshear and House Speaker Jody Richards to drop their ill-fated proposal to allow casinos in the Commonwealth of Kentucky. The campaign issues its comments in response to statements by both the Governor and the House Speaker that indicated they would try and resurrect the dying casino-horse legislation.

The humane thing to do would be to put this mortally wounded “casino-horse” out of its misery, and save the rest of us any more misery. The great tragedy of this issue is what it’s already cost our Commonwealth in terms of lost time, energy and money this legislative session that could have been devoted to moving our state forward, instead of trying to engage us in a race to the bottom via casinos.

Say No to Casinos went on to advise the Governor and the House Speaker to “cut their losses,” and try to save any face they can. When you keep doing the same thing over and over, and expect different results, people will and should start to question the quality of your leadership. It’s almost like they’re behaving like compulsive gamblers, who just can’t stop losing. We suspect that House members will tell the Governor and the Speaker that they have no interest in getting on a losers’ bandwagon.

Speaker Richards told the Lexington Herald-Leader and the Associated Press reported that he and the Governor would begin one final push to gain enough support to resurrect the failed legislation and to pass a constitutional amendment to allow casinos. This campaign advises the Speaker that House members should be focused on another resurrection.

This is Holy Week for a number of Kentuckians. We would hope that House members and the Governor would turn their attention toward the Resurrection that offers them hope, rather than one that offers us only despair, corruption, and loss.

Closed-Door “Wheeling and Dealing” Keeps Public in the Dark on Slot Machines and Casinos

John-Mark Hack — Thu, 24 Jan 2008 03:42:47 +0000

Say No to Casinos, the educational campaign devoted to providing scholarly research on the costs of casino gambling in Kentucky, called on Gov. Steve Beshear to open the door to the public on his dealings with the slot machine industry. The campaign issued the call in the wake of Rep. Tim Firkins (D-Louisville) voicing his frustration with the Beshear administration on Tuesday for its lack of communication on the issue of slot machines and casinos in Kentucky.
            “Gov. Beshear announced his position on this issue a year ago during his campaign, he’s been in office for more than a month, it’s his top legislative priority, and the public still doesn’t have the first bit of information on how he proposes to divvy up the state’s wealth to his Casinocrat campaign contributors,” said John-Mark Hack, chairman of Say No to Casinos. “It’s time for the Governor to let the people of Kentucky know what his plans are, rather than keeping the door closed to all of us on such an important issue. The wheeling and dealing should be open to the citizens.”
            Say No to Casinos believes that Kentucky should close the door on its history of back-room deals between politicians and executives from industries that aim to extract the wealth from our Commonwealth. A government by, for and of the people can be and should be conducted in a way that’s open to the people.
            “Reviving the era of smoke-filled rooms, closed door meetings and political corruption won’t do anything to increase citizens’ confidence in government,” Hack said. “If the Governor believes that slot machines are a sound public policy, then he should be completely transparent with the people of our state on this issue.”
            Hack said that he believes the Governor is waiting until after the January 29 filing deadline for state legislative seats to unveil his slot machine proposal so that his supporters in the legislature would not have to face the political accountability of a campaign opponent. If legislators are not required to take a position on controversial issues before the filing deadline, then they reduce the likelihood of gaining election opponents.
            “It’s been done for years by Governors well before our current one, but we can do better than that,” Hack said. “Kentucky government should function according to how things should be done, not according to how they always have been done. If the Governor is confident in his plan for a slot-machine economy in Kentucky, then he should present it to the public BEFORE the filing deadline. It doesn’t serve the people to wait until after the filing deadline. It implies that the administration has something to hide. And it doesn’t serve the people to allow a predatory industry that peddles addictive products to write legislation that would amend our state constitution and open our doors to them.”
            Hack said he doesn’t believe the campaign or the people of Kentucky will get a response from the Governor. The closed-door meetings will likely continue, until the slot machine proponents figure out how to divide the spoils.
“Apparently, gambling opponents,” Hack said, “lack the resources to compete in a “pay-to-play” political system.”

A Letter to Casinocrat Governor Steve Beshear: Don’t Hide Costs of Your Slots!

John-Mark Hack — Mon, 07 Jan 2008 23:47:24 +0000

Dear Governor Beshear:

Congratulations on your recent election as our state’s Chief Executive. I hope you have enjoyed the recent holiday season and wish you a prosperous and productive New Year. The upcoming legislative session will certainly present numerous difficult challenges, and I wish you the very best as you confront them.

Your embrace of slot machines and casino gambling as your top legislative priority presents many Kentuckians with several perplexing questions. In light of all our state’s pressing needs, why would you attach yourself to this initiative, rather than focus on long term solutions like comprehensive tax reform? Given that you have repeatedly claimed, without offering any reliable evidence, that by gambling we’ll gain $500 million in revenue for state government, what will this windfall cost us?

While we doubt the credibility of your $500 million claim, we will acknowledge it for the sake of further deliberation. It is now time that a trustworthy leader would tell his constituents what this slot-machine economy will truly cost. You should neither insult the intelligence of Kentuckians nor avoid your duty by failing to explain in detail what this $500 million claim will cost us.

In order to get a valid, reliable comprehensive cost-benefit analysis of casino tax revenue, we are requesting you to commission a reputable scholar outside Kentucky, independent of gambling opponents and supporters. Such an investigation would fundamentally differ from the economic impact analyses the gambling industry prefers, which offer statistics on jobs creation, construction and development activity, and tax revenue generated, but omit any description whatsoever of the costs of the projected impact.

Two existing cost-benefit analyses of gambling in America describe what these costs would likely include. The June 1999 National Gambling Impact Study Commission Final Report, issued by a national commission appointed by President Clinton, recommended a moratorium on gambling expansion until the costs and benefits could be investigated further. Their two-year study identified such costs as increases in gambling addictions among adults and youth, financial and credit problems among gamblers, reduced worker productivity, employee theft, other crimes, suicide, divorce, homelessness, and abuse and neglect of children. More than half of these costs end up being paid by taxpayers through government programs.

The most comprehensive cost-benefit analysis is offered in Dr. Earl Grinols’ 2004 book Gambling in America: Costs and Benefits. A Baylor University economist, Grinols served as Senior Economist on President Reagan’s Council of Economic Advisors, has published more than 80 books and articles, and has studied gambling for more than 15 years without support from the gambling industry or its opponents. He documents the cost of gambling-derived tax revenue as among the most expensive methods of funding government, concluding the costs outweigh the benefits by more than a 3:1 ratio.

Governor, you tell us state government is in a hole because it’s spending more than it makes. Now you are also telling us we can gamble our way out of this hole by going to the slot parlors and gaining $500 million every year, a figure for which you have provided no valid evidence. Where will it come from? Will you play the slots? Will you encourage your family to play the slots, including your children and grandchildren?

You have quoted the great Kentucky statesman Henry Clay: “Government is a trust, and the officers of the government are trustees.” Whether your projection is true or not, you are obliged to the people of our Commonwealth to uncover what it’s going to cost us. A comprehensive, reliable and valid cost-benefit analysis would provide for more informed decision-making than what has happened thus far. Please do not further insult us with promises of free money. Instead, inform us of the real costs of this alleged new revenue. A reliable trustee would explain both the benefits and the costs.

Please know that as a campaign, we stand ready to provide data from sound academic research on the costs and benefits of casino gambling as demonstrated in other states and communities across the country. Please consider us at your service. Thank you for your commitment to our Commonwealth, and again, Happy New Year.

                                                            Sincerely,
                                                            John-Mark Hack
                                                            Campaign Chair

Opposition is Alive and Well

John-Mark Hack — Fri, 28 Dec 2007 22:46:01 +0000

Say No to Casinos, the educational campaign devoted to providing scholarly research on the costs of casino gambling in Kentucky, is alive and well. The campaign plans numerous events in Frankfort and across the state during the legislative session that are designed to increase access to the objective academic research on slot machines, casinos and the devastation they have caused in communities throughout the country.

Kentuckians are being inundated with unsubstantiated claims of the alleged benefits that casinos could bring in terms of government revenue, but no elected leaders are truthfully describing the costs of bringing a predatory industry based on addictive products. We want to let Kentuckians know that opposition to casinos and slots is indeed alive and well. There is a misperception among some legislators and a few voters that casinos in Kentucky are a ‘done deal,’ but most Kentuckians believe we can do better than a slot machine-based economy, and that we can do better than another source of addiction for our people.

We have made substantial revisions to our website, www.saynotocasinos.com, including new informational resources, an easy way to make tax-deductible contributions, and the addition of a brand new video entitled “Casinos in our Commonwealth?” The video was made possible by the expansion of the campaign’s support base and will be used by a Speaker’s Bureau network comprised of dozens of volunteers all across the state. The video can be viewed on the website or in one of hundreds of presentations that will be made in various venues in the coming weeks.

The campaign also has several special events planned during the legislative session to catch the attention of legislators and media. These events will counter the millions of dollars that casino advocates are likely to spend on paid advertising and campaign contributions to the Governor and legislators.

As long as legislators are open to hearing the facts about this predatory industry, and as long as the media does its job in providing fair and balanced coverage, we will win during the legislative session.

Some politicians in Frankfort contend that it’s only a matter of time before the legislature amends the state constitution to allow casinos in Kentucky. Say No to Casinos warns against such thinking. The Casinocrat politicians and narrow special interests pushing this toxic agenda are in for a major awakening if they think the deal is done. We are armed with the truth about this issue; not the spin, not the fabrications, not the false promises.

The campaign has partnered with several other groups battling against casinos in Kentucky, including Citizens Against Gambling Expansion (CAGE), the Kentucky Baptist Convention, and The Family Foundation. It is also working to gain new organizational support from other groups focused on social and economic justice, as well as sustainable economic development.

This issue is important to all Kentuckians. We’re seeing people who disagree on several other issues come together in an unprecedented way to confront the scourge of slot machines in Kentucky. We all realize that we don’t need yet another source of addiction in Kentucky.

MIT Professor Documents Insidious Nature of Slots

John-Mark Hack — Fri, 14 Dec 2007 21:24:19 +0000

Dr.Natasha D. Schull, an Assistant Professor at the Massachusetts Institute of Technology (MIT) Program in Science, Technology and Society, has performed extensive research on gambling machines and their dramatic rise to becoming the primary revenue source for casinos. Princeton University Press is publishing her work on gambling machines in a book due out in the Fall of 2008. The following is a written version of testimony Dr. Schull offered to a Massachusetts Legislative Hearing on Gambling Addiction on October 31, 2007:

My research (to be published in the Fall of 2008 by Princeton University Press) began in the early 1990’s in Las Vegas, and concerns the dramatic turn that’s taken place in recent decades from social forms of gambling, played at tables, to asocial forms of gambling, played alone at video terminals. Although classic green-felt table games or “live games” dominated casino floors as recently as twenty years ago, today gambling machines are the “cash cows,” the “golden geese,” the “work horses” of the industry.1 Frank Fahrenkopf, president of the American Gaming Association, the commercial lobby that supports the Gambling Industry – has remarked that “it’s the slot machine that drives the industry today.”2

As a social anthropologist, it fascinated me that gamblers were increasingly playing with machines rather than with each other, and I wanted to understand why. I moved to Las Vegas, where I lived for over 18 months, and spent countless hours observing and speaking with local gamblers, whom I met in casinos, bars, grocery stores, and Gamblers Anonymous (GA) meetings — where over 90% of those in attendance are exclusively video gamblers. A full two thirds of those who reside in Metropolitan Las Vegas gamble.3 Of these, two thirds do so heavily (defined as twice a week or more, with session lengths of 4 hours or more)

1 In 1980 forty-five percent of casino floor space in Nevada was dedicated to coin-operated gambling; by 1998 the figure had risen to 80% (WGCE, Sept 1999). Atlantic City expeienced a similar shift (New York Times, Dec 17, 1998, p. G7; “Luck, be a Microchip tonight: Gambling goes Digital”). Depending on jurisdiction, today machines generate from 70 - 90% percent of total gaming revenue. In residential areas of Las Vegas where machines are heavily preferred over live forms of gambling, the devices generate as high as 90%—a figure that grows still higher when one considers the numerous machines operating in bars, supermarkets, and pharmacies across the city.

2 Quoted in Rivlin, Gary. 2004. “Bet on it: The tug of the newfangled slot machine.” The New York Times Sunday Magazine, May 11.

3 http://cber.unlv.edu/stats.html; Data Sources: Clark County Comprehensive Planning, Las Vegas Convention and Visitors Authority, State of Nevada Gaming Control Board.

or moderately (1-4 times a month, with session lengths of 1-4 hours).4 Half the revenue generated by this considerable gambling activity is captured by Station Casinos, a franchise that leads the locals market. Most residents live within a three-to-five-mile radius of one of its thirteen properties. Eighty-seven percent of Station Casinos’ cash flow derives from slots and video poker, expressing residents’ strong preference for gambling machines. In 1984, the annual Clark County Resident’s Study, published biennially by the Las Vegas Convention and Visitors Authority, reported that 30% of gamblers play machines most often; twenty years later, that figure had reached 70%.

4 Shoemaker, S., and D. M. V. Zemke. 2005. The “Locals” Market: An Emerging Gaming Segment. Journal of Gambling Studies 21:379-410, p. 395. This study is more precise in its methodology than another study with similar numbers conducted by GLS Research in their 2006 Clark County Resident’s Study: Survey of Leisure Activities and Gaming Behavior. Las Vegas Convention and Visitors Authority. See also G. Woo, UNLV Las Vegas Metropolitan Poll, Cannon Center for Survey Research, 1998, p.4.

5 GLS Research, Clark County Resident’s Study: Survey of Leisure Activities and Gaming Behavior. Las Vegas Convention and Visitors Authority, 2004, p. 19.

I learned a number of counter-intuitive things during my extended fieldwork among gambling regulars and addicts in Las Vegas. Although people typically think of gambling as an activity that is about fun and excitement, regular and addicted machine gamblers are motivated less by a desire for chance, excitement, or entertainment than by a desire for escape into a dissociative state of continuous flow. Without social element to keep them in check, they are able to exit the world and enter what they call the “machine zone” – a kind of anesthesia from human concerns that removes them from time, space, a sense of monetary value, or even embodiment. Gambling machines so completely concentrate players’ attention on a series of

6 For a video tutorial of how machines work, see software developed by GamePlanit.com.

specific game events that anything troubling about their life situation – physically, emotionally, or socially – is blotted out. The aim is not to win, but instead, to “keep going.” Winning not only stops mattering but actually becomes undesirable, for it interrupts the flow of play. As one gambler told me: “It may start out being about the winning – but that’s just a drive-in to something else.” A gambling addict who wins does not get up and go; one women told me of the dread she felt on hitting a jackpot at 4 AM one morning: “Now I have to sit here for two more hours until it’s gone.” As gambling addicts often told me during my research, “leaving with money is not an option.”

I came to realize that that to fully understand what was motivating people to play machines in increasing numbers – and what was addicting some of them – I had to learn not only about what was going on inside individual gamblers, but also what was going on inside the machines they were playing. To that end, I expanded the scope of my research and began interviewing engineers, designers, and marketers of gambling technologies, in their labs and at major trade conferences like the Global Gaming Expo, which I have been attending since the mid-1990’s. In such settings, the aim of technology design is no big secret: how to get people to play longer, faster, and more intensively. Amongst themselves, game developers and marketers freely discuss how they can better harness technology to keep gamblers seated “for as long as humanly possible,” as one designer put it. Every feature of gambling machines – mathematical structure, visual graphics, sound dynamics, seating and screen ergonomics – is geared to increase “time on device” and encourage gamblers to “play to extinction,” as the industry jargon goes (in other words, until their funds are depleted). While gamblers talk about “the zone” of continuous play flow, game developers talk about “continuous gaming productivity.” Machines are designed to match up more and more perfectly with certain human fallibilities – and in some cases, vulnerabilities. Their ability to do this has increased exponentially.

Today’s machines are a far cry from the “one-armed bandits” whose primary role in the 1950s and 60s was to occupy the female companions of gamblers playing table games. Instead of handles and reels, the devices have buttons and screens; instead of coins, they take player credit cards; and instead of a few games per minute, hundreds can be played. Instead of actual reels, they have virtual reels that rely on complicated algorithms whose workings few people in the gambling industry itself understand — much less policymakers or citizens considering these machines in their own communities.6

If we actually look at what these algorithms are doing, it’s a kind of high tech version of “weighting the deck” or “loading the dice” – which no self-respecting casino would ever think of doing. Unlike casino table gambling, in which traditional card games with transparent rules are adapted to include a house edge, gambling machines descend from carnival games whose workings have always been played against the house, have always included deception, and have

7 Prevalence measures for pathological and problem gambling are plastic. AGA’s website, citing research that it funded with casino endowments, claims that 1% of the U.S. adult population gambles pathologically. Various researchers have estimated rates between 6 and 8 percent among Las Vegas locals (e.g. Gemini Research, 2005).

8 Australian National Productivity Commission, 1999; Focal Research, 1998; each study had more than 10,000 respondents.

9 Some argue that the greater market penetration of gambling machines accounts for the greater numbers of those addicted to them; still others fail to see why this should be an argument against curtailing their density.

10 A study found “no significant relationship between control over gambling and age, employment, relationship status, education or distress from significant life events. Control over gambling was, however, significantly related to duration and frequency [of machine play]” (Scannell, et al. 2000. Female’s Coping Styles and Control over Poker Machine Gambling. Journal of Gambling Studies 16, p. 248

always been concealed in a box. Given that such devices are “driving the industry” (as the AGA president tells us), it makes sense that we should open them up to the same kind of public scrutiny directed at other consumer products, like toys imported from china, to make sure they stand up to consumer protection laws on deception and misleading graphics. Legislators involved in the decision to expose citizens to these machines and draw on their revenue to augment the state budget should make sure they understand how these machines work.

Just as it is a mistake to view all forms of gambling as homogenous in nature, potency, and effect, it would be a mistake to treat all gambling machines as alike; these computerized devices are not the same as the mechanical slots of the 1960s. Internationally, machine gambling is associated with far higher rates of pathology than traditional forms of gambling.7 Large epidemiological studies in Australia and Canada have estimated that problem gamblers lose 17 times as much money as other patrons, generating 42 to 53% of net machine revenues.8 A study in Nova Scotia was surprised to find that 50% of regular machine players gambled problematically, generating 80% of revenue from machines.9

The discussion around “problem gambling” and “pathological gambling” tends to focus on what might be wrong with individual gamblers. The fact that some might come into the world more susceptible than others to developing addictions – a fact that is not in dispute here – does not mean that it isn’t important to also consider the fact that some machines come into the world better prepared to addict those who engage with them.10 Addiction is understood in the scientific literature as relationship that develops between a person and an activity or substance. Diagnostic and prevention efforts should focus on both sides of this relationship. I do not believe that creating addicts is the aim of the gambling industry; like other businesses, the aim is to maximize profits. Yet attempts to make devices more and more effective at extracting money from consumers renders products that – for all intents and purposes – treat every player as a potential addict, in other words, as an individual who will keep playing until their means are thoroughly exhausted.

8 Australian National Productivity Commission, 1999; Focal Research, 1998; each study had more than 10,000 respondents.

Warren Buffett: Casinos are the Wrong Way for Government to Go

John-Mark Hack — Thu, 05 Jul 2007 19:17:50 +0000

In 2004, Warren Buffett drew a line in the sand. Facing a ballot referendum on whether to allow establishment of casinos in his home state Nebraska, the highly regarded business leader publicly spoke out against casinos and helped to handily defeat the casino initiative. Mr. Buffett sat down with Tom Grey, Executive Director of the National Coalition Against Legalized Gambling (NCSALG), to describe his opposition to casinos. The following article is drawn from excerpts of a transcript of this conversation, reprinted here with permission of NCALG. Say No To Casinos will be running excerpts from this interview over the next several weeks. You can check out the video of this interview on the internet at http://www.ncalg.org/resources.htm.

TG: You know I think it’s interesting when you talk about it out of the pain that’s felt, because government has promoted this as a painless revenue stream. Only the willing are doing it, and it seems to me that it’s somewhat untruthful at its best, and at its worst, it’s very cynical to do that. Another promise that’s made is that it’s economic development.

WB: Well, there’s nothing getting developed. It’s a transfer of money. Basically, if you take the losses of everybody that participates in gambling, and it’s not gaming, it’s gambling, if you take the losses, it will end up going three places. It will end up going to the state as taxes to some degree, and that’s not development. It will end up paying part of the operating expenses of the operations, but anyplace that you spend the money will go to the operating expenses of that establishment. And, it will go to the owners. I get some kick out of this “Keep the money in Nebraska” name attached by people who want to bring casinos here because there are two propositions out there, and the greatest amount of funds for each one of them promoting them is coming from institutions in Nevada. If I’ve ever go out to Nevada, and start running campaigns that say “Let’s keep the money in Nevada,” and put a lot of money into it, believe me, Nevadans should look at me twice. That’s not what I’m all about.

TG: No you mentioned if we follow the money and do the math, you mean the players are losers?

WB: Yeah, well, just assume that Nebraska had this, and our Nebraskan citizens overall lost $100 million. Well, I think in one of the propositions, there’s 35% of the first $15 million, and 20% of the next money goes to the state, so some of the money will go to the state, and that’s just like a tax. Basically, that comes right out of the citizenry, and that doesn’t do any development at all. Some of the money will go for operations, and the rest of the money will go for profits, and the sponsors of both of these are out of state corporations, so you’re not talking about development for Nebraska when you talk about transferring money to Nevada and the state.

TG: It seems to me that’s interesting because we’re talking about an economic factor, but also a public policy factor. What kind of government…

WB: That’s the one that means the most to me. I do not think that the state ought to be in the position of selling the needles. I mean, we’re going to have drug addicts in this country, but I don’t think the state ought to get in the business where it hopes there are more drug addicts and starts selling needles. And we’re going to have gambling addicts in this country, but I don’t think the state ought to become the sponsor of spreading that addiction.

Context - Let’s Be Honest

John-Mark Hack — Fri, 25 May 2007 23:07:20 +0000

Supporters of the Democratic gubernatorial nominee are calling his Tuesday victory a “mandate,” and the candidate himself is suggesting his victory indicates a groundswell of support for his Casinocrat agenda of getting casino gambling in Kentucky. Let’s be sure folks are being accurate in their use of the term.

There are approximately 1,596,000 voters registered as Democrats in Kentucky. Of those, only about 143,000 cast their ballot for the winning candidate. That’s less than 9% of registered Democrats. On top of that, 60% of the Democrats voting Tuesday voted AGAINST the winner.

Political spin meisters often employ certain words in less than honest ways to build momentum. One supporter of the winning ticket, state Treasurer Jonathan Miller, appararently can’t do basic math, even after 8 years as State Treasurer (a wholly unneccessary elective office in Kentucky). On election night, he was the first to employ the term “mandate.” Getting less than one in ten of registered “D’s”, of which I’m one, hardly meets the conditions of a “mandate.”

Shameless

John-Mark Hack — Thu, 10 May 2007 18:25:56 +0000

There are only a few days left until the two major political parties determine their gubernatorial candidates. Speaking as a Democrat, there is a disturbing degree of shamlessness among some of the campaigns when it comes to their claims regarding expanded gambling in Kentucky. One campaign for instance is claiming that we need casinos to keep money from leaving the state. The campaign claims we’re building schools, paving roads and providing health care in other states. Its candidates promise to keep the money currently lost in casinos in other states by building casinos here.

This promise is simply the opposite of the truth. It’s a shameless effort to get elected by individuals desperately hungry for power. In fact, the campaign has been  disingenuous in the presentation of its projections and their basis, which they have borrowed from the Kentucky Equine Education Project. The approach has included the gross inflation of the amount of money being gambled by Kentuckians out of state or “over the river.” KEEP has claimed that over $500 million is going out-of-state, which must be recovered by having our own casinos. This figure was provided by a consulting firm that does “studies” for the casino industry. We could not expect a balanced study from such a group, and KEEP did not get one.

The last even moderately reliable study was conducted for the state by PriceWaterhouseCoopers in December of 1999. This study, while better than the recent one, was inflated as well, because it failed to provide adjustments for differences in income between Kentucky, Illinois and Indiana, leading to overestimates of how much Kentuckians gambled. They found that $207 million was going out-of state, not just over the river, but to destination casinos in Nevada and New Jersey as well.

The proportion going to destination casinos will not be recovered. Since casino income has been growing very slowly at the border casinos, even allowing for growth at a 3% rate would result in only $254.6 million going out of state. The amount to be recovered would not exceed $200 million and Kentuckians would have to lose seven and a half times this amount ($1.4 billion out of the state’s economy) to accomplish the feat.

The more serious problem, however, is that the money brought home will not stay at home. The casinos at the tracks would be largely owned by out-of-state corporations and investors, who would remove profits from the state. It is already happening with the racetracks as operated now.

The largest operation, Churchill Downs, is mostly owned by non-Kentuckians. Twelve large investors (in 2005) held 51.5% of the stock. Duchosois Industries sold Arlington Park to Churchill for 24.2% of Churchill’s stock. Of the other major owners holding more than 1% of Churchill, most are major banks or investment firms located in Boston, Chicago, and New York.   One banker and one horse farm owner from Kentucky together own 2.2%.

The dividends, disbursements, and profits from Churchill flow out of the state and much larger amounts would do so if the tracks get casinos. If the same proportion held for the other 48.5% of the shareholders in this publicly held corporation, Kentuckians would own 4.4% of Churchill Downs the umbrella corporation, with all the rest of the profits going out of state.

Harrah’s, one of the largest casino corporations in the world, owns the Paducah racetrack, a fourth of the Franklin track (Kentucky Downs) near Nashville, and a third of Turfway near Cincinnati. Harrah’s is poised to make billions from casinos in Kentucky. Another 71% of the Kentucky Downs is owned by Nashville billionaire Brad Kelley. We would be foolish to think Harrah’s and Kelley plan to leave the money here.

The gambling industry is not bringing the money home now, will not bring it home if they get casinos, and will levy a massive hit on Kentucky businesses that we simply cannot afford. Bringing the money home is a sham, a shameless sham being perpetrated on the people of our Commonwealth by the Casinocrats, candidates who haven’t even bothered to study the issue and other states’ experience with it before using expanded gambling as a foundation of their campaigns. Don’t be fooled by the Shameless.

Just in case you didn’t know…

John-Mark Hack — Thu, 12 Apr 2007 01:32:44 +0000

http://www.kentucky.com/471/story/31777.html

On April 1, the Lexington Herald-Leader posted the official positions of the various candidates for Governor on the issue of expanded gambling. For most of them, it’s “gaming,” kind of like Monopoly, or Risk, or Sorry. For the tens of thousands of Kentuckians who will lose millions so that a few of these candidates’ supporters can get even more wealthy than they already are, it’s a gamble, pure and simple. And it’s a gamble we can’t afford in Kentucky.

Democrats, Republicans and Casinocrats: Who Will Lead Kentucky?

John-Mark Hack — Mon, 22 Jan 2007 14:28:35 +0000

           State Economic Development Secretary Gene Strong’s recent retirement has many of us pondering Kentucky’s future business environment. During Strong’s tenure, Kentucky developed a promising manufacturing sector, a growing service sector, and a fledgling knowledge sector, all of which employ hundreds of thousands of Kentuckians. Many of these businesses strengthen our Commonwealth. They empower us by making substantial investments in our communities, providing strong wages and benefits to employees, creating opportunities for other businesses to share in their prosperity, producing highly respected goods and services, and supplying a strong source of tax revenue.

            Now imagine this scenario: a few political leaders become convinced that instead of recruiting companies that make our state stronger, we should open the door to a predatory industry that gives little (if anything) back to its communities, offers poor wages and few benefits to employees, sucks up dollars from other community businesses, peddles an addictive product, and costs far more in tax revenue than it ever produces.

             Imagine that they justify their position with a shallow “keeping up with the Joneses” economic argument that suggests we follow perpetually poor states like West Virginia, Mississippi and Louisiana, instead of growing states like Tennessee, North Carolina and Georgia. Imagine that these leaders embrace the notion that our state will improve by thousands losing millions for the gain of very few.

            Imagine that they promote this industry even as it’s starting to show signs of retrenchment from a growth spurt that peaked years ago. Imagine that they promote this industry even as it profits to an absurd degree from addiction. Imagine these profits are invested in enhancing the industry’s seductiveness or returned to its investors, who reside by and large far, far away from my Old Kentucky Home.

            Unfortunately, these circumstances are not imaginary. They describe the rise of a state and national interest group that bears a much stronger political resemblance to a new, distinct party than to traditional Democratic or Republican principles. This group does the bidding of Casinos, not working people and not the business community. They ought to be labeled as Casinocrats, not as Democrats or as Republicans.

            Casinocrats promote the interests of casinos and a few super-wealthy individuals, interests that undermine progressive communities that seek to strengthen their citizens, businesses, organizations and governments. Casinocrats suggest that because casinos pay taxes and make campaign contributions, we should allow them to do business here, regardless of the negative effects they have on our communities, the damage they inflict to most other businesses, and what they always cost public treasuries.

            Casinocrats think that it’s appropriate for working people to give their money to the super-wealthy without getting anything in return. Casinocrats judge that it’s socially and economically desirable to have more people addicted to gambling. Casinocrats believe that because other states do it, then Kentucky should do it too.

            These political tenets are distinct from what Democrats and Republicans have historically represented. For Democrats, the Casinocratic platform doesn’t support working people and progressive communities, produce economic and social justice, or protect and restore the most vulnerable among us. Republicans should consider that Casinocratic interests run counter to principles of smaller government and a thriving business climate. Instead, they require large regulatory regimes and cannibalize profits of neighboring businesses.

            It now seems that Casinocrats have assumed leadership positions in both parties, including the offices of our Republican Lieutenant Governor and Democratic Attorney General. It doesn’t have to stay that way. We all have a say about what we will allow here.

            Will Kentucky have Democrats and Republicans true to their respective ideological heritage? What will you be, a true Democrat, a true Republican? Or will you be a Casinocrat?

            What will Kentucky be? A place that invests in our people and business environment or a place that builds itself up by degrading its people? You have a say in the answer. Democrat, Republican or Casinocrat: the choice is yours.