Casino Watch Focus has reported many times on various states expanding gambling as a means to collect tax revenue, often times at the expense of its own citizens. 100 years ago virtually all forms of gambling were illegal, but slowly, one state at a time, gambling has been made legal by states looking to take their cut of the action. Some gambling expansion takes the form of lotteries, other expansion measures are full-scale casinos. The sales pitch is typically the same, why not allow some harmless fun that will allow the state to bring in some much needed tax revenue, often times promised to local educational causes. Now, a new study confirms what many have claimed, that any initial gains a state looking to expand gambling may see, don’t materialize to long term benefit. Reuters explains:
Gambling provides only a short-term fix for U.S. states looking to boost revenue without having to turn to politically unpopular tax hikes on income and sales, according to a public policy research group’s study released on Tuesday. The Rockefeller Institute of Government said more than a dozen states legalized or expanded gambling in the wake of last decade’s Great Recession.
“History shows that in the long-run the growth in state revenues from gambling activities slows or even reverses and declines,” the study said. The study comes as some states consider whether to expand gambling.
In New Jersey, voters will decide in November whether to allow two new casinos in the north, close to New York City. Local officials in cash-strapped Atlantic City, currently the only area in New Jersey where gambling is allowed, say new casinos will cause the city to lose even more revenue.
With recovery of U.S. regional gaming revenues tepid, long-term headwinds will continue to weigh on the sector, Fitch Ratings said in a separate report on Tuesday. Barriers to growth include “slower wage growth, less certain retirement prospects for baby boomers, and alternative avenues for gambling,” Fitch said.
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