Slots Talk from LOPP/Md

The following was prepared by the Lutheran Office of Public Policy – Maryland, Lee Hudson, Director.  The Maryland Legislature has put a slots referendum on November’s ballot.

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Slots Talk from LOPP/MD-the Markets

The ELCA social statement “Sufficient, Sustainable Livelihood For All” (1999) objects to gambling as a public revenue source because it’s regressive; it taxes the poor greater than other demographics (page 12). A common rebuttal by gambling proponents is that gambling doesn’t target any demographic; it’s simply a recreational activity on which people chose to spend disposable income.

That’s disingenuous: there’s a gambling industry business plan that understands how to reach and keep its market. Maryland’s current gambling public typifies it. Most money wagered in Prince Georges County on the Maryland Lottery is from lower-income households. It’s similar in other jurisdictions. For state-sponsored gambling to succeed (“success” means achieving revenue projections) that public has to be expanded significantly.

The slots business plan is associated with the propensity of retail gambling to produce addiction. Problem, pathological gambling rates among the general population double out to fifty miles from the sites. The rate is higher among lower income African Americans according to a University of Chicago study. Currently gambling activity is increasing among younger people. Both demographics are target markets for the gambling industry.

For that reason the selection of two sites, at Laurel in Anne Arundel County and at the Harbor in Baltimore City, has been made to realize revenue projections. The Laurel site will get its share of military personnel (a target market) but its real value is its proximity to Prince Georges County and a key demographic density, modest income African Americans. The State’s revenue estimate calls for Laurel to provide $500 million in gambling losses. Baltimore City is expected to produce another $400 million.

The ELCA objection to unfair taxation is legitimate. Central Maryland is supposed to provide $900 million of the projected $1.3 billion in gross slots receipts. The two Central Maryland sites will contribute 70¢ of every dollar the State hopes gamblers lose. Within the gambling demographic retirees, low-income people, young people, and minorities dominate and are abundant around these two sites.

Revenue estimates for those two high volume sites are an assumption based on local minority, retiree, and poverty densities. Baltimore County is a subdivision with a large number of retirees that like to gamble we’re told. It’s assumed many will find their way to the Inner Harbor site; but Baltimore City’s large, minority and poverty demographic will provide a lot of the players. There’s another retired demographic in Montgomery County and considerable discussion has taken place about whether it will find its way to Laurel. It may not; but the Prince Georges County density of preferred demographics will, and revenue assumptions are based on that.

Gambling is an uncomplicated economy: disposable income is spent on the wager transaction. Around each location, slots will compromise local economies. At Rocky Gap and Ocean City, two destinations now billed as family-friendly for instance, slots will consume available disposable income and damage tourist economies. Slots are fed by local, disposable income. That’s why slots increase poverty and decrease local economic activity.

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