Living in Nevada, it’s sometimes easy to forget how large a role the gambling industry plays in civic affairs. After all, we’re used to casinos running the show.
In fact, during the last session of the Legislature, one lobbyist allowed that protecting the state’s No. 1 industry (gambling) was the highest priority of the Legislature. It wasn’t immediately clear where protecting the public health, safety and welfare falls on the list.
But that kind of thing doesn’t play as well in states that don’t have Nevada’s long history with organized gambling. They might find the industry’s — oh, let’s call it, self-assured attitude — somewhat off-putting.
As if to underscore that, the American Gaming Association, the national lobby for casinos, this week released a statement warning states to allow casinos to be free to “innovate” and “operate efficiently.” In other words: lay off the taxes and regulations.
Or? Or you’ll end up like moribund New Jersey, where casinos in Atlantic City are timeworn and closing.
“Over the past several decades, casinos have proven to be powerful economic engines in communities from coast to coast,” association President and CEO Geoff Freeman said in a statement. “But like most businesses, casinos operate in a highly competitive environment. The evolving situation in Atlantic City should send a message to other gaming communities: restrictive regulations that fail to keep pace with business demands and increased competition will stifle the gaming industry’s ability to innovate, create jobs and play an important role in economic development.”
Interestingly, the increased competition often comes from the industry itself: Casino companies are seeking to open new ventures in Massachusetts, Maryland and Pennsylvania, markets that will compete with Atlantic City.
But Freeman sees it a little differently: “As casino gaming expanded across the United States, New Jersey was slow to react,” he said in his statement. “Other communities should learn from their mistake and rapidly adopt policies that empower gaming companies to innovate, retain and attract new customers and operate efficiently.
“The ‘tax-and-torture’ model adopted by many gaming communities is unsustainable. Gaming companies seek further partnerships with forward-looking policymakers who realize that punitive regulations and taxes are counter-productive and, with the right policies, casinos can be one component of a successful economic development strategy.”
States currently in the process of legalizing gambling need to understand a simple truth: When casinos initially propose projects in those jurisdictions, they promise the world. Good jobs, hefty tax revenues, redevelopment of downtrodden areas and economic development — it’s like finding a goose that lays golden eggs!
But once those casinos are up and running, they essentially become partners with the government, and the more the government becomes dependent on casino revenues, the greater the pull the casinos will exercise. “Don’t kill the goose that lays the golden eggs” will be the rallying cry against all forms of regulations, and all proposals to increase gambling taxes. Critics of gambling will be targeted in favor of — what’s the phrase? — “forward-looking policymakers” who just happen to be willing to do whatever a casino company suggests. You know, so they can innovate and stuff.
Jurisdictions that welcome casinos need to understand up front those businesses will not be shy about throwing their weight around once they’re established in a community. Promises of tax revenue in support of education and health care can easily dissolve into complaints about “tax-and-torture.” And all of the jobs created quickly morph into a voting bloc of people who’ll be encouraged by their casino bosses to vote for the good of the company. And the accommodating casino men of today will be trash-talking the regulatory regime to the world tomorrow.
States and cities need to understand this dynamic up front, and proceed with caution. It may be too late for Nevada, where gambling is king, but other places can learn from our example.
Steve Sebelius is a Review-Journal political columnist who blogs at SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or SSebelius@reviewjournal.com.