Casino Gambling in Kentucky May Be Too Late To Help Now

I've never been a fan of gambling. I like to bet on the races, but only when I'm there in person to watch. Anything else - meh. Casinos leave me cold.

And I personally witnessed the poverty, crime and desperation of hollowed-out Atlantic City behind the glitzy casinos after they legalized gambling. So I never bought the jobs-n-prosperity lie.

But in the Great Kentucky Casino Debate of 2007-2008, I didn't have much of an argument against the passionate supporters of legalizing slots and casinos who pointed out that neighboring states with casinos were making fortunes off of Kentucky gamblers, and if they're going to gamble their money away, why not keep it in state?

And it is gambling, not "gaming." "Gaming" is a verb meaning cheating, as in "gaming the system."

Now Barefoot and Progressive finds evidence that casinos won't do Kentucky any good now.

Steve Beshear won the Governor’s Mansion in a landslide. Is this a mandate or a rejection of the other guy? Just as he did in 2007, Steve’s testing this boundary with the gambling issue.

Back then, his singular campaign promise failed to come true, blocked in Frankfort and loudly opposed by folks across the state. Can it be different in 2012? Steve’s down to try again:

“I think most folks out there are ready to vote on expanded gambling,” Beshear said. “My preference is for passing something we can get a majority vote on. If that’s legislation, I’m all for it. If that’s a constitutional amendment, I’m all for it. I think it’s a much easier vote to put on the ballot and let the people vote on it.”

He said he has been in talks with Republican and Democratic leaders in both state chambers but has not yet met with Senate President David Williams, R-Burkesville. Beshear soundly defeated Williams in the Nov. 8 general election, and Beshear said yesterday that one key difference was their stand on gambling.

Whether it’s going through the legislature or via a constitutional amendment, Beshear thinks (or, says he thinks) the tone has changed and now’s the time.

Gambling’s never been a terrible idea to raise revenue. Some oppose it for religious reasons, others are concerned about gambling addiction. The structure of Beshear’s first administration ideas all sought to feed the money into the thoroughbred industry, which is certainly struggling.

The most sensible argument against Beshear’s gambling plan is that it’s a regressive tax. It seeks to fleece money for revenue from, by and large, the people who struggle the most. Sure, there may be some high-end gamers (What up, David Williams!) but looking at the make-up of this state, the economic situation of its population, Steve Beshear’s plan raises revenue from the wallets of the poor.

If gambling was coupled with actual tax reform then the state could move in the right direction. If it was further augmented with industrial hemp job creation and revenue (what up, James Comer), that would do even more to put Kentucky on its feet.

As it is… Steve Beshear appears aimed for raising taxes only on Kentucky’s working class through regressive gambling. Fair enough. Hopefully it will work, raise money for the state and help the thoroughbred industry.

Here's the problem: because we missed the opportunity four years ago, legalizing casinos today will be the worst of bad bets.

The same Gambling Association report found that of 22 states, eight saw a decrease in tax revenue -- including West Virgina (-7.3%), Illinois (-6.0%) and Indiana (-0.4%). Twelve states saw a decrease in casino jobs -- including West Virginia (-3.4%), Illinois (-2.7%) and Indiana (-10.8%). (There's much more in the full report (PDF) for both sides of the coin... or chip).

While four years ago, we were largely left to believe the prognostications of the Governor and both sides of a very divided argument, now we have twenty-two test scenarios, which we can study and consider. If the projected economic impact stretches over a billion, we have states to check whether that's realistic.

The other question is (and always has been), if the argument currently is that Kentucky tax dollars are being lost to neighboring states with legalized gaming, what is the net effect of creating another state with legalized gaming? As in... Indiana's revenues, for example, are -- by this argument -- beefed up by Kentucky residents' money. If Kentucky legalizes gaming, Indiana not only loses that revenue (which we shouldn't much care about) but are Kentucky's projected gaming figures built on the idea that we'll be receiving neighboring state's gambling dollars? Or are the projected figures weighted heavily and primarily on the backs of Kentucky residents rather than visitors driving across a river or border?

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With all these test cases out there, it should allow for a much more informed debate than the one four years ago. Rather than just relying on the Governor and other advocates figures, they can be checked against how other states have actually fared. And rather than simply relying on the other fact sets offered by those opposed, there is the realities of other states. The question isn’t “Should we or shouldn’t we?” It’s more like, “Does it work?”

And in looking at other states and learning from their lessons, one state that should be looked at very carefully is Kansas. Unlike all the other ones, Kansas legalized casinos with a twist — the state is in charge. Rather than hand over massive profits to the existing casino industry, the thought goes at least, the state maintains that control and thus keeps more of the created revenue.

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The lessons of Kansas aren’t yet clear, but it would be highly irresponsible of Gov. Beshear and everyone else to not look closely at their model and consider how much additional revenue would be created by keeping the money rather than handing it over to the gambling industry.

I'm up for pretty much anything that saves the horse industry, but casinos haven't proven their case.