Will Gambling Really Boost Your Local Economy?

Chips and cards for poker in hand on green table

“Let’s face it,” said Louisiana Senator Danny Martiny, displaying rare candor for a politician, “This is a vital industry here in the state, and we need the money.”

He was speaking as the Louisiana State Senate voted 22-14 in favor of moving 15 riverboat casinos ashore in a bid to increase the state’s take from gambling revenue.

Gambling revenue raised $415m for Louisiana in 2015-16 and legislators are now hoping that a move to limit the number of gambling machines and seats, rather than limiting total floor area, will help to increase that take.

As well as benefiting the state, the Senators voted in favor of the move as a way of boosting the local economies of the sites where the casinos will be located, with all the casinos required to show the Louisiana Gaming Control Board that they contribute some form of “economic development.”

That’s a box they should be able to tick fairly easily. Senators who voted in favor of the move spoke of higher wages and more employment opportunities. Throw in the boost to local retail sales and you have the three traditional reasons cited in favor of casino operations.

Of course, not everyone in Louisiana favored the move: there were fears of an expansion of gambling in the state and the “boost to the local economy” will only come about if the casinos succeed in attracting out-of-state visitors. Otherwise it is likely to simply see Louisiana residents gambling the same amount, but without having to worry about getting their feet wet.

Argument will be popular

The “boost to the local economy” argument is one we’re going to hear a lot more of as the US Supreme Court nears a decision about legalizing sports betting across the US. It can only be a matter of time before states are offering tax concessions to attract sports betting companies, a move that is already paying big dividends in taxes for some East European countries.

It appears that the American people are broadly in favor of the move to legalize sports betting. A recent poll from Seton Hall University showed that 55% of Americans support legalized sports betting while 35% were against and 10% didn’t know or declined to answer.

These results mirror a previous poll for the Washington Post but the Seton Hall poll also showed that Americans believe (by 48 to 42 with presumably the same 10% not having an opinion) that legalized sports betting will “negatively affect the integrity of sporting events.”

One commentator described it as a “troubling response” and suggested the poll indicates that American sports fans don’t mind if the games are fixed, as long as they can have a bet. I suspect that the correct interpretation is rather more mature than that: Yes, people want to be allowed to legally bet on the outcome of a baseball/basketball/NFL game, but they reluctantly recognize that betting on sports events inevitably brings with it the possibility of corruption and match-fixing.

Response reflects the reality

We wrote yesterday about corruption and match-fixing in tennis, especially in lower-level tournaments. Legalizing sports betting, just like the casinos in Louisiana, isn’t simply about revenue and boosting local economies.

It is going to bring with a host of other problems for the legislators and the integrity units to deal with. We can be certain of the integrity of Super Bowl LIII in Atlanta on February 3, 2019. A minor-league basketball game in a far-off state on the same day might be another matter.

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