Will Casino's be the Saving Grace for State Deficits?
During our trip last week to Chicago, we observed the heated battle between voters and legislators over the Illinois gaming bill SB 1849. This would allow electronic gaming on shore in Chicago. In 1990, the Riverboat Gambling Act had already legalized gambling offshore in Illinois. Casino’s can generate as much as 15% in tax revenue to a city or state’s budget.
According to the Charleston Tea Party website, the Top 10 Worst States in Financial Condition include Illinois, New Jersey, New York, California, Ohio and South Carolina. The two graphs on their website analyze states in three categories: Worst Deficits, Worst Debts and Worst Underfunded Benefit Liabilities. Illinois is ranked number four with the worst deficit and Ohio is ranked number one with the worst underfunded benefit liabilities.
Not only is Illinois on a tear to capture this tax revenue to help fund their state deficit, Ohio opened four new casino’s in the spring snagging tax revenue from the bordering states of Indiana and Michigan. We see greed making a full circle even in the best states to retire. It wasn’t long ago when voters endured the heated battle in Florida, as to whether to allow lotteries and casino’s into Florida. There was intense debate over the negative impact casino’s bring to a new town and frankly, we never saw it materialize. While Florida is not Las Vegas, Florida casino’s have become ‘the’ best places to find top notch live entertainment and excellent restaurants such as found at the Seminole Hard Rock in Hollywood FL. It’s nice to see this money stay in the states instead of a spent a meer 50 miles away in the Bahamas.
Casino’s were at one time labeled an obsession for gamblers alone. Today, we see states who are in a financial crisis like Illinois, Ohio and New York hell-bent on bringing gambling into their states as quickly as possible, to help solve their state deficits with a new source of tax revenue. We'll bet Baby Boomer’s who are government employees are the first voters to jump on the casino approval band wagon, to protect their own financial interest and do you blame them? After enduring the dot com burst and real estate bubble burst during the last two decades, we can’t help but wonder if we will see in our lifetime a casino bubble burst from oversaturation.
Will people’s short term desire for decadence and opulence drain their long term retirement savings? Or will luxury casino’s in our neighborhoods become a smart way to tap into the affluent society’s excessive spendable income? We can be sure casino’s will be on top of their game knowing that they will have to offer the ‘best of the best’ to bring in the big spenders. In fact, it won’t be too far off in the future before the first person becomes a billionaire playing Mega or Power Ball. We imagine the IRS Treasury drooling over that potential tax income and we pray our government hasn’t spent it money already.
We think the Native American Indians are clearly having the last laugh as they dominate this lucrative business in America beyond the state lines of Nevada and New Jersey. We're not sure how you feel about casino’s in your neighborhood but can you see this tax revenue putting a dent in your state’s deficit? We invite you to share your thoughts, by leaving a comment.
