For Those on the Center-Right, How Do You Feel About Government-Run Gambling?

I saw an ad on the Metro this morning from Econ4U.org, a project of the Center for Economic and Entrepreneurial Literacy (CEEL) ...

It got me thinking: gambling is one of those issues where there are two distinct opinions on the Right. Libertarians argue that all forms gambling should be legalized. Social conservatives argue that the negative externalities and social consequences overwhelm any argument for the freedom to gamble. Some states have extensive licensing for gambling (like Nevada and New Jersey) and other states have strict restrictions or prohibitions on it (Utah and Alaska).

Both sides have valid arguments on gambling itself. But what about government-run/government-monopoly gambling for the purposes of raising revenue for their general funds?

Last November, Maryland passed a ballot initiative allowing for government-run video lottery terminals to raise money for education. Gerald Prante and Alicia Hansen of the Tax Foundation wrote opposing views on government-run slots a day before the election. Prante argued for passage, saying that while "under an ideal fiscal system in Maryland, slots would be permitted to operate freely and the rate of return in the marketplace would be close to competitive," the current prohibition is an implicit tax and passage could eventually lead to a free market for slots. Hansen argued against passage, noting that any government-run gambling is actually a hidden tax that's regressive and non-neutral.

With many states in fiscal crises, lawmakers are looking for new ways to raise revenue. Aside from any of your feelings on gambling itself, how do you, as someone on the center-right, feel about government-run gambling as a way to raise revenue? I look forward to the answers.

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Not an easy division

between social conservatives who are opposed to gambling vs libertarians who are for it.  I'm in favor of  legalized gambling, with few restrictions.  Age restrictions seem to make sense.  On a similar vein, I'm very much in favor of reducing the drinking age to 18.  That's perhaps the stupidest law on the books today.  Both of these are things that done in moderation are fine, but of course can be taken way too far, which prompts prohibitionism.

But I definitely consider myself socially conservative.  I'm as sure of the righteousness of being pro-life as anything I can think of.  And I am religious.  It's just that I don't view such things as gambling and alcohol to be inherently dangerous.

IIRC

The reason the drinking age was raised were due to efforts of MADD and things like that, to lower the rate of alcohol-induced car accidents. It's a cost/benefits analysis. If you value drinking at 18 enough to accept extra deaths, then you're for it. If not, you're against it. (Or you're like me; I'm apathetic.)

drinking age isn't my problem about individual liberties

my current problem is standardized age of adulthood. I want a system where until you are 35, you can enroll in any of your gov't guaranteed 12 years of schooling, and before then, if you pass the tests that you understand contractual agreements, you can work to help your parents out.

Figure that might provide some insulation against temporary job loss.

As a libertarian...

...I don't like any government intervention (other than law enforcement against fraud, etc.) with respect to gambling.

This includes the unfair advantage Native American casinos receive in many states, as it kills local small business competition.

It also includes a government monopoly on gambling (i.e. most lottery systems).

BTW, I am not a gambler (other than infrequent $20 bets on a football games between friends).  I think I dropped $35 last time I was in Vegas and got most of it back.  I've only puchased one lotto ticket in my life -- and it was for a family member who had requested it.

gambling and the state

I think gambling should be legal, but not run by the state.  Insofar as gambling is addictive, it creates negative externalities; and insofar as it's government's role to ameliorate some of these negative externalities, it is completely contradictory for government to create the problems that it attemps to mitigate.  Government-run gambling creates perverse incentives, essentially no different from attempting to fund health care programs with tobacco taxes.  Instead, let gambling be legal, run by private enterprises, with oversight and perhaps a special gambling tax to cover the costs of the negative externalities.

Good post

While I am on the center left, I am fine with state-run gambling. It tends to bring in more than it costs to run it, and it's really the only 'voluntary' tax. You don't have to buy lottery tickets, after all.

the returns on it are so blasted low, though.

capital gains is another voluntary tax. you only gotta pay it if you sell stuff. and yes, the stock market is gambling. However, it actually has a positive rate of return, or at least used to.

Gambling in the PA context.

Fast Eddy Rendel decided that gambling was a good way to raise additional education money. Government-run slots was his specific policy option. In the end, not only did the process fail to net the expected revenue, it got really dirty, with contracts in the Philli area going disproportionately to corrupt state senator Vince Fumo and his associates. State-run gambling--regardless of what one thinks of gambling itself--is a horrible disaster.

Was that an isolated incident?

Or is it your premise that all state-run gambling will eventually be used for the wrong ends/corrupted?

so much of your money goes to advertising.

the pennsylvania lottery system ain't NEARLY as corrupt as the PALCB -- oh, my god! That is hideous. Trust pennsyltucky to screw things up so bad that not even Philly and da Burgh can compete!

Privatization is a worse evil than state-run gambling

Gambling is a vice

Gambling is a vice. I do not consider it the number one priority problem among the issues that have been undermining the moral/social/cultural health of our nation, but it is harmful to many individuals, families and ultimately the government itself. Government run lotteries were tried in earlier American history. They finally were abandoned due to widespread corruption and I suspect also due to the citizenry realizing the old truth that  "a gambler never wins [at least not permanently] and a winner never gambles."

so you're against 401ks too?

there's no such thing as a free money machine. everything comes with risk. gambling is a way to take high risk bets. stock market is just the same thing, except that we don't always evaluate the risks effectively.

Tax on stupid people

I am center right, somewhat libertarian but not foolishly so, and have no problem with legalized gambling operated by the private sector.  I do believe the negative externalities are very real and it makes sense to impose a dedicated tax on gamling enterprises to deal with those externalities.

I have two major problems with state operated lotteries and/or looking to gambling as a "voluntary" tax or pain free way of raising revenue. First, it makes no sense to me for government to compete with the private sector in any legal business.  The argument that government operated lotteries will somehow limit negative externalities or provide a more honest game  is specious.  If government can operate gambling enterprises, why not bars or strip clubs?  Second, gambling is basicly a tax on stupid people and hits hardest on those who can least afford it.  It is one thing to recognize that free people have a right to be idiots thatshould not be denied by government prohibitions.  But government should not facilitate or encourage stupidity nor cynically take advantage of it.  We could put an excise tax on cocain and raise a ton of government revenue.  How is raising revenue from gambling, beyond what is needed to deal with negative externalities, any more justified?

Good point about gov vs private industries

I'd kill the post office as well.

then some places in alaska would not only not have TV

nor radio, but also no mail as well. even junkc mail!

whether this is desirable or not is an open question...

I'm a supporter of urbanization :D

The extra pollution caused is probably offset by the amount of gas used in distance traveling lol

There is a price for living in a wilderness

I like and respect most people I meet from rural communities but am also getting very tired of the argument that taxpayers are somehow morally obligated to support every lifestyle choice by providing subsidized mail, phone, internet, air travel, roads, snow removal, emergency services etc.  At a certain point people need to either suck it up and move to town or accept the fact they will live without most "essential" community services. 

righteous. IMHO they can pay for their own damn roads

and other things that are not about civics (if they live on a highway, they get the trucker benefit. we can pay for trucking routes, no problem, they help everyone).

I'll trade mail for the internet, as that's where people get their info from, and use phone and TV for gov't communications and national security.

I think that emergency services ought to be a right, but timely emergency services are probably not. After all, if I'm 20 miles from a public road, I certainly dont' expect a helicopter there in under two days... [and yes, someone needs to pay for shit like this. i'm not addressing that right now]

Re: gambling to raise revenue

I'd consider myself a fiscal conservative, not a libertarian or strictly a social conservative.  With that being said, I am 100% against states using gambling as a means to raise revenue.

1 - My state, Texas, uses the lottery to help subsidize schools.  The reality is, the lottery only brings in enough annual revenue to break even and pay for itself.  Advertising for the lottery exceeded $66 million for the last biennium alone (I haven't looked to see what it is in the new budget).  The budget for bingo training (yes, this was in the state budget) was around $500,000, if memory serves.

2 - If gambling is relied upon as a source of revenue, it's inevitable that the state will have to encourage gambling habits in order to meet budgetary requirements.  Advertising would be concentrated in low-income areas (as it often already is). 

3 - You cannot guarantee you will meet budgetary requirements with something as arbitrary as gambling.  First, because you cannot guarantee "business."  Second, because as much as the libertarians hate it, the social argument against gambling is strong and doesn't necessarily need government promotion to succeed (the local First Baptist Church does just fine, you know). 

4 - I don't like sin taxes (i.e., an extra $5 cover charge for a strip club that goes to gov't - they tried to pass this in my state!), and I don't like playing off of behavior of questionable morality/usefulness in order to pay for gov't services.  If gov't can't operate sufficiently on ordinary taxation, then government is too damned big.

totally agree

Here in NC, they use gambling for "school funding" and most of it gets lost along the way. More importantly, the people doing the most regular gambling are the ones who can least afford it. The gambling advertising here makes it seem like you're silly NOT to gamble.

But, the realist in me figues the government will never cut spending, so i'd rather have gambling as a source of revenue than property taxes etc.

I think you meant...

"I'd rather have gambling as AN ADDITIONAL source of revenue than JUST RAISING property taxes etc"... because we'll always have property taxes to pay.  And the "realist in me" says that they will always increase no matter what.  Now we can just debate on the pace... :-)

The way that lottery law was passed here in NC was pretty sneaky though, don't you think XC? (I'm in NC too)

.................

My thoughts on Government run "businesses":  There may have been a time when they made sense (when the nation was just starting out), but that time has long gone.  Blurring the line between business and government causes too many problems.  Oversight (insofar as to keep things fair, but not to manipulate outcomes) is the only logical position of the government.

Government run gambling: That's a very inefficient way to raise revenue.  On both sides of the equation (the government AND the gamblers).  But I'm all for allowing a private business to pursue the gambling "service" - and break up the govt & Indian Reservation monopolies.

govt run businesses are fine

within limits. nasa, okay. NIST okay.

I was thinking more along the

I was thinking more along the lines of the USPS, Fannie Mae, Sallie Mae, etc... and the State Board of (fill in the blank).  Within limits, as you say...

Do they all provide services to our society?  Yes.  Are they the best option available to do so? No (in most cases).

Government Run Gambling is the Worst

I tend to think that Government run gambling is the worst option available.

First, they are creating, and protecting, monopolies in gambling - this tends to lead to corruption, over pricing, etc.

Second, we expect government to police against fraud - which would be easy to do with slot machines, lotteries, video poker, etc. - but when government is a partner in gambling, who will police the police?