Alexander Moreno Philosophy 11/17/11

Legalize Gambling in California

People don’t like gambling until they win, and people love money. The government doesn’t like gambling, unless they can tax it. People think of gambling and automatically like a trained gambler think of Las Vegas or Atlantic City. Gambling has been in America’s blood since before we were a country. All thirteen original colonies established lotteries to raise revenue. 48 states today that have legalized some form of gambling and have made billions of dollars. 43% of Nevada’s general fund is fed by gaming-tax revenue, which means casinos pump in $9 billion dollars of revenue annually for the state. California is no stranger to gambling, the Gold Rush set off a gambling boom in San Francisco where it replaced New Orleans as the center for gambling in the United States at that time. California must legalize gambling to raise revenue for its state deficit and to put that money back into its communities. California has always set new standards and exceeds expectations with its impractical views, but gambling has been left in gold dust. With billions of dollars to be made for the state, legalizing gambling in California and taxing it seems to be a more practical idea than to keep it illegal. With Indian gaming casinos and lotteries already here and flourishing, why wouldn’t California put a few casinos in cities to get itself out of debt? The state and its $19 billion deficit going into fiscal year 2012 needs a solution and a solution fast. The California state Legislature is in Sacramento playing the slots themselves, but the screen does not say bar-bar-bar but cuts-cuts-cuts. Money is won with gambling, but money is not always the benefit. The social benefits of gambling are underappreciated. The history of gambling and the idea of it in America has always been a controversial subject ever since its existence. At one time, playing the lottery became a civic responsibility. In ancient China, India, Japan and Greece all had lotteries. Even the Great Wall of China was partially financed by lotteries. Lotteries were a way to finance public works. Here in America, proceeds from the lottery helped establish some of the nation’s earliest and most prestigious universities such as Harvard, Yale, Dartmouth, Princeton, and William and Mary. In 1850 during the Gold Rush, both the state of California and its cities were licensing gambling establishments to raise money. San Francisco became the Las Vegas of the time; even the first slot machine was invented and premiered in San Francisco in 1865iii. Though, over time, public opinion quickly turned against gambling. The public viewed gambling as a vice and blamed it for whatever setbacks the community had. By 1860 all gambling in California was illegaliii. Although during the Great Depression, penny’s were pinched but people gambled as it was a way to stimulate the economy. Massachusetts decriminalized bingo in 1931 in an attempt to help churches and charitable organizations raise money. In 1931 Nevada legalized most forms of gambling because the Nevada Legislature was motivated to build on the tourism boom that was expected to generate from the Boulder, now Hoover, Damiii. There seems to be a pattern to gambling and governments since the beginning of civilizations. Whenever funds are needed, gambling has been a good source of revenue to cover those costs. Since the 1600’s, governments have used gambling and lotteries to their advantage to raise revenue. California needs to capitalize on this simple idea. California is in a financial crisis, and along with the crisis should be the legalization of gambling to help cover costs. The history of gambling in California has been lucrative.
Before the establishment of legal Indian gambling, many tribes experienced desperate conditions. Poverty and unemployment rates of American Indian tribes were the highest of any ethnic or racial group in the United States per-capita. Income, education levels, rates of home ownership, and other social indicators were among the lowest. The growth of Indian gambling has stimulated the reservations’ once stagnant economies, improving social well-being of many Indian tribes. Revenues derived from gambling have allowed many tribes to make unprecedented improvements in economic and social areas. Gambling revenues are used to support many tribal government services, including tribal courts, law enforcement, fire protection, water, sewer, solid waste, roads, environmental health, land-use planning, and other social welfare programs. The American Indians are generating their profits and putting it right back into their communities, and a small number of tribes have been able to distribute large per-capita paymentsiii. When President Reagan signed the IGRA, Indian gaming revenue skyrocketed from $100 million in 1988 to $24.9 billion in 2006. In 2010 it’s up to $28.7 billion.i The Indians on reservations have benefited from gambling worth billions of dollars, but the United States government only taxes in a fraction of that. Indians who do not live on reservation land have to pay taxes like any other American, but those who do live on reservations do not. The United States government has no right to tax any Indian on reservation land, funds must be offered to the state. The United States of America has cheated the American Indians out billions of dollars and hundreds of thousands of acres of land since settlers came from England, so taxing the casinos will only add fuel to a fire that has been burning inside the Indians since the beginning of America, and not to mention it is illegal. Some states have agreements or compacts with Indian Tribes to share profits from slot machines, or some other lucrative benefit. Indian gaming could not only benefit the American Indians but also the state. Connecticut gains around $200 million annually from slot machines in an Indian Casino.i There are three times as many slots in California as in Connecticut.i California can generate $600 million just by slot machines, just one of the many games a gambler can bet on. California needs to follow and legalize gambling. Objections were voiced over Indian Gaming but Congress supported it. According to the National Research Council, “The recent institutionalization of gambling appears to have benefited economically depressed communities in which it is offered” throughout the United States. Gambling may not be an Indian tradition, but it sure has generated a lot of revenue for the better of their communities.
California is in a financial crisis. It would seem that Mike Tyson or MC Hammer were in charge of this state considering of how much we are in the negatives. California’s deficit exceeds $19 billionii. “We are not looking for a bailout,” well Mr. Governor, you might need one, or gambling can be your savior. Not all gambling is illegal in California. Californians can choose from a variety of gambling opportunities, such as a state lottery, horse wagering, card clubs, Indian casinos and charitable gaming. Gambling is a $14 billion dollar a year business in California as measured by the handle, but these totals do not include Indian gaming as there are no reliable state-by-state estimatesi. The handle is defined as the total amount wagered. With California being the sixth largest gambling state, it does not have high stakes casinos, and that is where the money isiii. A casino is characterized by the offering of banked games. Banked games are where the house is banking a game and basically acting as a participant. That is, it has a stake in who wins. Since California does not offer high stakes banked games, they go to our neighboring state, Nevada, where Californians spend $9.5 billion each yeari. Californians have to travel to Nevada, making 14 million casino visits while otherwise they can go to their local casino and bet there, and most importantly, lose there and have California keep the earningsi. Las Vegas is a testament example of the powerful ability gambling to foster economic development. Because of gambling, Las Vegas has shown to have impressive job growth, and developed into a major city with a low tax burden that many state and local governments look at with envy. There are many positive reasons to legalize it in the Golden State. If tourists abroad had travel plans to go to California or Nevada to gamble, they would simply go to California. Local residents who used to travel outside of the region and gamble can now stay in the region. Gambling has been legalized to promote economic development of depressed area, with Las Vegas, Atlantic City, and New Jersey as being the most famous. Casinos in those areas created at least 40,000 new jobs for the state to taxi. Since gambling was made legal in Mississippi the welfare rate was cut by a third and the proportion of people receiving food stamps has falleniii. Putting casinos in small regions rather than larger ones may seem the smarter idea. The smaller the region is the more likely a gambling project will be a benefit to the region. This statement is true for the simple reason that the smaller region, the more likely the gamblers will come from outside of the region. That suggests that an urban casino will have a much different impact than a rural casino. A good place to build casinos in California could be Bakersfield, Salinas, or where the regions are hit most hard by the recession. Those cities can benefit from taxes and job growth in the area. California horse racing has also had a major economical impact, with the industry generating more than $3 billion each year for the tourism, agribusiness, and entertainment economies of California.
Gambling in California can benefit the state so much more than just money. California’s unemployment rate is hovering at 11.9%. Jobs are hard to come by, even with a good education or background. If acquiring a job is hard, keeping one may be even harder. Corporations as well as the states are cutting jobs. Teachers, most importantly, are losing their jobs due to budget cuts in California. Our children are bearing the load that the Californian Legislature should carry themselves. Per student spending in California public schools has fallen so deeply as a result of recent budget cuts that we now trail the rest of the country by a greater margin than at any point in the last 40 years. Student fees have more than doubled in less than a decade in the California State University and University of California systems and more increases are in store, while the 2010-2011 budget cuts closed the door to the CSU and UC for nearly 20,000 students. 20,000 students are now being told to get their education somewhere else because the state of California has no money to keep the teachers and classes. That is UNACCEPTABLE. California is estimated to be the world eighth-largest economy. It sure doesn’t seem like we do. If compulsive gamblers want to throw away all of their earnings, let them, its all going for the better of the state. Then again, winning is an amazing aspect in gambling. Gamblers gamble to win, not to lose. By having these opportunities for Californians, it gives them a hope or fantasy of maybe owning that Newport Beach home or yacht on their pier, while still helping out their government if they don’t win. A relative of mine won $38,000 playing Pai Gow, a Chinese poker game in El Dorado, Reno. She took home close to $30,000 after taxes. The player wins, and the state wins, not to mention other players playing on that table and the dealer, if the player is generous. When the state lottery has its winner, the winner is paid out after the state taxes, and even the vender who issued the winning ticket gets a percentage of that payout. Investing is a lot like gambling. Like gambling and insurance, it implies an uncertain reward, but in this case, the big difference is that the ones providing the service are the investors, who are financing companies and governments. With the recent bailouts of significant large and stable corporations of the time, the public has lost some trust in that system. Gambling is not a substitute for investing, but the same idea is there. The idea is putting faith in a system where one hopes the payout is a lot larger then what they put in. Now to some people, saying that gambling can provide health benefits may seem a bit crazy. Gambling has been shown to help older people and retirees drastically reduce their health problemsiv. Studies have proven that seniors who gamble aren’t as likely to suffer from depression, alcoholism, or bankruptcy as older people who don’t gamble, according to the University of Yaleiv. Yale also says gambling helps keep the minds of the elderly stay sharp and gives them a fun recreational activity to do. Though, the study is not reliable, but the results are the opposite of what researchers expected. Those who participate in gambling activities do so voluntarily and, in return, receive intrinsic benefits from their consumptioniv. Gambling can be exciting and socially engaging. For those who want to take risks, the propensity for risk associated with gambling may be both stimulating and challenging. So if you happen to be in a casino and looking at the same old man who’s been sitting in the same seat on the same slot machine for six hours, don’t bother him. He is helping his health by stimulating is mind, while smoking a cigarette.
According to one report, there is little reliable information on the social and economic impacts of gambling. A great deal of research does exist, but often it is prepared by groups advocating one position or another and is biased or suffers from such basic flaws as to render it virtually unusable. In short, much of what has been done is not sound. One thing is for sure, gambling can be a powerful economic development tool. Las Vegas is a testament of the powerful ability of gambling to foster economic development. Because of gambling, Las Vegas has shown impressive job growth, developed into a major city with a low tax burden that many state and local governments look at with envy, and has spawned significant private and public sector investment. But can the Las Vegas model be duplicated? Building a casino creates new jobs, such as a card dealer, in the sense that they did not exist before. But they may not be new jobs for the economy. Money spent on a gambling facility is money that already existed but was spent on other things. That is probably an obvious point, but one that needs to be made. Building and running a gambling facility doesn't create wealth, it merely transfers it. The benefit for a region is if the transfers are from outside of the region. In contrast, there is not a stimulus or net benefit if development of the casino leads to more money being spent outside of the region.
With billions of dollars to be made for the state, legalizing gambling in California seems to be a more practical idea than to keep it illegal. Civilizations have used gambling revenue in a positive manner to help their lives. In 2008, California put Propositions 94,95,96, and 97 on the ballotv. All propositions affected Indian Tribe Casinos in California. All four were passed. Indian Casinos will now pay more money to the state of California General Fund, in return they received triple or quadruple number of slot machines. Let the Indians have as many slots and tables as they want, just as a long as California gets its cut. Californians are approving propositions for bigger Indian casinos but can’t build their own and benefit from their own? There are so many reasons to legalize gambling to ease our already ridden economy, especially putting more funds into education. After all, one day if gambling in California is legalized, I can tell my kids I gambled all of your college tuition, but no worries, it goes straight back into the state of California colleges. Just don’t go to Stanford, my money didn’t end up there.