Florida, like most other states, is in a financial bind. Faced with high unemployment and a moribund economy, its leaders are searching for a way out of the economic morass. The governor campaigned for the creation of hundreds of thousands of jobs that have yet to materialize. In a fascinating political flip-flop, Republicans in the Legislature are advocating legalization of casinos in South Florida. I would hope our legislators contemplate several key issues before they cast their votes.
First, legalized gambling is incapable of solving the financial crises of states. Only Nevada derives a large portion of its revenue from it. In the '70s, New Jersey faced economic hardship and legalized a state lottery. Soon after it implemented an income tax. Lotteries are ineffective methods of revenue generation because they return half their income as prizes.
When New Jersey legalized casinos in 1978 in Atlantic City, the law stipulated that they have a minimum of 1,000 beds in an attempt to generate 50,000 construction and service jobs. And although 47,000 people are employed in New Jersey casinos, the state had to enact a temporary increase in the income tax in 2009 for people earning above $400,000. Its sales tax was increased from 6 percent to 7 percent in 2006. Casino revenue in Atlantic City dropped by 30 percent this year, and sports betting might be introduced.
In fact, states can generate more revenue by raising fees on license plates or increasing the sales tax by a penny than through legalized gambling.
It is true that if enabling legislation mandated that casinos be constructed only with a large adjoining hotel complex, thousands of jobs in the construction and service industries would be created. And since no one is volunteering to create that number of jobs otherwise, some say we should proceed. But before Florida embarks on increasing legalized gambling, our Legislature and the public should consider these questions:
• What is the potential revenue that can be derived from casinos, and can it be sustained over time? How much can the state tax casino revenues, given the monopoly status it confers on private industry? (Surely far more than what was agreed to from the hastily crafted compact with the Seminole Nation, which would be abrogated by such a deal.)
• What would be the economic impact of increasing the number of casinos in Florida on:
1. the parimutuel industry, which is already dying a slow death, and;
2. other forms of gambling, for example, the lottery, which provides funds for education?
• How many and what kinds of jobs would be created by casinos, and of what duration?
• How would expanding casinos affect the tourist industry, most notably the Disney complex in Orlando?
• What would be the social impact of expanding legalized gambling on Florida's population? It is estimated that 1 percent of our population is prone to compulsive gambling. The costs to individuals, families, employers and communities are enormous, as are the associated effects on law enforcement and social support services.
I believe people should have the right to choose to participate in gambling but only after these issues are thoroughly examined. Any government that chooses to endorse and promote an activity that can have adverse effects on the public is morally obligated to provide education, prevention and rehabilitation to ameliorate negative effects.
An essential step in contemplating expansion of legalized gambling is the creation of a blue ribbon commission to evaluate these and other issues before Florida embarks on an uninformed path that might create adverse consequences.
H. Roy Kaplan, who lives in Tampa, was a member of former New York Gov. Hugh Carey's Casino Gambling Study Panel, and author of "Lottery Winners," Harper and Row, 1978. He was the vice president of the Florida Council on Compulsive Gambling.