Pennsylvania Racino Essay

When Governor Ed Rendell defeated Mike Fisher in November 2002, most Pennsylvania citizens did not realize that the first major action they would see out of the new administration would be an attempt to legalize slot machines at racetracks in the State. The Governor claims that the extra revenue coming in from the slot machines would help close the massive budget deficit that Pennsylvania is facing. I will argue that the consequences, both social and financial, outweigh the benefits when it comes to legalizing slot machines, and it is therefore unwise.

There are four racetracks in Pennsylvania, and each of them, as have most racetracks nationwide, has seen their popularity fall off drastically over the last 30 years. Other states, including nearby Delaware and West Virginia, have legalized slot machines at race tracks, creating "racinos," as they are called. These racinos have been a smashing success, at least financially, providing hundreds of millions of dollars every year to State governments. Similar legislation has been drafted in Pennsylvania over the last 5 years, but did not pass because there was no urgent need for extra revenue.

However, Pennsylvania, as are most other states, is currently staring at a large budget deficit. This has caused many states to look more closely at racinos as a revenue source. Ohio, Maryland, New York, and New Jersey are also considering adding slot machines at racetracks. In Pennsylvania, Rendell supporters claim that adding 3,000 slot machines at each of the State's four racetracks will generate at least $500 million every year in additional money for the government. Racetrack owners are eager to convert into racinos, after seeing the financial windfall experienced in Delaware and West Virginia.

Opponents of racinos argue that the social damage done by gambling is staggering. Among the problems, addiction may be the most devastating to the individual and the most expensive to the government. It has been estimated in areas where gambling has been legalized that 0.5%₁, or one out of every 200 people become addicted to gambling. In Pennsylvania alone that represents 61,500 citizens. Taxpayers would most likely have to foot the bill for their treatment, therefore detracting from the revenue the racinos generate.

Another argument against legalized gambling is that studies have shown those most likely to gamble are the poor and the elderly. Is it morally right to close the budget deficit at the expense of those who need the money most? Racinos would widen the income gap between the rich and poor.

A financial argument against slot legalization is that studies have shown that in areas with legalized gambling bankruptcies rise almost 20% due to gambling. This leaves creditors with more bad debts, and the bankrupt individuals with a big financial hole to climb out of. Those with previous bankruptcies may have a difficult time getting loans for cars, homes, and other large purchases. Bankruptcies can be very damaging to Pennsylvania on both an individual and governmental level.

Many people associate gambling with crime. This, in fact, is not a baseless assumption. Statistics tell us that within three years, crime can rise by 10% in gambling areas, and may continue to rise after that. Desperate people who have lost it all might resort to means such as this to get their feet back on the ground. This not only presents a danger to patrons of the racinos, it lowers the quality of life for those living in the areas around the racinos. Crime-prevention costs might rise as a result, once again taking from the taxpayer's coffer.

Advocates of racinos suggest that without the extra revenue from the slot machines, public schools will be severely affected, since education is often a target when there are budget cuts. I see this as a threat to appeal to those people who would never consider gambling, but are horrified at the thought of the school system being harmed. Pennsylvania has been through recessions before, and it will go through recessions in the future. Budget shortfalls are a fact of life, but they can be dealt with in better ways than to panic and allow the social fabric of the State to be tarnished.

I believe that racinos in Pennsylvania would seriously damage social order, and that the problems created would lessen the positive impact on State revenues. Lawmakers must weigh the advantages and disadvantages before making an informed choice regarding this issue.

₁ All statistics in this essay are from the article "Slots a Bad Deal for Taxpayers, Economist Says" by Tom Murse. http://www.strongerpa.org/gamblingdamage/slotsbaddeal.htm