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Legalizing gambling can come with high social costs

Published: Saturday, Sept. 1 2012 3:39 p.m. MDT

Resorts World Casino in the Bronx is the newest of 14 casinos New York allows to operate.

Kathy Kmonicek, Associated Press

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The thousands of people who pass through the Broadway-Lafayette subway station every morning on their way to work are offered an easier way to make money than the typical 9-5 job: the New York Lottery.

With phrases spelled out in letters made of cash, the ads promise New Yorkers they can win big. "Rolling in it." "Made of money." "On easy street." "Your butler has a butler." The message is clear: "Yeah, that kind of rich."

The 46-year-old New York lottery is the largest in North America and funds nearly 15 percent of the state's education budget, according to its website. And it's just one of New York's legalized gambling ventures. The state currently allows 14 casinos to operate, including the 10-month-old Resorts World in Queens, a 10-minute cab ride from the John F. Kennedy International Airport. It's an effort by the state to raise revenue and keep New Yorkers' gambling dollars in New York.

Cash-strapped states across the country are expanding legalized gambling to make easy money, but they might want to check their odds: only two of the 13 states that have legalized gambling in the past decade have met their projected revenues. And with increased competition and payouts that often fail to meet expectations, expanding legalized gambling might not be worth the social costs.

"It's an easy source of revenue," said Keith Whyte, executive director of the National Council on Problem Gambling. "As long as you don't look too close at the social cost, you can paint it to seem like money from nowhere."

But Whyte said he believes gambling as a source of revenue for states isn't sustainable.

"At some point, there's got to be saturation," he said.

Mid-Atlantic states have become a gambling hub in recent years. The Foxwoods casino in Ledyard, Conn., is larger in square feet than any casino in Las Vegas. Same with Mohegan Sun 14 miles away in Uncasville, Conn. Although Nevada remains the top state for gambling revenue, it's followed by Pennsylvania and New Jersey, and neighboring states are trying to carve out their share of revenue.

Maryland Gov. Martin O'Malley signed a bill Aug. 15 that, pending voter approval in November, would increase the number of casinos in the state from five to six and would legalize table games such as blackjack, craps and roulette. Currently, only slot machines are offered in the state.

"People were saying we were losing revenue because there were too many Maryland license plates (parked at casinos in other states)," said Maryland state Sen. Paul Pinsky, a Democrat representing Prince George's county where a new casino would be built.

Maryland's first casino opened in 2010. Since then, two more have opened, and another two are being developed.

Pinsky was one of 14 legislators who voted against the gambling expansion. While many oppose gambling for religious reasons, including the Southern Baptist Convention, which has previously called on political leaders to enact laws that would eliminate gambling, for Pinsky, it's not a moral issue but a matter of money.

"Long term, it's not a solution," he said. "Particularly if more states do it."

Maryland state Sen. Nancy Jacobs, a Republican representing Cecil County where the state's first slots facility was built, also voted against the bill.

"Here we are opening up four more casinos when we haven't had enough time under our belt to see what effect it'd have," she said. "Having a new casino open up isn't going to create new gamblers. If you look at it as a pie chart, it's finite. There's only so much to go around."

Jacobs said she has heard arguments about the social problems associated with gambling, such as increased crime, domestic violence and suicide, and she's concerned the revenue gambling is supposed to bring her state won't meet expectations.

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