David Blankenhorn fantasizes about slot machines. Not about playing them. He wants to smash them with sledgehammers.
"I have this notion," he said over lunch near his Manhattan office recently, "of walking to Albany (New York's capital) smashing slot machines along the way."
In the end, he settled for a single smashing event in front of the state capitol. Blankenhorn is campaigning to stop a Nov. 5 referendum in which voters will decide whether to open seven new state-sponsored casinos, or what Blankenhorn, president of the Manhattan-based Institute for American Values and an outspoken gambling critic, calls "slotinos," since the bulk of the floor space and revenue now center on the flashy one-armed bandits.
One of Blankenhorn’s core arguments is that casinos draw most of their income from problem gamblers, resulting in a regressive tax that falls heavily on lower-class and elderly patrons.
Industry representatives insist that only 1 percent of adults tend to be problem gamblers.
“Gambling opponents have tried for years to put a number on what that percentage is,” said Judy Patterson, executive director of the American Gaming Association, “but there is no credible study that can identify that percentage.”
A recent New York Times poll found that 60 percent of New York City residents support casino expansion, but they are far less supportive of bringing casinos to their own city, with 42 percent favoring and 50 opposed. Residents of the city comprise 40 percent of eligible voters statewide.
Blankenhorn knows he will likely lose this fight in his own backyard, but he has his eye on the bigger picture. Nationwide, state-sponsored gambling has exploded since the 1980s, as voters and politicians embrace its promise of revenue without taxes. Today, only two states, Hawaii and Utah, have no form of legalized gambling, and the pressure for expansion grows each year.
A long legacy
Slot machine smashing has a long history, amply demonstrated in Blankenhorn's recently released 125-page report, "New York's Promise: Why Sponsoring Casinos Is a Regressive Policy Unworthy of a Great State." The report is a jeremiad against state-sponsored slot machines in his home state, punctuated with pictures of politicians from a bygone era destroying them.
One shows a fierce and sweaty Mayor Fiorello La Guardia in 1934, swinging a sledgehammer at a pile of machinery. In another picture, an entire barge bursting with slot machines leaves for the harbor dumping ground.
La Guardia wasn't alone. In another picture taken out West in 1939, off a fishing boat in California's Santa Monica Bay, four machines are captured in midair, one already splashing. The California dumping was spurred by then-Governor Earl Warren, another fierce gambling opponent on his way to the Supreme Court.
"Gambling is socially undesirable and it is also bad economics," Blankenhorn quoted La Guardia as saying. "A large part of this betting would have to come from people who cannot afford to lose."
"Because its goal is profit," Blankenhorn wrote in "New York's Promise," "not disinterested sponsorship of recreation, the house's only interest in the matter is getting me to place as many bets as possible and lose as much money as I can."
But in this case, the house is the state government. In Blankenhorn's mind, the state gambling institutions of today are little different from and little better than the mob bosses of yesteryear.
"The mobsters would go into the back room of the casino where the money was kept and stuff a lot of the money in suitcases. It was called 'the take,' and it was a hefty amount." The take was in return for providing financing as well as for protection and establishing territories.
Nothing has really changed, Blankenhorn argues, except today the take goes to government for providing the same services. In most states, the state take is substantial, on par with the mob bosses: between 27 and 50 percent.
It's naïve to think of the state as simply taxing the casinos, as it would a car wash or a deli, Blankenhorn said. The state is actually a full partner in the project and simply hires out the logistics of its share of the gambling revenue.
All of this points to a conflict of interest, as Blankenhorn sees it, when a state that is supposed to be protecting the vulnerable and even redistributing income downward instead sees its self-interest in exploiting the vulnerable and redistributing upward.
The gambling industry sees itself as a responsible entertainment provider, offering good clean fun for most patrons and taking pains to help the few who cannot control their behavior.
The industry has spent millions funding the National Center for Responsible Gaming, which funds peer-reviewed studies on problem gambling.
However, as the gaming association's Patterson said, “It is very difficult to know what somebody’s income is, how much they are gambling in one facility or another facility, whether they are using a players club card or not. It’s purely someone’s imagination what theory they want to use to come up with a number.”
With all the millions of dollars invested in research, why are the demographics of casino revenue so opaque?
Patterson said survey research cannot get to the issue, because asking patrons detailed questions would be off-putting. The National Center for Responsible Gaming funds all kinds of research, she noted, but “has never received a proposal that has been able to pass peer review because there is no scientifically justifiable way to go about it.”
The gambling industry knows its customers like no other, Blankenhorn said.
"They are anything but indifferent. The first thing you do is go to the welcome desk, and they will give you a card with your name on it, and every time you stick the card in the slot machine, it says, 'Hello, David!'"
On that loyalty card, the casino "tracks with great sophistication every interaction you have with the casino." The card tracks the machines you play, the times you come, how long you stay on a machine. The casino offers perks through the card, and while it is theoretically possible to use cash on the machines, Blankenhorn said he never has seen anyone doing so.
In short, he argues, the notion that the casino does not know the ages and ZIP codes of their heaviest users is ludicrous. “And if they know the ZIP code then they know the socioeconomic status. And if they pretend they don't know ... what does that tell you?
"You can ignore these things, but it is not a matter of dispute among scholars that between 35 and 55 percent of the casino revenue in America comes from problem gamblers," Blankenhorn said.
Twice a week
In his Dantean tour of gambling hell, Blankenhorn spent a lot of time in Mississippi, his native state and the queen of state-sponsored casinos. Once he was standing in line at a Mississippi casino and chatted up an older woman next to him. "Do you come here often?"
"I usually come here twice a week," she said.
"Why is that?"
"Because on Tuesday nights and Thursday nights I get emails from the casino telling me that if I come in during certain hours I'll get $10 of free slot play. So that's when I come in."
The woman in line also represents another beef Blankenhorn has with the industry. A frequent claim in siting casinos is that they will be "destination resorts," he said, evoking the casinos of yore in Las Vegas and Atlantic City, where tourists would travel great distances once a year to play and then go home.
Today's casinos are sited and marketed to regular, local users, Blankenhorn said. This proximity dramatically changes the risk of problem gambling and makes it all the more urgent that state governments collect data on who is driving revenue.
Father vs. son
Blankenhorn has set himself up as a gadfly, a lonely voice in a world where elected officials on both sides fall over themselves for free money from state-sponsored gambling. It's a different world from a generation ago, when elected officials on all sides shunned gambling.
Besides La Guardia, another star witness for Blankenhorn's indictment is Mario Cuomo, also a legendary former New York governor and also a fierce opponent of state-sponsored gambling.
Bringing casinos to New York, Cuomo told the New York Times, "doesn't generate wealth; it just redistributes it."
Not coincidentally, Mario Cuomo is the father of Andrew Cuomo, the current governor and an avid chief backer of casino gambling. Blankenhorn is playing off the father against the son.
And in drawing that contrast, he is quick to note that the pro-gambling politicians of today never have their pictures taken with slot machines.
"Show me a politician who has ever gone to have their photo taken in one, who has ever had a ribbon-cutting ceremony, who has ever posed putting money in a slot machine, (saying) 'I think this is a wonderful thing for my community, and I want my picture in the paper standing next to these shiny new slot machines that I brought to my state to make us all happier and healthier.'
"You never, ever see that," Blankenhorn said, daring Gov. Andrew Cuomo to be the first.
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