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Gambling Issue a Target of Disinformation in Texas

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It is dismaying that on certain issues Empower Texans, which used to be a leading force in the fight for individual liberty and fiscal responsibility in Texas, has begun to take positions which seem more characteristic of a anti-liberty socially conservative agenda. One recent example of this is their position on the issue of legalized gambling in Texas expressed in two recent articles, one by Empower Texans founder Michael Quinn Sullivan and one by Austin-area blogger Michele Samuelson. These articles are timed to lay the groundwork for an argument against legalized gambling as we go into a legislative session where the issue is sure to come up.

It is disturbing to see a previously trusted advocacy group like Empower Texans and two activists who I have personal respect for resort to arguments on this issue which are both contrary to a basic belief in individual choice and personal liberty and based on gross factual inaccuracies which seems to come straight out of the press releases of anti-gambling groups underwritten by gambling interests from other states.

As a matter of principle, if you believe that people should have the right to determine what they do with their own money then you ought to support their right to decide to spend that money on any form of entertainment, including gambling. On a more pragmatic level, if every state neighboring Texas has legal gambling and millions of Texans and their money travel to these states to gamble, and those states are clearly not questioning the economic benefits of gambling, why should the government of Texas deny those same benefits to our citizens and businesses?

But let’s look at some of the specific misinformation being promoted by these articles at Empower Texans. Both articles repeat some of the same false claims and misinformation.

One of these is that gambling advocates promote gambling primarily on the basis of enhanced tax revenues from taxing gambling. This is an easy argument to dispute so it’s always the one which gambling opponents focus on, but it is not really a significant part of the arsenal of arguments in favor of legalized gambling. Of course, anyone who has studied the industry realizes that whatever tax benefits come from taxing gambling are offset by the cost of government regulation of gambling, and the more the state regulates the less chance there is of profit and tax revenue. As shown by the Texas Lottery, once the state actually runs gambling the profits go to fund endless bureaucracy and to pay contractors like GTECH which gets the lion’s share of the lottery revenues.

However, the real economic benefits of gambling come from its secondary effects. Despite the claims of opponents repeated in this articles, Gambling creates jobs and the more intensive and highly developed the gambling environment the more jobs it generates. A study from the Federal Reserve in St. Louis shows that resort casinos are particularly effective in generating new employment and revenue for local communities. Casinos employ a lot of people, they build hotels which employ even more, and the gamblers they attract spend money on transportation and in other local businesses, plus the casino employees need housing, food and other services. All of these workers pay taxes and all of these businesses pay taxes, including taxes at an inflated rate from the hotels. This revenue mostly does not go to the state, but it does go into the local tax base and has an enormous impact. It’s enough to take a depressed area like Gulfport Mississippi (Federal Reserve report on economic growth in Gulfport-Biloxi) and turn it into a boomtown overnight. Galveston is another Gulfport waiting to happen.

About Dave Nalle