Monday, March 03, 2008

Doubling Down on a Bad Bet?

Mark Rogers notes that the new governor of Kentucky is ratcheting up an effort to open casinos in the state. Mr. Rogers encourages his own state of Tennessee to join in on the games, saying that it is crucial if the Volunteer state is to avoid losing entertainment dollars to its neighbor to the north. Perhaps he is right, but a few additional points need to be considered.

At some point, states are going to have to come to grips with their increasing reliance on this type of activity as an easy means of producing economic growth. Already, four states get over 10% of their revenues from gambling, and 17 get more than 5%. At some point, gambling will become sufficiently wide spread that returns will diminish. Additionally, one would think that eventually the novelty of putting tokens into slot machines will wear off.

Casinos are an option superior to state run lotteries primarily because they are not state run. Thus, states merely allow you to blow your money, rather than actively encouraging it. Nonetheless, it is not an economic activity that produces good paying jobs. One might well wish that the worm would turn on the trend toward its expansion.


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