Iowa’s gamble

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Iowa needs more casinos like it needs an income-tax hike on senior citizens and low-income wage earners. Oh, wait, they amount to about the same thing, don’t they?

The Legislature has gotten itself into royal mess with its insatiable appetite for the easy money gambling supposedly creates. Gambling is a loser’s game and smart legislators are beginning to realize that, even as they look for ways to bleed more revenue from it. It’s a quandary, with no easy way out.

Proposals to equalize the taxes paid by racetracks and casinos — a necessary step after the Iowa Supreme Court’s ruling — may not be as revenue neutral as originally thought. That leaves the state with a gaping hole in its budget, somewhere in the $20 million to $40 million range.

Look at what the state government’s growing addiction to gambling has done for the state and it’s difficult for legislators who oppose it as a revenue source to vote their consciences. Revenue from gaming operations has helped offset the costs of the Vision Iowa programs that benefit travel and tourism; Rebuild Iowa infrastructure projects such as state prisons, university buildings and other public facilities; environmental programs; health and education programs; general operations of state government; and — don’t forget this — treatment programs for problem gamblers.

Representatives from six Iowa counties — Franklin, Black Hawk, Palo Alto, Wapello, Webster and Worth — were on Capitol Hill last week talking up casino expansion as an economic development opportunity that would provide jobs, not merely more places in which Iowans can fritter away their money. They said that with a straight face, despite growing awareness that gambling is economic development only if it’s “new” money (not money diverted from other entertainment venues) or money that comes from out of state.

There are reams of studies supporting the belief that gambling’s costs to society are greater than its benefits. For example, in his 2001 analysis of gambling data from around the country, University of Illinois at Urbana-Champaign economist Earl Grinols said opening a casino eventually costs its host community 1.9 times more than its benefits. He put the yearly national loss at around $27.5 billion. That and other studies increasingly paint gambling as a zero-sum game, something state officials would learn if they put their own pencil to it instead of increasingly relying on research funded by the casino industry and gambling supporters.

It’s tempting to tell the rural counties they can have all the casinos they want if it keeps gambling out of downtown Des Moines. Opening a downtown casino would jeopardize other projects, such as the Principal Riverwalk. Principal Financial Group Inc., whose foundation has pledged $10 million to that project, has made it clear it would rescind that commitment if gambling expands to the central business district.

A proposal before the Legislature that would allow table games at racetrack casinos such as Prairie Meadows is less painful than increasing the number of casino licenses in the state. Gov. Tom Vilsack says he’s open to signing either piece of legislation.

It’s too bad that’s the most creative solution lawmakers can come up with to obtain the money to adequately fund valuable state programs. Selected tax increases would be easier to swallow. Oh, right, we’ve already established gambling as a voluntary tax on people who can ill afford it.