The United States of Gambling

A surprising fact: Gamblers spent more last year at commercial casinos in Indiana than they did at non-Indian casinos in all but three other states -- not surprisingly, Nevada, New Jersey and Pennsylvania. The 11 casinos and two racinos (horse racing tracks with slots) are the Hoosier State's third-largest source of tax revenues.    

Clearly, the idea that gambling is sinful has vanished in much of the heartland -- Iowa has 18 casinos -- and increasingly on the coasts. Or let's just say that the immorality attached to the activity and to preying on the working class, lonely elders and other vulnerable groups that flock to casinos has faded before the god of lower taxes. But that easy-come of living off gamblers seems to be vanishing as nearby states get in on the action.    

Indiana has relied on attracting players from neighboring Kentucky and Ohio. Kentucky still doesn't allow casinos, but Ohio has succumbed. The Horseshoe Casino in Cleveland just opened, the Hollywood Toledo is about to debut, and the Horseshoe Casino Cincinnati is a mere year away. Like Indiana, Ohio sits just over the river from Kentucky and will be competing for its gamblers. As result, Indiana expects to lose about $100 million of the $800 million it had been collecting in gambling tax revenue.    

And that's the casino story. In the beginning (the Great Depression), there was only Nevada. After five more decades, New Jersey let in casinos to bring ailing Atlantic City back to life. New Jersey is now losing customers to Pennsylvania. And as California becomes home to big new Indian casinos, Las Vegas will lose business, as well. More than half the states currently have casino gambling.    

The Foxwoods Resort Casino in semi-rural eastern Connecticut is the biggest casino in our hemisphere. The Mohegan Sun casino 14 miles away is the second-largest casino in our hemisphere. When Mohegan Sun opened, some envisioned the two tribe-run casinos eating into each other's business. But they both did well because the bordering states of New York, Massachusetts and Rhode Island didn't permit casino gambling. Players from out of state have provided about half the $6 billion of gambling taxes that have gone into Connecticut's coffers since Foxwoods became a full-blown casino 20 years ago.   

Last fall, New York state opened a casino at the Aqueduct racetrack in Queens. Gov. Andrew Cuomo seeks to build a hotel and a giant convention center there. Meanwhile, Massachusetts recently passed a law allowing three major casinos. And Rhode Island's slot parlor on a former greyhound racing track has significantly cut into the Connecticut casinos' business. Slots are where the big money comes from, providing over 70 percent of gambling revenues at most casinos.    

To keep up and add sexiness to what resembled a giant shopping mall in the Connecticut woods, Foxwoods built a new luxury hotel project. MGM Grand at Foxwoods opened with 800 new rooms, 1,400 more slots and a theater seating 4,000 -- just in time for the 2008 financial meltdown. Foxwoods now owes its lenders a burdensome $2.3 billion. The enterprise could consider restructuring the debt, except it remains unclear whether a casino on sovereign tribal land can avail itself of federal Chapter 11 bankruptcy.    

As gambling becomes widespread, clearly more of the money comes from locals. That is money the same people could have spent in other parts of the economy. Some state officials argue that with casinos flashing lights smack across their borders, they must already cope with the problems and costs of gambling, so they might as well enter the game. They may have a point, but it's a shabby scene nonetheless.   

COPYRIGHT 2012 THE PROVIDENCE JOURNAL CO.

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