As reported by: The Philadelphia Inquirer
Gov. Rendell's scenario of raising $1 billion from slot-machine taxes to fund property-tax relief appears very enticing to politicians and citizens alike across Pennsylvania. Why not let this "voluntary tax" help lessen the burden on homeowners? Why not help balance the state budget with gambling proceeds?

Good questions, deserving of factual answers. Slot-machine gambling has been around long enough, in enough states, to provide pertinent facts. Ignoring these facts will jeopardize Pennsylvania's finances and threaten school funding.

First, the likelihood of the state reliably netting $1 billion annually through slot machines is, at the very least, debatable. No state - not even New Jersey ($352 million) or Nevada ($730 million) - brings in close to a billion annually in casino tax revenue. The Rendell administration paid for a brief analysis from William Thompson, a professor at the University of Nevada at Las Vegas, who wrote that the $1 billion figure was obtainable. Thompson had also testified months earlier in Harrisburg that it was very unlikely. He added: "If the state is concerned about its economy, the machines will be very hurtful."

Nearly all the money will be coming from in-state. We will not have Las Vegas-style "destination gambling," where people arrive from elsewhere and leave their losses behind. Instead, Pennsylvanians must lose $3 billion at the 36,000 proposed slot machines for the state to gain its $1 billion.

That's equal to $750 in losses for every family in the state. Not a good deal in return for an average of about $339 in property tax relief that is not permanent or available to all. It's an average net loss of $411 for every Pennsylvania family.

Second, gambling tax revenue hasn't stanched the flow of red ink in casino states. In fact, the five states with the worst deficits this year (California, Nevada, New York, New Jersey and Illinois) are major casino-gambling states. If casino gambling was a budget-fixer, surely Nevada would be well in the black.

What happens is that states tie specific programs, such as education, to gambling taxes. When shrinking revenues inevitably fail to match the growing need, gambling is then expanded, and the state pushes its citizens to gamble more. This is occurring in West Virginia, Delaware and Indiana. Meantime, school districts and state governments face the challenge of coping with a volatile funding source.

Slot-machine gambling does pay dividends - in human misery. The National Gambling Impact Study Commission, created by Congress and President Clinton, found that casino gambling was a significant factor in family breakup, suicide attempts, substance abuse, domestic violence, white-collar crime and bankruptcy.

Behavioral scientists have determined that slot machines are among the most addictive forms of gambling because the gambler can quickly find out the result of a wager. It's difficult to call this "voluntary taxation."

Noted economist Earl Grinols of the University of Illinois calculated that the economic and social costs associated with casino gambling can reach $3 for every $1 raised in gambling revenues. This is yet another net loss for taxpayers.

An additional wild card is the prospect of Indian casino gambling. Lobbyists for Indian tribes are zealously pushing for casino rights in Pennsylvania and have won some prominent allies in Harrisburg. A federal lawsuit has been filed by an Oklahoma tribe claiming more than 300 acres in Northampton County to establish a casino there.

Some politicians in Harrisburg mistakenly believe that state law can govern such Indian casinos. However, federal law trumps on this issue, leaving the Indian sites virtually ungovernable by local or state law. Such facilities cannot be compelled to pay state taxes, or fund highway or traffic costs incurred by surrounding municipalities, and they can sell tobacco and alcohol tax-free. The only clear way to keep Indian casinos out is to not allow slot machines in our state.

Whether slots at racetracks, casinos in downtown Philadelphia, or Indian casinos, all inordinately hurt those who can least afford it: the disadvantaged and elderly. As a method of raising state revenue, it is hard to propose a more regressive tax - one that takes from the poor, provides limited relief to the more well-to-do, and enriches wealthy casino-owners.

Slot-machine gambling will fail to serve the public interest, will hurt the the poor and irreparably harm families, communities and the state. It is a false hope that must not be allowed to pass.