The Fort Wayne Journal Gazette has an article on the State’s reliance on gambling revenue to subsidize taxes. The editorial commends the state on funding a treatment program with some of the proceeds but notes that the necessity of such a program is caused or exacerbated by the State’s legalization of gambling.
For my part, I think if the State is in for a penny, it should go in for a pound. Why be content to merely take a rake off the casino profits — why not have the State run the casinos directly and take the whole pie, reducing taxes accordingly? Normally you don’t want state run businesses — you want the private sector to be as innovative and efficient as possible. But I don’t think those policy goals really apply to gambling. I don’t think, as a State, we ought to be particularly enthusiastic about a booming gambling business that draws in more and more customers and convinces them to spend more and more of their money. So, I don’t think the normal free-market concerns about state-run businessess apply to gambling even though I’ll concede that private businesses would almost certainly deliver a better product more efficiently.
As for the moral concern, I’m reminded of the joke that ends with the punchline, “We’ve established what you are, ma’am; now we’re just haggling over the price.” We’re not somehow morally superior because the State doesn’t run the casinos and other gambling concerns directly. We’re just suckers for letting private business keep the lion’s share of the profit on this particular enterprise.
I should note that this analysis assumes that gambling is morally tainted activity but that we’re willing to allow it because of its value in defraying our tax burden. If it’s morally equivalent to other services, then obviously the State has no business creating a monopoly for itself; but then, if that were true, the State would have no business taxing gambling concerns more heavily than other service providers.
State run casinos would just be a way to make some citizens happier to pay higher taxes. Give them some razzle dazzle and some minimal chance of making a profit and the citizens will gladly put a little extra money in the State’s coffers. Charge an extra $20 on their property taxes, and they’ll be reaching for the torches and pitchforks. It’s not, apparently, that these particular citizens mind being parted from their money; they just want a little entertainment for their dollar.