The upcoming general election for Governor is sure to bring the issue of casino gambling to the forefront yet again. There already appears to be some fracturing of the anti-casino GOP party-line stance when Republican primary candidate Bobbie Holsclaw called for the citizens of Kentucky to decide the issue via referendum. Surprisingly, GOP candidate David Williams’ running mate, Richie Farmer, publicly expressed the same sentiment.
In the 2007 gubernatorial campaign, then-incumbent Republican Gov. Ernie Fletcher took ownership of the anti-gambling argument and attacked then-Democratic candidate and current incumbent Gov. Steve Beshear’s desire to put the issue up for a general vote. A Fletcher television ad brought us Norma’s story, a woman who served 17 months in prison for embezzling $241,000 from her employer to feed her gambling addiction. This ad, and others, served as warnings as to the evils of casino gambling and how such facilities would tear apart Kentucky communities by destroying families and encouraging crime.
Oddly, he went all the way up to Waterloo, Illinois to film his commercial instead of hopping across the Ohio River from Louisville to visit Elizabeth, Indiana, a community that seems to have fared much better than the one depicted in Fletcher’s ads. Similarly, Williams claims expanded gambling is bad public policy (although he found casino gambling to be good personal entertainment and a generous tax write-off).
Half way across the world last month, the new Galaxy casino opened in Macao, the city’s 34th casino. Since the 2002 deregulation of the casino industry and break-up of the monopolistic casino concession, gambling revenues there have soared. Ten years ago, Macao’s casinos generated a fraction of the revenues generated by Las Vegas casinos; in 2010, Macao’s casinos produced combined revenues of $23.5 billion while Sin City revenues came in at $5.8 billion. As opposed to increasing crime, the Macaoan government—with a huge assist from the People’s Liberation Army of China—eliminated organized crime. Where there used to be gang wars, street bombings and sidewalk assassinations, there are now tourists enjoying the gaming and cultural attractions of Macao. In the past decade, the number of tourists increased from three million to 25 million. While this is certainly not a model that Louisville should pursue, it does show how one city has successfully cleaned up organized crime tied to gambling with a combination of free market opportunities and stricter law enforcement.
More interesting is what’s happening in Singapore, a no-nonsense city-state with draconian laws in place to keep peace and order. The same government that automatically sentences drug dealers to death, canes vandals with palm rattans and fines litterers S$500, is banking on casino gambling to support its MICE (Meetings-Incentives-Conventions-Exhibitions) industry. Despite opposition fearful that Singapore’s low crime rate would skyrocket, the government granted two casino licenses and both facilities had soft openings 2010. Tourism is up 20% since 2009, the year before the casinos opened, and the Singaporean economy grew by 14.7% last year, much of it due to strong inflows of tourism spending. Despite these two new casinos, the crime rate in Singapore actually fell by 0.6% in 2010.
So here we have two examples of expanded gambling. One city, notorious for crime, became the largest gambling mecca in the world and saw crime decrease dramatically, albeit with the help of an authoritarian government. Another city, legendary for its lack of crime, built two casinos yet saw a slight decrease in crime. One common denominator is increased tourism in both cities. Obviously, there are numerous other factors at play here, but the adage that expanded gambling will destroy families and increase crime may be significantly overblown. One would think that Kentuckians are no more predisposed to gambling addictions and ancillary criminal behavior than Chinese or Singaporeans.
Casino gambling is no panacea for what ails Louisville or Kentucky, but it sure would be a nice amenity to offer the local MICE and Horse-racing industries and would help keep in state much of the money that now flows into the coffers of Indiana, West Virginia and Ohio. Pressure to keep Kentucky gambling dollars in state is sure to increase with more competition on the way with Cincinnati, Columbus, Cleveland, Toledo and Chicago all planning to add casino gambling after either voter- or state Senate-approved initiatives.
And if nothing else, a public referendum would at least eliminate the irony of not allowing citizens of our commonwealth the ability to choose whether to gamble when the largest communist government in the world and the most paternalistic democratic government in the world allow their citizens this very freedom of choice.
