Would “Destination Resorts” in Georgia boost our Economy? Don’t Bet On It.

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Georgia Representative Wes Cantrell serves as Young Adult Pastor at First Baptist Church Woodstock and has served on the GBC Public Affairs Committee. In addition, he started First Priority in Metro Atlanta, which works to build networks of churches serving local schools and provide students a platform to share their faith.

By Wes Cantrell

House Bill 158 and Senate Bill 79 are the latest attempt by the gambling industry to invade our great state. This year’s attempt doesn’t even contain the word “casino.” A reporter from the AJC characterized the use of the term “destination resort” in place of “casino” as a desperate attempt to “put lipstick on a pig.” It’s as if legislators, the governor and the voters of Georgia will deem the bill less harmful if they are voting for “destination resorts” as opposed to “casinos.” Here are the top five reasons I am opposed to these 28 page bills: economic impact, crony capitalism, increased crime, bankrupting businesses and intentional addiction.

Economic Impact: An Emory Law School study shows that each slot machine or electronic gambling machine costs the state economy one job per year every year. Casinos do bring in new jobs but more jobs are lost than gained. Additionally, non-gambling businesses shun areas with gambling facilities, according to a University of New Orleans study of their own city. Furthermore, spending on necessities of life is redirected into gambling machines. One study showed that people around gambling facilities spent 10 percent less on food; 25 percent less on clothing; and 37 percent had raided their bank accounts in order to gamble. The socio-economic costs of legalized gambling are well-established at well-over $3 in costs for every $1 in new revenue to the government. Casinos cannibalize the local economy and hurt all businesses, but locally-owned small businesses especially! Georgia has worked hard to become the No. 1 state in which to do business – why “roll the dice” with our success?

Crony Capitalism: Proponents describe the “destination resorts” as free market, but in fact, they are the picture of crony capitalism. HB 158 and SB 79 allow for only two “destination resorts” (therefore, eliminating competition) around the state in specific zones (which is very political). The “destination resorts” will be highly regulated (larger government) and eventually be subsidized by the state (providing special tax breaks for special interests). Gambling interests have hired dozens of lobbyists to attempt to persuade elected officials to their way of thinking. Lobbyist expenditure reports on meals and direct campaign contributions to politicians show that they are “all in.” I believe in smaller more efficient government. These bills would make our state government even bigger with the creation of The Georgia Gaming Commission. I challenge everyone to take the time to read these bills and see how much bigger and more complex they would make our state government.

Increased Crime: While crime directly around casinos may actually decrease due to the increased number of security personnel casinos employ, research from Emory University shows that crime rates increase 10 percent every year in the communities around a casino. Do we really want more crime in our state?

Bankrupting Businesses: Areas within 30 miles of casinos typically see personal and business bankruptcy rates rise between 28 to 42 percent, on average. When someone gambles away their savings (and 37 percent of gamblers do raid their savings), it leaves them vulnerable when the next crisis hits. When bankruptcy occurs, we all pay – directly, by not getting paid for goods or services already provided and indirectly, through higher prices.

Intentional Addiction: MIT Professor Natasha Schull reported in her 2012 book “Addiction By Design” that people who follow responsible gambling guidelines made up 75 percent of the players but contribute only a mere four percent of gambling profits. That means 25 percent of gamblers provide 96 percent of the profits! Casinos feed addiction because they can’t survive without it. The addicts are often those who can least afford it, and it affects more than the gamblers themselves. It especially affects children whose parents or guardians get caught up in this addiction.

Don’t fall for the two big deceptions you will hear about this issue!

The first is that this is the only way to fix the ailing HOPE Scholarship fund. Not so. If anything, casinos will cannibalize the lottery. Gambling will hurt HOPE not help it!

Additionally, the Georgia Lottery Corporation (GLC) paid less than 25 percent of revenue to education last year. This percentage has steadily decreased from 35.1 percent in 1995. The bill which created the lottery requires the GLC to pay “as nearly as is practical” at least 35 percent of revenues to education. Had the GLC contributed 35 percent to education as they are required by statute to do (see wording below), it would have resulted in over $400 million additional dollars given to education last year alone. This is well above any of the rosy projections that gambling enthusiasts say their bills will give to education.

These bills say that there is a 20 percent tax on gross receipts. That tax money is then deposited into the “Destination Resort Trust Fund.” This money is then used to pay the Georgia Gaming Commission. Then only funds over $5 million will be transferred to the Georgia Lottery Corporation who is then supposed to distribute a percentage of the money to Hope and to other programs. How do we know that the GLC will distribute these funds according to these percentages since they haven’t done so with lottery proceeds?

Secondly, many politicians will cop-out and say that this is an issue the people should decide through a state-wide referendum. Normally, this is not a bad argument. However, in this case we are not dealing with a level playing field. The gambling industry will spend millions of dollars on TV, social networking and direct mail to convince Georgians that legalized gambling will usher in an economic utopia like our state has never seen. The other side has little, if any, money to spend on advertising.

A Quinnipiac poll was released recently that showed 62 percent of New Jersey residents say gambling has been bad for their state. Shouldn’t we learn from the mistakes of others instead of repeating them?

Don’t believe that this will stop at just two “destination resorts.” We are finding out that this legislation would open the door for Indian tribes who want to open casinos in Georgia as well. A lawyer for one of the tribes recently stated that Georgia was the number one target for their next casino location.

Governor Deal has said in the past that he will not support casino gambling. Let him know you appreciate it. Then reach out to your state senator and your state representative and let them know how you feel. Trust me – they are already hearing from the gambling lobbyists. Don’t wait until they’ve made up their minds. They need to hear from you now.

The Georgia Lottery for Education Act of 1993 – Page 13

(3) As nearly as practical, for each fiscal year, net proceeds shall equal at least 35 percent of the lottery proceeds. However, for the first two full fiscal years and any partial first fiscal year of the corporation, net proceeds need only equal 30 percent of the proceeds as nearly as practical.

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