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Expanded Gambling in Massachusetts

On the surface it sounds great.  More jobs, more revenue, more freedoms for the citizens of Massachusetts.  On the surface it’s a no-brainer that the State Senate should approve expanded gambling in the Commonwealth.  It’s hard to argue with creating 14,000 permanent jobs and about $400 million in revenue as “The Innovation Group,” a gambling research firm estimates would result from 3 casinos.   Even taking that estimate with a grain of salt (they do represent a lot of big casinos) it is still an impressive figure.  And, with unemployment at a record high and tax revenues down, why wouldn’t you do anything to turn the tide.  However, as is so often the case, the more you dig, the less clear things become.  

Casinos are just not as profitable as they used to be.  The Rockefeller Institute of Government released a study last year which showed an 8.5% drop in revenue from casinos in 2009 versus the prior year.  They noted that “Expenditures on education and other programs will generally grow more rapidly than gambling revenue over time. Thus, new gambling operations that are intended to pay for normal increases in general state spending may add to, rather than ease, long-term budget imbalances.”  Uh oh.  Not so rosy anymore! 

But, to really analyze this decision in economic terms, we need to look at the social costs that casinos create and compare it to the revenue that a casino would bring in.  We’ll use the $400 million number from The Innovation Group and deduct the 8.5% that the Rockefeller Group found. This way we are using a measure from a group that pro-casino activists like and a measure from a group that anti-casino activists like.   That leaves us with about $355 million in annual revenue for the Commonwealth with the creation of 3 casinos.  Calculating social costs is a very new field and there is tons of disagreement over how to do it properly.  But, a recent study in NH gives us some idea of what those costs might look like.  This study, commissioned by Governor Lynch and carried out by the  nonprofit research organization “The New Hampshire Center for Policy Studies” found that, with one casino, the total revenue for NH would be about $220 million while the total social cost (combined between MA and NH) would be about $288 million.  And that was for ONE casino*. 

It is obvious that having more than one casino will increase the social costs to the Commonwealth, but by how much?  Well, in order for this endeavor to be a profitable one for Massachusetts, the social costs resulting from 3 casinos would have to be less that 1.23 times that of one casino if we use the $355 million number and less than 1.39 times that of one casino if we use the full $400 million figure.  Not hard to imagine that at all.  So what does that mean?  Well it means that the social costs resulting from the creation of these casinos would actually be more than the revenue generated.  A net loss for the Commonwealth.

Admittedly these are far from perfect calculations, but it certainly illustrates the dramatic risk is pushing forward with these plans.  At a time where our economy is, at best, fragile, this level of uncertainty and risk could be big trouble.  All one has to do is look at the sub-prime mortgage mess to recognize the significant and far-reaching consequences that come from guessing wrong. 

With revenue numbers far from a certainty, the other argument casino supporters have is job creation.  Creating jobs, even low wage jobs, is critically important and, if I really believed that building three casinos would make a difference here, I would be more inclined to support the effort.  However, study after study has shown that job creation is not a foregone conclusion when tied to new casinos.  In fact, a study done by the New York Times found that 27 of 57 municipalities had, in fact, experienced a net job loss.  That’s almost 50%!    

In light of this, and other studies, University of Illinois economist Earl Grinols observed:  “Partly in response to negative perceptions, many in the gambling industry have promoted the idea that gambling is an economic development tool, creating jobs for depressed regional economies and revitalizing lagging areas. Gambling experts and even gambling spokesmen frequently suggest that such arguments are exaggerated or false, but their cautions are often ignored by elected officials who face pressures to do what they can to aid their communities and therefore want to believe that gambling will help. It is an empirical matter subject to a number of special factors as to how gambling affects a particular economy.” 

Finally, I haven’t yet touched on the impact that addictions can have on a family.  Not just in one generation, but in generations to come.  It is easy to find stories of addiction ruining relationships and costing families their security.  Is it worth taking this risk when, even if there is a financial profit, we are raising the chances for broken dreams and damaged families?

This is an issue I have struggled with for quite some time.  As a general rule I really like things that will create jobs and am, most of the time, opposed to the Government making our personal choices for us.  However, the crime and problems that so often follow casinos affect everyone in the community, gambler or no.  The government has a responsibility to look out for all citizens and, by making it harder to partake in a damaging activity, all citizens (both those who want to gamble and those who don’t) are being protected. 

Bottom line, the only thing we know about expanded gambling is that it will adversely affect the quality of our communities.  The economic measures are a gamble and, quite frankly, it is a gamble we can not afford.  One of things you always hear about responsible gambling is “only bet what you can afford to lose.”  We can’t afford to lose and, in many ways (i.e. the human toll gambling addiction takes on families) we can’t afford to win.  That is why, after many hours of decision-making, I have decided to oppose expanded casino gambling in the Commonwealth and hope you will as well. 

If you are so moved, call your Senator and have your voice heard.  You can figure out who your Senator is by visiting: http://www.mass.gov/legis/city_town.htm

*Note on costs: To this point there has been NO state study of the actual costs associated with passing this gambling bill.  Not a one.  The truth is we have no idea what the real cost would be and lawmakers have not taken the time to actually take a hard look at that very important issue.  It would be like picking taking a final exam without doing any studying.  Might you do well? Sure.  Are your chances MUCH better if you make some flash cards? You bet.

ELECTION DAY!!!

VOTE VOTE VOTE VOTE VOTE VOTE VOTE VOTE

Ok, with that out of the way, let’s take a look at some of the key races to watch today.

Virginia Governor’s Race: Creigh Deeds (D) vs. Bob McDonnell (R)
It is looking fairly likely that the Republicans will reclaim the Governor’s mansion in Virginia. This hard-fought and very expensive race has been trending McDonnell for the past two months. Looking at polls, if Deeds does in fact lose, he can point to three main factors that cost him this race.

1. The McDonnell campaign was perceived as much more personal. McDonnell was actually on camera in three times as many TV ads as Deeds was and this helped voters to get to know him and learn to trust him.
2. Obama, especially lately, stayed largely out of the race. As a result of that, and the fact that Deeds is not a great campaigner, the Democratic enthusiasm that we have seen in the last few VA elections ended up not materializing. Without that GOTV excitement, it is going to be very hard for Deeds to get the voters he needs to the polls.  Those ‘new’ voters who pushed Obama over the top and who have helped Warner and Kaine in the past are likely going to stay home.
3. A Washington Post poll indicates that more than 60% of VA residents think Deeds has run a negative campaign, while only about 35% think McDonnell has. This perception (even though it is wrong) has helped McDonnell to be portrayed as a man of the people and Deeds as a whiny politician. In politics perception is everything and this perception is one factor in costing Deeds the race.

MY ENDORSEMENT: Despite his uphill climb, I am endorsing Creigh Deeds to be the next Governor of Virginia. I appreciate his dedication to creating educational opportunities and his liberal stance on most social issues. McDonnell, quite frankly, scares me because I don’t know who he really is. In a 1989 thesis, McDonnell argued, among other things that “government policy should favor married couples over ‘cohabitators, homosexuals or fornicators;'” criticized the 1965 Supreme Court decision which legalized the use of birth control by married couples; and described working women and feminists as “detrimental” to a the family. Since then, he claims his positions have evolved (pointing to the fact that he “worked to include child day care in [1995 welfare reform legislation] so women would have greater freedom to work.” However, he also opposed an effort in 2006 that would expand the state’s nondiscrimination policy to include sexual orientation and, aside from the 1995 bill has done little, if anything, to signal a clear shift in thinking.  I can’t support someone who may (and probably does) still believe that discrimination is acceptable.

MY PREDICTION: McDonnell 55-45 win over Deeds.

New Jersey Governor’s Race: Jon Corzine (D) vs. Chris Christie (R) vs Chris Dagget (I)

Well this has been quite the nasty and intrigue-filled race.  On the one side, you have a Democratic incumbent – a business man – who has made misstep after misstep (including failing to deliver on promises to ease tax burdens) in the Governor’s mansion and is extremely unpopular in the state.  On the other side you have a former US attorney (appointed by George W. Bush) who is trying to make voters think that NJ is the only state having financial difficulties and is attempting to pin the responsibility of those financial struggles of the state on Corzine.  And, to complicate matters, you have an independent candidate who is polling better than most independents do in states like NJ (a high of 20%) and who is focusing his campaign on the economic woes of the state but, unlike Christie, offering real solutions.  Chris Dagget has shaken up this race to the point where his involvement may well cost Christie the race. 

MY ENDORSEMENT: Christie has been long on critique and short on ideas and I am never a fan of that.  This is a race that should have been much more lopsided in his favor, but he has failed time and time again to offer the real solutions that voters are demanding.  With him out of the way, it comes to down Dagget or Corzine.  I don’t agree with much of what has been written about Corzine being a complete failure for NJ.  He was Governor in an extremely challenging environment and I applaud his steadfast commitment to public education and his restructuring of the Abbott school funding formulas.  In addition, he has been a champion of the environment and has pushed for universal health coverage in his state.  However, this missteps are too large to ignore and, with an opponent as bi-partisan (not just in name, but also in action), accomplished and smart as Dagget, I want to suggest my NJ friends cast their votes for the Independent candidate in the race and elect Chris Dagget to be the next Governor of New Jersey.  With such a resistant legislature, Corzine may not be the best leader for the state – as a result a new voice may be needed if real progress is to be made.  I believe Dagget can be that leader and that new voice.   I don’t agree with everything he stands for, but I trust his ability to make the best decisions for the state and reform some of what ails NJ.  If elected, I have faith that Governor Corzine will make better decisions for the state than he has in his first term.  However, for the reasons discussed above, I am still endorsing Chris Dagget – not because he is an independent, but because he is the best person for the job

MY PREDICTION:  This race should have been a landslide win for Chris Christie.  However his ‘safe’ campaign, and the presence of Dagget to siphon off some of the anti-Corzine voters, will allow Corzine to keep his job and lead the state for another four years.  I predict a final tally of 42-40 in favor of Corzine with Dagget taking around 10% of the vote.

New York 23rd Congressional District: Bill Owens (D) vs. Doug Hoffman (C)

This has been one of the most interesting Congressional races we have seen in a while.  The Republican party put up Dede Scozzafava, a moderate Republican, as their candidate.  However, the conservative wing of the party was so opposed to her that many of them rallied around Doug Hoffman, the Conservative Party candidate.  With so much opposition Scozzafava made the decision, on Saturday, to drop out of the race.  Her removal caused the RNC to reverse course and endorse Hoffman, while announcing that Scozzafava was releasing her supporters to vote for Hoffman.  However, on Sunday, Dede released a statement, bucking her party, and announcing she was supporting Bill Owens (the Democrat) and suggested her supporters do the same.  This has become a clear race between a moderate candidate and an extremely conservative one and it has raised many questions with far-reaching answers.  If Hoffman can win, it will embolden conservatives across the country to challenge the moderate wing of their party and pull the party platform to the right.  If Owens manages to win (and become the first Democrat to hold this seat in more than 100 years) it will be a confidence-booster for the Democrats and will establish them as the party of the left AND the middle.  Either way, the ramifications will be extremely interesting to watch as we approach the mid-term elections.

MY ENDORSEMENT: No surprise that I am going to endorse Bill Owens for this seat.  However, I am going to let Dede Scozzafava tell you why.   “”I am supporting Bill Owens for Congress and urge you to do the same,” she said. “In Bill Owens, I see a sense of duty and integrity that will guide him beyond political partisanship. He will be an independent voice devoted to doing what is right for New York. Bill understands this district and its people, and when he represents us in Congress he will put our interests first.”

MY PREDICTION: I have no idea.  This race could go either way depending on so many different factors.  What will the turn-out be?  How will Scozzafava supporters vote?  Will they vote?  Can Hoffman rally the conservative base around him?  Can Owens tap into the moderate bloc and win their confidence?  If forced to chose, I think Hoffman will barely win, but I have no faith, whatsoever, in that prediction.

Other races to watch:

Boston Mayor: Thomas Menino (D) vs. Michael Flaherty (D)

            The most serious competition Menino has had since becoming Mayor, Flaherty has run a really good campaign.  However, Menino is too popular and too good to lose and should win by 20 points.  I do want to applaud Flaherty for bringing his primary opponent, Sam Yoon into his campaign – that action demonstrated a real ability to work with people you have disagreements with and made a strong impression.

Maine Votes on Gay Marriage:

            Voters will be going to the polls to try to repeal the law passed earlier this year allowing same-sex marriage in Maine.  If you live in Maine, please vote against the repeal so freedom of choice can be preserved.   

New York Mayor: Michael Bloomberg (I) vs. Bill Thompson (D)

            Uhh…like this will be close.  Bloomberg by 30.  I only put it here as an excuse for me to congratulate the Phillies on winning Game 5 and am hoping that one of Bloomberg’s once he is re-elected will be to watch the Yankees lose.

If you want more on all the races going on today, check out this great site in the New York Times.

REMEMBER TO VOTE TODAY

Who will replace Kennedy??

Well that is the burning question in Massachusetts and, really, the nation.  With Dems now one seat short of the magical 60 seats (which is an overblown idea if you ask me) and the fact that we haven’t seen an open senate seat in more than 25 years in Massachusetts, this is sure to be a fierce race.  Governor Patrick announced yesterday that a special election will be held on 1/19 with a primary on 12/8.  If you are interested in running, the full schedule is here.

Each Tuesday, between now and 11/24, I will profile the candidates running for their parties nomination.  Originally I had planned to do one Democrat and one Republican each day and I will, if enough Republicans run.  Otherwise, I will intersperse them or come up with some other way of talking about them.   Then, on 12/1 I will endorse a Democrat and a Republican which, my influence and reputation being what they are, will surely cause them to lose.  After the primary, I will probably turn Candidate Tuesday into Issue Tuesday and present a particular issue and feature the positions of each candidate on that issue for your education and, I hope, debate.   That is my plan…I hope you like it 🙂

Stay tuned for the first Candidate Tuesday…coming 9/8!!!