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TALLAHASSEE (FBW)—Casino-style gambling under
consideration by the Florida Legislature to balance the state budget actually
creates more governmental costs than tax benefits an expert in gambling
economics told a House panel March 27.
Drawing on studies across the United States and Canada, Earl
Grinols, distinguished professor of economics at Baylor University, told the Select
Committee on Seminole Indian Compact Review social costs to the government
resulting from casino gambling is three dollars for every dollar generated by
Grinols, who noted that his research is
independent—not funded either by pro- or anti-gambling organizations,
testified before the panel at the invitation of Rep. Bill Galvano
(R-Bradenton), chairman of the Select Committee.
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“If gambling had no social costs your committee wouldn’t
need to exist. It’s just another industry. It’s entertainment, so let people
entertain themselves. But it does affect more than just the gamblers
themselves,” said Grinols, author of Gambling
in America: Costs and Benefits.
“The bottom line is the social costs are greater than a 3
to 1 balance. So, casino gambling simply doesn’t pass the cost-benefit test,”
Grinols, who has offered expert testimony to state
legislatures and served as a senior economist with the Council of Economic
Advisors under President Ronald Reagan, said a Canadian study found that nearly
half of revenue generated at casinos are from problem and pathological
Contrary to claims of some advocates, a significant
percentage of gamblers—as high as 70 percent—are “convenience”
gamblers residing within 35 miles of the facility, rather than tourist or
“So you’re getting the money from locals and you’re getting
it from the wrong locals and that’s just an inescapable fact at casino-level
gambling,” he said.
Grinols cited examples of the consequences of gambling,
noting newspaper articles about victims of suicides, embezzlement, bankruptcy and
other social ills resulting from persons entrapped by gambling.
“These are very real costs, they’re not something people are
imagining,” he said.
Grinols presented a long list of crimes, pathologies and
social problems in which Nevada—home to gambling mecca Las Vegas—is
first or among the leaders in the nation, including first in
suicide—double the national average, divorce, gambling addictions, women
killed by men, child abuse deaths and per capita bankruptcy.
While the national crime rate has generally declined in
recent years, even during a expansion of casino gambling, Grinols said his
research has found that the crime rate of counties with casinos has decreased
considerably less than those counties without casinos, and the impact of
casinos on crime typically takes three years to start being manifested in the
Grinols rejected gambling advocates’ claim that crime
associated with gambling is related to the fact that the activity simply draws
large numbers of people.
His research compared crime at high tourist destinations not
associated with gambling—Orlando; Branson, Missouri; and the Mall of
America in Bloomington, Minnesota—to Las Vegas, a gambling tourist
Las Vegas’ crime rate is 1,040 percent higher than Branson
and 15.7 times higher than Bloomington, Grinols reported, although both destinations
draw far more visitors than Las Vegas.
Grinols said a similar pattern is found when comparing crime
rates at large tourist destinations in the National Park System to Las Vegas.
“So it’s not just a matter of number of visitors. It’s also
a matter of who is visiting,” he said.
Grinols said that if casino gambling was adopted across the
entire nation, the annual costs would be the equivalent to one economic
recession every ten years.
“If you’re thinking of casinos as a method of gaining tax
revenue, it’s a pretty poor choice,” Grinols concluded.
The Select Committee also heard public testimony about the
dangers of casino gambling from Evelio Silvera, a Florida native who spent four
years in Missouri leading a consumer watchdog group, Casino Watch.
Having recently moved back to Ocala, Silvera said he
empathizes with the difficult task faced by legislators attempting to balance
the budget, but insisted gambling will not solve the problem.
“You’re not the first state, the first group of legislators
that has come to a crossroad and had to decide whether or not the expansion of gambling
was the manner in which they were going to shore up their shortfalls,” Silvera
He said in the last five years California, Iowa, Nebraska,
Kansas and Missouri have expanded gambling seeking to balance state budget
while actually increasing budget deficits.
Silvera noted even the Seminole Tribe has admitted their
casinos are seeking to keep Floridians from traveling to gambling destinations
outside of the state, underscoring Grinols’ testimony that the casinos will
rely upon locals for their business.
“Floridians will have to lose for the state to take a small
portion of that,” he noted.