Then, they employed about 30 people during the farm’s peak season. Now, the Walkers only employ about 15.
“We’ve taken a gamble thinking we would get this up to this point,” Ken Walker says about the racino legislation approved by the General Assembly in May. He says that, if the gaming expansion doesn’t pass, and horse owners and trainers continue to flee Illinois, he’ll lose about $100,000 just by staying in business this year, in addition to a loss of nearly $50,000 last year.
Slots, slots, slots
But while Illinois lawmakers and the horseracing industry focus on pairing slot machines with racetracks to keep the labor-intensive form of gambling afloat, University of Illinois at Urbana-Champaign professor John Kindt says that’s the last thing they should be doing. Kindt is the editor of the 2008-2010 United States Gambling Reports and teaches business and legal policy at UIUC.
He cites a 1999 report by the U.S.
National Gambling Impact Study Commission, which was created following a push by the now deceased U. S. Sen. Paul Simon, the father of Quinn’s handpicked lieutenant governor Sheila Simon. The commission recommended that “states should refuse to allow the introduction of casino-style gambling into pari-mutuel facilities for the pri mary purpose of saving a pari-mutuel facility that the market has determined no longer serves the community or for the purpose of competing with other forms of gambling.” In other words, adding slot machines to save unpopular racetracks is the wrong way to go, according to the commission.
“The new legislation is pushing slot machines. It’s all about the slot machines,” Kindt says, noting that electronic gaming machines like those proposed for racetracks are the most addicting, especially for younger generations. “People promoting slot machines are trying to misdirect the public, the politicians, to focusing on the wrong issues.” He says the discussion surrounding expanded gambling in Illinois is rife with red herrings – from agricultural funding and jobs to community development – that distract from what he says is clear-cut economic analysis.
In Pennsylvania, for instance, the purses may have increased with the introduction of slots to racetracks, but each year betting on actual races continues to decline. The Pennsylvania Gaming Control Board reports that the state’s total handle – the total amount wagered on horse racing – declined by nearly 25 percent from 2006 to 2009, from $974.8 million to $733.8 million. Each year, more and more of the purse money that supports horse racing comes from slot machines.
Kindt likens horse racing to videotapes that have now been replaced by DVDs and Internet streaming. “There are people who still want to play VHS tapes, but the world has moved on. VHS tapes are becoming obsolete. Horse racing in this country is becoming obsolete,” he says. “The only way they can save it is by going to slot machines.”
Illinois’ gambling legislation sponsor Lang
says he’s taken precautions to ensure that Illinois’ horse-racing industry doesn’t become totally reliant on slot machines. The legislation includes a measure requiring racinos to spend a portion of their proceeds on marketing the horse industry.
Kindt says that, for every $1 in projected revenue from slot machines, communities incur $3 in direct and indirect social and regulatory costs. “Should taxpayers be propping up nonproductive activities?” Kindt asks.
The 1999 gambling impact study conceded that opening a casino in a depressed area can bring in new jobs but not necessarily better jobs. The commission concluded: “There appears to be more of a shift in the types and locations of work than a net improvement in the local standard of living.” The study also found that the number of problem gamblers within a 50-mile radius of a casino is double that of those further away and that problem or pathological gamblers account for about 15 percent of the money spent on gambling.
Lang says studies don’t match the real-life experiences of communities that already host casinos. “I would be foolish if I said we won’t have problem gamblers if we have gambling, but we already have gambling in Illinois,” he says, arguing that Illinois’ problem gamblers are just going to other states to gamble and bringing their problems home to Illinois. “I am not persuaded, nor do I see any evidence whatsoever that additional gambling in our state will lead to a huge influx of problem gamblers.”
UIUC economics professor Fred Gottheil says a community encouraging casino development is the same as encouraging a drug dealer to set up shop. Both “industries” create economic activity, but both come with signifi-cant social costs.
