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Getting Past the Rhetoric To Yes

24 November 2009 3 Comments

Remember Freakonomics, the 2005 book best-seller by Steven D Levitt and Stephen J Dubner? The University of Chicago economist and New York Times reporter debunked conventional wisdom by using the economist’s age-old tool of measuring incentive. What they uncovered surprised people, and, as is often the case with the truth, angered a lot of people. Among the truths they uncovered were that standardized testing incentivizes teachers to cheat and drug dealers are minimum-wage earners who with live their mommies.

For a couple of years now, we at The Observer have been digging into the conventional wisdom about casino gambling. Not surprisingly, most of the research is sponsored by people looking for a specific outcome on one side of the issue or the other. Although we don’t have Steven Levitt’s chops (or research budget), we share his skepticism about conventional wisdom. Here’s a little of what we’ve learned.

Casinos are not crime magnets. Open one in a dangerous place, and the place might still be dangerous. Open one in a place with a low crime rate, and the crime rate remains low.

Casinos are not magnets for the downtrodden. Many casinos have been opened in poverty- stricken zones as a way to lift the place up economically, and the results have been mixed. But the casinos are not the cause of poverty. In fact the poorest, most dangerous places to live in America have no casino gambling or betting establishments. Two of them, Washington, D.C., and Baltimore, Maryland, are nearby.

On the flip side, casino jobs don’t pay any better than similar jobs in a given region. Why is this? Prevailing wage rates are determined by labor supply. The more people you have looking for work, the lower the wages employers offer. And the economic multiplier effect of casinos is very difficult to predict, as it is with nearly any tourism-related draw. Even those Ph.D. folks who study the economic benefits of tourism argue continuously over their own methods.

So, if we strip away the rhetoric on both sides, here’s what’s left.

The establishment in question has operated in Charles Town since 1933. They seem to run a fine operation. Its appearance is clean and tidy, and the negative impacts forecasted with the opening of slot machines have not materialized. They’ve been responsive neighbors, too: Several years ago when Jefferson County residents complained about the use of searchlights over the county’s skies, the company stopped the practice.

Now they want to expand their business. There is no real difference between betting on horses, betting on slots, the state lottery, or a little ball at a roulette table. It does take people — employees — to run table games, and that’s a plus. The craps table alone employs four people at a time.

About gambling: It’s a legitimate recreation pursuit — just ask the millions of people who enjoy it. Our county’s heritage is rich enough, special enough to accommodate a range of tourism activities. In fact, some of the county’s most ardent preservation and conservation activists either support the referendum or don’t see it as a threat to our heritage.

No one likes the apparent collusion between the unimaginative politicians in Charleston and a big corporation. Let’s try to get beyond that. And no thinking person likes the idea that our state and each if its counties and municipalities are dependent upon lottery receipts and coal royalties to survive. Let’s all resolve to change that.

It’s tough enough to attract large employers to West Virginia. We have one that wants to expand their operation. We’ll vote yes to that.

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3 Comments »

  • David said:

    Great…Wish everyone was as level headed as you

  • Eric Lewis said:

    Thanks for endorsing and for Mr Lillard’s Wheeling story. Very nicely done. Its great to see folks realize the importance of a Yes Vote and be willing to lay it out there like you did. I was particularly impressed with the analysis of Atlantic City vs DC/Baltimore and Martinsburg. Really puts that into perspective and shows that the No side and all their scare tactics are way off base.

  • RonG said:

    Thank you Observer for a reasoned approach to what is basically a question of economics for the county. This issue just seems to have a way of bringing out convoluted arguments. I received Vote No literature today that warns of Charles Town becoming the next Las Vegas. I’m pretty sure that the comparison of a city with twenty or thirty or fifty gaming venues to one standalone establishment is really no comparison at all. Some horsemen seem to argue that their piece of the pie is too small. Is there another industry that gets an annual $40 million shot in the arm through purses? If one exists I don’t know what it is. Since the issue was voted on in 2007 we haven’t had any new major employers move into the county. Shepherd and American Public University probably have grown during that period as well as some retail outlets but certainly no one has brought large numbers of jobs to the county. As a pragmatist I’m having a hard time seeing the downside of this. I remember too well the last time a school levy came up for a vote where it seemed to pit families against the elderly who didn’t see a benefit, only a tax increase. As a homeowner in the county I’d be interested to know how different my property taxes would be if the track ceased to exist. Hopefully the track closing is not something we’ll experience for a long time.

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