Yesterday New Hampshire lawmakers met for a deficit summit, the plan of which was to reach a decision on how to close a $295 million shortfall. One of the ideas proposed was a gambling expansion. Republican Senator John Gallus stated that gambling expansion “is a way to close the gap and not put it on the backs of property taxpayers.” He added that he doesn’t think they can “tax our way out  of this mess” and stated that the proposed expansion would not only add revenue without increasing taxes, but it would also create jobs.

Gallus wants an expansion of slot machines and casino-style gambling and a tax on the slots of up to 39%. This tax, unlike property tax, would be voluntary, since only those who play the slots or offer slots would be affected.

Some members of the House are unconvinced, though, and are concerned that they do not yet have an efficient regulatory structure in place. There is also a fear of corruption. House Deputy Speaker Linda Foster, a Democrat, said that New Hampshire needs to set up a more comprehensive enforcement system than the currently existing one before expanding gambling in the state. “This is a leap into a much more serious kind of gambling,” she said. “I don’t feel it is something that can be turned on a dime.”

The deadline for the House and Senate to come up with a compromise plan to deal with the budget deficit is tomorrow. It seems unlikely that they will reach an agreement on gambling expansion by then. Other ideas, such as property tax increases and raising rates on power companies, are also on the table.

Australia’s Productivity Commission says that the federal government needs more control over the gambling industry. That shouldn’t come as a complete surprise. The Productivity Commission is an independent research and advisory board appointed by the Aussies’ federal government. So an entity appointed by the federal government and asked by the federal government to study the gambling industry finds that the federal government should run it? Hmm…

The Australian Productivity report on gambling has come out and they say that the federal government should take the regulatory authority away from the individual states and handle it themselves. They also advocate placing a 2% tax on all gambling revenue. The federal government could also offer “incentive payments” to the states to reduce their “reliance” on slots tax. Those payments are supposed to be to help wean the states off of gambling income rather than cutting it off abruptly, though some people see the idea as bribery.

All of that is troubling to people who advocate small federal government and local governments taking care of as much as possible for themselves. It gets worse, though. The report also suggests establishing a national player tracking system so the federal government can detect “abnormal or risky playing patterns.”

Gee, do you think that’s something that could be abused? The concept behind that idea is that Australian citizens are incapable of taking care of themselves and making sure they don’t spend too much money at the casinos. Therefore, the government has to monitor them and step in if they think the gambling is becoming a problem, if they are betting too much money, or just being irresponsible.

The new government system would allow the federal government to track all money spent on gambling by the citizens, how much money they spend, where they spend it, how much they win or lose, what games they are playing and more. The potential for this financial espionage to be abused is enormous. Of course, the government playing the role of Big Brother isn’t new. Look at their internet censorship history, which, though not as bad as China’s, is exceptionally bad when you consider that – unlike China – Australia is supposed to be a free country.

Here at Gambling Review, I support gambling expansion. However, I’m hoping that Australia’s federal government doesn’t listen to the suggestions of the Productivity Commission.

Efforts to expanding gambling in the Granite state will go nowhere. New Hampshire Governor John Lynch has been looking for an excuse to veto any gambling bill that winds up on his desk. Now he has one.

Last week, the state Senate passed an amendment that would expand gambling in the state by allowing 4 sites to have a total of 10,000 video slots. The amendment passed the Senate by a 14-10 vote – with bipartisan support – and was then sent to the House, where today it was voted down 212-158.

The amendment was introduced by Senator Lou D’Allesandro (D), who has been pushing for gambling expansion in the state for a decade. He believed that now was his best chance to get it passed, since the state is looking for ways to cut down on the $300 million budget deficit.

However, even if the amendment had managed to pass the House, Lynch threatened to veto the gambling legislation. He cited concern that an increase in gambling would lead to an increase in gambling addiction. Lynch, as a Democrat, loves deciding for people what is best for them and protecting them from themselves.

Before he could make any decision on gambling expansion, Lynch said the he wanted to look at the information that the Gaming Study Commission had been gathering over the last nine months. Yesterday, the Commission released a report that said “expanded gaming would generate additional revenues and economic activity, but it would also generate additional societal and economic costs.”

What a shocking turn of events! It turns out that the commission that was appointed by Governor Lynch and then ordered, via Executive Order, to study the impact on expanded gambling on the economy and public safety concluded exactly what Lynch hoped to find. That’s pretty convenient that the report said exactly what Lynch wanted to hear. It’s certainly good news for Lynch, who now has a good excuse to veto the amendment: “Look at the report! It says it will turn everyone into degenerate gambling addicts!”

People like Lynch think that people are incapable of taking care of themselves and need the government to protect them from things that could be potentially dangerous. I could waste too much money on video slots. Please ban them so I can’t spend my money! While we’re at it, this fast food I’ve been eating is making me fat and I’m worried about heart disease. Please ban fatty foods, salt, foods high in sugar and anything else that makes food taste good. Also, every time I get in a car, I’m worried about getting in a wreck and being thrown through the windshield. Can you make it a crime to not wear a seat belt?…Oh, you already did that? Thanks. Now that I have your attention, it’s time to talk about guns.

Many states that had previously been opposed to gambling are trying to legalize it now. As a recent Wall Street Journal article explained, such an occurrence isn’t uncommon. Tough times cause people to rethink their priorities. After all, if unemployment is through the roof and people are losing their homes and jobs, how important is a ban on certain “vices?” That’s a question each person has to answer. Some people say you should never compromise your morals, while others say that desperate times call for desperate measures. Maybe the truth is somewhere in between. Maybe during tough times people consider whether those things they thought were vices are really that bad.

Prohibition was repealed during the Great Depression, as was the ban on horse race betting. It was during tough economic times in New Jersey that Atlantic City voted to legalize casinos in 1976. In 2001, after the 9/11 attacks, New York expanded video gambling in their bars in an attempt to increase revenue.

Many counties across the United States have eased or are considering easing their restrictions on alcohol sales on Sunday. Twelve states have expanded or are considering expanding gambling as a source of additional revenue, including Florida, California, Colorado, Minnesota, Ohio, Iowa, Missouri, Kentucky, Maine, Massachusetts and New Jersey.

The state of Ohio marks the most drastic reversal on opinion regarding gambling. During the 1990’s and 2000’s, Ohio voters rejected plans to build casinos four times. The message was clear: The people of Ohio don’t want casinos in their state.

So what do they say now? Facing 11% unemployment and a state budget deficit of $3.2 billion, Ohio voters approved a plan to build new casinos in the state. The state’s current governor, Ted Strickland, has also reversed course on the gambling issue. In the past, he opposed gambling and called it a regressive tax on the poor, but in an attempt to ease the budget woes, he proposed an expansion of video gambling machines. Strickland was against building full-scale casinos, but signed the bill as a concession to the voters.

To his credit, Ted Strickland put aside the fact that he’s a Democrat and has made a lot of cuts in his state’s budget, including reducing spending by $2 billion, cutting 2500 government jobs, and slashing the budgets of most state agencies by 10-20%. However, he found that without adding additional sources of revenue, such as gambling, he would have to slash the agency budgets by at least 30%, which is something he wants to avoid.

It probably won’t surprise you to know what is accounting for most of Ohio’s budget problems: Medicaid and other entitlement programs. Though entitlement programs are a much bigger problem at the federal level, they are crippling states as well (especially California, but that’s another story). Margaret Thatcher once said that “the problem with socialism is you eventually run out of other people’s money.” Such is the problem with social entitlement programs. They are basically a Ponzi scheme that robs Peter to pay Paul. The problem is that they pay out more money to Paul than Peter pays in. If you are giving out more money than you have coming in, that puts you in debt. Such is the case with Ohio, most other states (38 are in the red) and the federal government.

Therefore, an expansion of gambling is a good idea as part of the fix, but it can’t fix the economy alone. There are many other changes that need to be made, with the main changes being to reduce spending and reform (or end) the entitlement programs. Unfortunately, I doubt Governor Strickland sees that.