Consider carefully all costs of gambling in Wichita

Writing from Miami, Florida

In a free society dedicated to personal liberty, people should be able to gamble. But that’s not what we have, as in a free society dedicated to personal liberty, people wouldn’t be taxed to pay for the problems that others cause in the pursuit of their happiness.

How does this relate to the issue of casino gambling in Wichita and Kansas?

There is a document titled “Economic & Social Impact Anlaysis [sic] For A Proposed Casino & Hotel” created by GVA Marquette Advisors for the Wichita Downtown Development Corporation and the Greater Wichita Convention and Visitors Bureau, dated April 2004. This document presents a lot of information about the benefits and the costs of gambling in the Wichita area. One of their presentations of data concludes that the average cost per pathological gambler is $13,586 per year. Quoting from the study in the section titled Social Impact VII-9:

Most studies conclude that nationally between 1.0 and 1.5 percent of adults are susceptible to becoming a pathological gambler. Applying this statistic to the 521,000 adults projected to live within 50 miles of Wichita in 2008, the community could eventually have between 5,200 and 7,800 pathological gamblers. At a cost of $13,586 in social costs for each, the annual burden on the community could range between $71 and $106 million.

If all we had to do was to pay that amount each year in money that would be bad enough. But the components of the cost of pathological gamblers include, according to the same study, increased crime and family costs. In other words, people are hurt, physically and emotionally, by pathological gamblers. Often the people who are harmed are those who have no option to leave the gambler, such as children.

Quoting again from the study: “While this community social burden could be significant, its quantified estimate is still surpassed by the positive economic impacts measured in this study.” The authors are saying that the amount of money the casino generates will more than pay for the increased social costs. While it is likely true that the amount of money the casino generates is greater than the increased social costs, whether this analysis makes sense depends on what you mean by “generate.”

The largest components of the positive economic impacts are employee wages, additional earnings in the county, and state casino revenue share, along with some minor elements. Together these total $142 million, which is, as the authors point out, larger than the projected costs shown above. But this analysis is flawed. It assumes that salaries paid to employees somehow compensate for increased social costs. Employee wages don’t go towards paying the costs of treating pathological gamblers, as employees probably want to spend their wages on other things. Furthermore, the state casino revenue share is supposed to go towards schools. It is a huge mistake to treat employee wages as compensating for increased social costs.

The absurdity mounts as we realize that gambling is promoted by none other than Governor Kathleen Sebelius (and many others) as a way to raise money for schools. Often the figure quoted for the amount of money gambling would generate for the state is $150 million per year. But here is a study concluding that the monetary costs to the Wichita area alone would be a large fraction of that, and when you add the human misery, it just doesn’t make sense to fund schools with revenue from gambling.

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