Monday, November 5, 2007

Josh Cohen Re: Slots

I'm a little late to the party here because Josh sent this out several days ago, but I get to these things when I can, and after my other priorities* are addressed.

(*My priorities:
1A. Family
1B. Mrs. Politics
1C. Work
2. Non-Blogging Politics
3. Friends
4. Bowling (I have my own ball and shoes.)
5. Blogging)

Here's is what Councilman Cohen has to say:

November 2, 2007
House Ways and Means Committee
Senate Budget and Taxation Committee

Dear Delegate Hixson, Senator Currie, and Members of the

I urge you to hold the line against slot machines here in Maryland.

As elected officials, I believe that one of our first
responsibilities is, as Hippocrates wrote, to “do no harm.” In other words,
whatever actions we take during our term of office, let’s not do anything to leave
our jurisdiction worse off than we found it. This is as true for protecting the
health of the Chesapeake Bay as it is for protecting the quality of life in our

Slots will do nothing to improve our quality of life. Their social
ills are well-documented. They encourage gambling addiction and lead to more child neglect, divorce, bankruptcy and broken families, not to mention prostitution, illegal drug use and organized crime.

Their economic ills are well-documented. They are a huge vacuum
that sucks up millions of dollars in disposable income, leaving less money to
support locally-owned small businesses.

To appreciate the impact of slots on local businesses, we need look
no further than the horse racing industry’s about-face. In the 1990s the industry
opposed casinos because they would lure betting customers away from the tracks.
Only more recently, when slots were proposed at racetracks, did the racing
industry become slots’ biggest cheerleader.

Just as the state regulates other so-called “victimless” vices such
as prostitution, alcohol and drugs, the state has every right to regulate and
restrict gambling. Not only does it have the right, it has the obligation.

The only reason the state is considering slots is money. But as
any small non-profit organization can attest, it is foolish and short-sighted to
go “chasing the money.” Non-profits and state governments alike need to stay true to their values and mission. Maryland is already a wonderful state with a
tremendous quality of life. It would be foolish and short-sighted to
knowingly start down a slippery path in which the state takes on a vested
interest in turning more and more of its own citizens into gamblers.

As elected representatives, we are hired by the people to make
tough decisions. I respectfully urge the General Assembly to “do no harm” and vote
down slots legislation in this Special Session. If instead the matter goes to
referendum, I hope the question posed will be a responsible one. Instead of a
partial question about support of slots in the abstract, the question should be a
responsible one about support of slots in one’s own jurisdiction.

Thank you for your time and consideration.

I would say that I generally support slots in certain locations, such as racetracks or places where Maryland Lottery products are sold. But this is more of a fairness issue and not a 'we need a budget solution' issue.

I would like to discuss briefly the idea that slots are economic vacuums that suck up disposable income..

Disposable income, or discretionary income, is what you have left after you pay all or your required expenses. So after you pay your taxes, your mortgage, your car payment, food, etc., you hopefully have some money left to save or spend as you wish.

Mr. Cohen makes the argument that slots will attract much of this disposable money, which will leave less for local businesses.

The point should be made that this is a social argument, and not an economic one. Slots are roughly the same economic engine as any other business. They are one option for people to spend their money. You could say that movie theaters, bowling alleys, restaurants, etc. are vacuums that suck up disposable income, and you would be talking about the same thing. (In the strictest economic sense, slots are probably a better economic engine than the average business, because jobs are created for police who have to deal with more crime, counselors to deal with gambling addicts, etc.) The vacuum argument neglects the full economic process. The places that have slots will need to hire more workers; those workers will make more money; the government will receive more tax income; and those workers in turn will spend some of their discretionary income on local businesses.

To say that slots represent an ill because they would take money from local businesses is perhaps true on net, but it is an argument for protectionism--for government intervention in the private market. I'm not fond of protectionism when it's this country's goods versus another's, and I really don't like the argument when you are protecting a local business against a bigger business that perhaps is headquartered somewhere else. Competition makes the economy thrive.

So, slots: fine. Reducing state spending: more important.

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