In a column printed in the Rockford (IL) Register Star, the president of the Illinois Gaming Machine Operators Association, Michael Gelatka, tried to argue that “Video gaming is good news for Illinois economy” 5/19/15. Is his understanding of basic economics really that bad? Or was that merely a lobbyist’s deliberate piece of self-serving disinformation?
“Robbing Peter to pay Paul” is not constructive economic policy. The economy only grows when wealth is created, when both parties to an economic transaction benefit. And, although gambling makes some people rich (e.g. casino owners and video gaming manufacturers), their gains are other people’s losses. Gambling does not create wealth. Real economic growth “lifts all boats.” Gambling is, at best, a zero sum game. This is economics 101.
(Although gambling may have some entertainment value, the damage done by gambling addiction and/or losing more than one can “afford to lose” goes far beyond the mere monetary loss.)
The primary differences between (legal) gambling and other taxes are that taxes collected via gambling are levied unequally, taking advantage of those with a problem, often ruining people’s lives, and gambling often makes the “tax collectors” rich.
(The above is a slightly revised version of a “Letter to the Editor” of mine printed in the Register Star on 6/2/15.)
"Sin taxes" are supposed to be used to discourage vice, not become a reason to promote vices like gambling or smoking (tobacco or marijuana).