Monday, August 21, 2006

Gambling's Road to Nowhere

Nobody but the house wins from gambling; seldom do gamblers win, even in the short run and virtually never in the long run. Like a fisherman who will tell you about the big ones he caught, but seldom about the entire days spent in a boat, or on the bank, without so much as a nibble, in my experience gamblers are notoriously poor bookkeepers when it comes to recording losses with the attention to detail they bring to their winnings.

Those are the losses we know about -- and they exceed $1 billion a year for Iowans.

But economists talk about what they call "externalities" -- the costs of any enterprise that are imposed on those outside the transactions, the costs that few tally up, the costs that are seldom assessed against the firm that caused them.

With gambling casinos externalities include such things as a community's "infrastructure" costs for roads, water and sewer lines, and so forth. The increase in crime requires an increase in law enforcement expenses. There are the programs to assist the gambling addicts and problem gamblers who want treatment. There's the increase in bankruptcies, domestic violence, and divorce.

To this well-known list we've now added another. I'll let Johnson County's outstanding Supervisor, Rod Sullivan, tell it in his own words:

"A very unfortunate situation has occurred in far southern Johnson County. A gravel road named Harry¹s Road that used to run between Johnson and Washington Counties has been closed by the City of Riverside. Riverside closed the road so that the new casino¹s golf course could be built at that location.

"Now for the unintended consequences. Three years ago, Johnson County approved a sand plant for River Products Company that accesses Harry¹s Road. The intent of River Products was to extract sand, then send their trucks south (into Washington County) to Highway 22. This made sense to them and to the Board.

"Once Riverside closed the road, River Products was forced to come up with an alternate plan. Now the trucks will have to go north on Harry¹s Road, turn onto Oak Crest Hill Road SE, and proceed north. Farmers in the area face similar hardships.

"Harry¹s Road is narrow, hilly, and curvy. The intersection with Oak Crest Hill is not adequate. Neighbors now have to deal with sand truck traffic trying to pull on and off a 55 mph road, right below the crest of a hill. The situation is unacceptable, but there is little anyone can do.

"River Products has permission to operate ­ period. Johnson County did not account for this road closing in the terms of their conditional use permit. River Products has agreed to improve Harry¹s Road, but they are not willing (nor required) to spend the millions that should be spent to properly
correct the situation. Johnson County does not have money budgeted to correct the situation, either. Needless to say, neither the casino nor the City of Riverside will put in a dime.

"So, who gets the raw deal? Everybody BUT Riverside and their casino. Oak Crest Hill Road SE gets traffic it shouldn¹t have; neighbors get truck traffic they shouldn¹t have; River Products gets added expenses they shouldn¹t have.

"Soon you¹ll be hearing about all the good things the casino brings to our area. Remember that there are plenty of hidden costs."

[This passage is reproduced from "Sullivan's Salvos," August 20, 2006. "Sullivan's Salvos" is available as a public service, an email-distributed free publication from Rod Sullivan:]

There's no way that Iowa can gamble itself into economic development and prosperity. Gambling casinos are just a way of taking money from those Iowans living within an hour or two drive of the casino and handing it off to wealthy casino owners -- at best just moving the money from the many to the few, at worst taking the money out of the Iowa economy and giving it to financial interests in other states.

A few of the costs called "externalities" I've mentioned above. There are more.

But Supervisor Sullivan has now identified another category of costs as well; costs that result from the heavy hand of political power when it moves into a small town. We've already seen it in the form of the casino and rain forest promoters speaking of how they want the supposedly independent Foundation to allocate money intended for the local community into the rain forest instead. Apparently they feel they have an entitlement to redraw the road map of Johnson and Washington counties as well.

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