Spreading out the casino scam

"Gwendolen at the roulette table" – 1910 illustration with George Eliot's Daniel Deronda.

Adapted from Robert Whitcomb's "Digital Diary,'' in GoLocal245.com

After failing to improve the standard of living (well, loan sharks have done well) in southeastern Connecticut (a state whose government is swimming in red ink)  with their vast casinos, the MashantucketPequot and Mohegan tribes are pushing to build a “satellite’’ casino in East Windsor, Conn., making the pitch that this will reduce the flow of revenue to Springfield, Mass., where another casino based on wishful macroeconomic thinking is going up.

Let the cannibalization of casino suckers continue!  Surf a new wave of embezzlements and personal bankruptcies in Greater Hartford! Of course, the tribes are getting support from their local state legislators, who look to campaign contributions  before the next election.

The plan is for the Pequots’ Foxwoods and the Mohegans’ Sun to pay 25 percent of their gross slot-machine revenues at the new facility to the state so long as no other enterprise is allowed to have a casino in Connecticut. So much for the free market!

Chris Powell: Conn. to replace Mass. gamblers with its own

MANCHESTER, Conn.

With their joint venture to put a casino in East Windsor, Conn., to intercept potential traffic to the resort casino being built just over the Massachusetts line, in Springfield, the Mashantucket Pequot and Mohegan Indian tribes say they aim to save jobs for Connecticut and gambling royalty revenue for state government.

This isn't quite accurate. The real objective of the interceptor casino is to replace gamblers from Massachusetts who have been patronizing the tribes' casinos in southeastern Connecticut and who are expected to start gambling in Springfield instead. The Massachusetts gamblers are to be replaced in East Windsor with gamblers from Connecticut itself.

This change in the source of gamblers and revenue should bear heavily on the General Assembly's decision whether to authorize the casino in East Windsor. For it is one thing to draw money from Massachusetts gamblers and send them home with the consequences of their excesses and addictions and their increased inclinations to rob and embezzle. At least then the money comes from out of state and the social burden is borne there.

It is something else to draw money from Connecticut gamblers and stick Connecticut with the consequences of excessive gambling. For if the casino revenue is to be drawn from Connecticut itself, it will come only from other commerce in the state, and the social burden of increased gambling will be borne here.

What then is the advantage of saving casino jobs in Connecticut if those jobs come at the expense of other commerce and jobs in the state? And gambling royalty revenue to state government cannot be fairly calculated without also calculating the expense of increased financial crime and broken homes and lives.

The casino racket is just about finished for state government. Connecticut has pushed its neighboring states into the business and now there's no one left to plunder but the state's own people. There's little profit in that except for the casino operators.

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 This is income tax week, and a new book by Vanessa Williamson of the Brookings Institution argues that Americans on the whole are "proud to pay taxes," considering it their civic duty to support their government. But on the national level, rather than the state and municipal levels, taxes are not really needed to support the government at all, since the national government has the inherent power of money creation and to finance its operations it does not need to borrow money or obtain gold or any other monetary commodity.

The purposes of taxation at the national level are quite different. In 1946 the president of the Federal Reserve Bank of New York, Beardsley Ruml, described them this way: "1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar. " 2. To express public policy in the distribution of wealth and income, as in the case of the progressive income and estate taxes. "3. To express public policy in subsidizing or penalizing various industries and economic groups. " 4. To isolate and assess directly the costs of certain national benefits, such as highways and Social Security."

That is, the purpose of federal taxation is to advance certain social and economic policies, to shape the people's behavior, and to allocate power in society. So while people justly can be proud of paying taxes on the state and municipal levels, where their taxes really do underwrite government, and while they can be proud of their country, on the national level their taxes are mainly the mechanism by which government controls them. On the whole those controls may be good ones but there's nothing particularly to be proud of in doing as one is told. Those controls are just the terms of the right to live in the country.

Chris Powell, a frequent contributor to New England Diary, is managing editor of the Journal Inquirer in Manchester, Conn.

Chris Powell: With casinos now everywhere, who needs Indian casinos?

 -- Photo by Ralf Roletschek 

MANCHESTER, Conn.

Casino gambling could make an argument in Connecticut a few decades ago when itcould prey on more people from out of state than on the state's own residents.  That is no longer the case, with casinos opening in neighboring states andthroughout the Northeast and with one soon to open in Massachusetts just overthe border in Springfield.   

Indeed, the "interceptor" casino now being proposed by Connecticut's twocasino-operating Indian tribes would prey exclusively on the state's ownresidents, diverting some of them from heading north on Interstate 91 to thecasino planned by MGM Resorts.   

With the "interceptor" casino the tribes would preserve the monopoly stategovernment has given them on casinos in Connecticut. The tribes would pay newgambling royalties to the state and millions in property taxes to East Windsor,  whose town government is supportive and where the tribes have secured land alongthe highway.   

The tribes say the "interceptor" casino will reduce the gambling revenueConnecticut loses to Springfield and preserve hundreds of jobs in the state.  More likely the casino will create a few hundred jobs and relocate hundreds morefrom the two Indian casinos in southeastern Connecticut as gambling trafficturns north.   

There are a couple of problems with this plan.    The first is that the pathologies of the increased gambling will be borneentirely by Connecticut itself -- the addiction, the theft and theconcentration of wealth, its transfer from the public to the government and thetribes and the weakening of nearby businesses.  

The second is that if casino gambling is to become pervasive, and not a specialthing in special places -- first Las Vegas, then Atlantic City, thensoutheastern Connecticut, then Indian reservations throughout the country, andsoon nearly everywhere -- why should Connecticut let any group monopolize it?  That is, for casino purposes, who needs Indians anymore? (Really, who ever did?)   

As New London Day columnist David Collins writes, last week the general counselof MGM Resorts, Uri Clinton, told a General Assembly committee that his companywill pay Massachusetts and Springfield far more for its casino rights thanConnecticut's Indian tribes are paying state government. That is, stategovernment continues to sell itself short for the benefit of the tribes.   

The MGM Resorts executive also noted that if it really wants to compete withcasinos in other states, Connecticut is forfeiting its most lucrativeopportunity, which is not near the Massachusetts line but in Fairfield County,  since a casino in Bridgeport, rejected years ago, might draw heavily from theNew York metropolitan area.   

Indeed, instead of opening a mere "interceptor" casino near Massachusetts, whynot open a full-fledged casino, entertainment, and sports venue in thenorth-central part of the state?   

After all, Connecticut just happens to have a bankrupt capital city whosedowntown is adjacent to both a big arena whose expensive renovations stategovernment can't afford and a new minor-league baseball stadium the city can'tafford. If such a venue could be competently operated, it might overshadow MGM'soperation in Springfield and push some of the burden of gambling's pathologiesback out of state.   

Instead of increasing gambling, it would be far better for state government toeconomize by questioning the premises of its most expensive, mistaken, andfailing policies -- government labor contracting, welfare and child protection,  and education.    But that would require more political courage than Connecticut has musteredsince the Civil War. If it can't bring itself to stand up to a few rent-seekingIndians, state government will never stand up to anyone else.

Chris Powell is managing editor of the Journal Inquirer, in Manchester,  Conn.