New research from the Texas Public Policy Foundation shows that while expanding casino gambling would result in a new source of tax revenue, it would come with a commensurate increase in associated social problems, such as gambling addiction, mental illness, and crime.
“As gambling itself has liberalized across the country in recent years, it is often attended by modest increases in tax revenues collected by cities, counties, and states,” writes TPPF’s Chief Research Officer Derek M. Cohen, Ph.D. “Less understood, however, is the attendant ‘social cost’ of such expansion. Naturally, individuals with a predisposition to ‘problem gambling’ present a difficult policy question for lawmakers to navigate: what is the tolerable amount of human suffering to top off public coffers?”
Proponents of expanded gambling often tout the positive economic effects of the revenue gambling would create for the state. Using a case study from the state of Ohio’s experience – which expanded gambling in the last 15 years and publishes robust information on the economic benefits and social costs – Dr. Cohen projects that if Texas were to set up a similar structure to Ohio, the industry would generate $834 million.
To put that in perspective, Texas spends almost $93 billion on public education. Dedicating every dollar of gambling revenue to education would provide less than four days of funding for public schools.
Texas lawmakers must also contend with the attendant social implications of expanding gambling. Again, looking at the experience in Ohio, the state’s Department of Mental Health and Addiction Services reports that the category of ‘problem gambler’ has seen a sevenfold increase in the 10 years casinos have been present in Ohio, while moderate-risk gamblers experienced a sixfold increase, and the percentage of low-risk gamblers has increased by 2.5 times. Extrapolating this trend to the Texas population, Dr. Cohen posits that 4.5 million adult Texans would have their lives negatively impacted by their gambling, with over 642,000 of them having their lives severely upended.
“The research is intended to help inform lawmakers as they consider the very serious question of expanding legalized gambling in Texas,” says Cohen. “The tradeoff is clear: at what financial threshold does the risk posed by expanding casino gambling become acceptable? It’s important that policymakers and the public have the full context as this issue moves forward.”