Tuesday, May 17, 2005

Recapturing gambling dollars from Louisiana

The Sunday Business section in the Chronicle had a feature article on a new casino opening in Lake Charles, Louisiana. The casino is focused, as you might expect, on getting Texans, and specifically Houstonians, to cross the border to gamble (although, given some of the hard feelings from the last couple of years, the choice of a French name - L'Auberge du Lac - may not be the wisest branding move in this part of the country). Inserted in the middle of the article is a little commentary on Texas' hypothetical loss of gambling dollars to other states:

Heading out of Texas

Although certain kinds of gambling are legal in Texas, such as wagering at horse and dog tracks, the amount of entertainment dollars heading out of state worries some, including the Houston-based Sam Houston Race Park.

"This is just another example of Texas dollars flowing across the border to Louisiana," said Robert Bork, president and general manager of the race park. "We want the gaming revenue to stay in Texas and support education and tax revenues here instead of moving to our neighboring states."

A bill was filed earlier in the Texas legislative session that would allow video slot machines at horse and dog tracks, Indian reservations and at one location in each of nine areas around Texas. Bork said representatives from racetracks and breeding organizations are in Austin seeking support for legalizing video lottery terminals. Several other gambling bills have been filed.

Jordy Tollett, head of the Greater Houston Convention and Visitors Bureau, noted that Houston is a city of millions, many of whom make a good living, so it's no surprise Louisiana gambling operators try to attract them. "We already know it is in the hundreds of millions that goes over there," Tollett said. "It is inevitable that someday we have to take a serious look. Is that something we should invest in later? I don't know."

What this simplistic thinking ignores is: How many dollars are currently spent in Texas on wonderful products, services, and amenities that would otherwise be sucked into the gaping black hole of the gaming industry if it were legal here? Right now, Texans have to be pretty hard core to gamble beyond the lottery or race tracks: essentially fly to Vegas or drive to Louisiana. That helps limit the amount disposable (and not-so-disposable) income in this state that is lost to gambling. If more extensive gambling were legalized here, that portion would almost certainly grow, meaning less disposable income available for other businesses and charities in Houston and Texas. The losses would be subtle and not easy to see, but they would most certainly be there.

If people insist on trying to recapture dollars lost to Louisiana, here's a simple least-harm solution: allow a few casinos in Orange, Texas. Almost the same inconvenience as going to Lake Charles - which minimizes lost disposable income - but people will stop and gamble before crossing the border, keeping the spending - and taxes - here.


At 9:00 AM, May 18, 2005, Anonymous Anonymous said...

Good post... except I'm not so sure that I would want to see a casino established in Orange, TX. I realize that you were suggesting that in the vein of a "least-harm" scenario, rather than an enthusiastic endorsement.

If we're talking about least-harm scenarios, then I think the excursion-ship approach might be the way to go (this has been an on-again off-again service, and I'm not sure whether it's presently "on" or "off"). The concept is basically that you hop on a boat in Galveston, float around the Gulf in international waters and gamble, then return after a few hours. The advantage is that with a bounded time period to gamble, you're much less likely to "lose it all" or to succumb to the addictions of gambling. It's more about just having fun.

This is an imperfect solution, but it does lessen some of the many ills that accompany full-on gaming. I would hate to see a city in Texas go the way of Atlantic City or Las Vegas.

At 3:11 PM, May 18, 2005, Anonymous Anonymous said...

The only issue with the excursion ship is that the revenue is not earned for Texas. The gambling portion is operational in International waters.

At 5:21 PM, July 01, 2005, Blogger Andrew said...

Well, let the state put in slot machines and poker tables at the dog & horse tracks. Hell 1 form of gambling is no worse than the other.


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