Franke: Casinos
by Mark Franke
There are two ways to think about governmental incentives for new commercial enterprises. One is the high-level theoretical or philosophical one. In this way of thinking, the basic question is whether government even should be involved in what essentially are free enterprise activities.
The other is to accept that government, being government, will provide incentives so the question is to determine which projects are productive for the community and which are just boondoggles.
Here in Allen County, we have several projects attracting public opposition. That is the question my Socratic discussion group took up in April. The proposed New Haven casino served as our launching platform.
It was acknowledged that casinos can bring significant tax revenue and spending from tourism, but they also come with potential social impacts. What makes this question difficult is that both the positive and negative outcomes are supportable with data mined from other localities that have already gone down this road.
Elsewhere economic development officials will argue that their casinos have been financially rewarding with ancillary benefits of a lower poverty rate due to the influx of consumer spending and job creation.
That said, some Hoosier counties have admitted that they are directing 40 percent of their newly won tax receipts to address gambling addiction and recovery. That raises a significant morality issue to address alongside the economic one. Should we, through our governmental officials, encourage a potentially self-destructive habit because we make a tidy profit from it?
The argument is that Hoosiers love to gamble so why not encourage them to do it here rather than take their dollars elsewhere. Americans certainly are gambling addicted as anyone who watches a sporting event will quickly realize as the major advertisers and sponsors are hawking their gambling opportunities.
As a case in point, I recall back in the 1980s when the Indiana General Assembly seemingly voted every session on whether to initiate an Indiana lottery. One of the arguments for it was that Hoosiers were just crossing state lines to buy lottery tickets in other states, taking their dollars with them. This argument eventually prevailed in 1988, supported by growing popular support. One member of the state House of Representatives, Steve Gabet, announced he would not seek reelection because he could not morally support state-sponsored gambling and the inevitable state incentive to encourage it among Hoosiers. Gabet proved prescient; just notice all the billboards, TV commercials and event sponsorships paid for by the Indiana Lottery.
That took us to the second proposition on the floor: Investing in data centers, manufacturing, and renewable energy like wind and solar can promote sustainable and long-term growth.
These projects can generate even louder public outcries than a casino does. The Google data center under construction in southeast Allen County got a brief respite from bad press because the nearby proposed casino captured front page attention.
Wind and solar farms are no more popular than casinos and data centers. They also require substantial upfront investment and potential remediation costs when they must be removed. The argument that they promote long term growth is not proven but at least sustainable energy can point to providing a usable product.
Conservative political philosophy is a big tent movement. Our group’s discussion of the casino issue pointed out that we have representatives from most if not all modern conservatism’s branches.
The libertarians among us opposed government financial support for these projects but did not object morally to private enterprises like casinos. They just don’t like the nanny state’s overreach into private decisions.
The classical liberals (my preferred designation) thought government should stay out of these decisions. Why, if these projects are so important economically, are government subsidies needed? Why aren’t private capitalists lining up to invest in them?
The social conservatives were the ones who opposed the casino specifically due to its potential for increasing local poverty due to gambling addiction.
The common good conservatives were most likely to accept some governmental involvement as a given and so were resolved to channel it appropriately to the most beneficial projects in the long term.
Having suggested the above taxonomy, I am compelled to disclose that we don’t all announce our faction affiliation up front and wear appropriate identification badges. Nor does any of us find himself restricted to a single faction. What makes the group work is that we energetically challenge every member’s assertions to test their strengths.
One point of unanimous agreement was a strong preference for directing centralized economic development support toward existing businesses which have an opportunity to expand. Why spend all this time trying to attract some entity from elsewhere when we have long term residential employers who have proven their commitment to our local community?
If I may mix gambling metaphors, we should keep betting on a winning hand rather than trying to draw to an inside straight.
Mark Franke, M.B.A., an adjunct scholar of the Indiana Policy Review and its book reviewer, is formerly an associate vice-chancellor at Indiana University-Purdue University Fort Wayne.
Comments...