Propositions 429, 430, and 431 to legalize casinos in Nebraska have huge flaws. For one, restricting casinos to horse tracks is meaningless when the state allows one race per year to define “horse track.” Nebraska could soon get dozens of such “one-race horse track” casinos across the state.
A bigger problem for casino proponents, though, is that their central argument is false. Far from “keeping the money in Nebraska,” Nebraska casinos would suck more money out, say economists.
The analysis is not hard. Casinos generate no new wealth. They manufacture nothing. They add no value. They attract no outside spending. Instead, they syphon money away from Main Street businesses and into the pockets of casino operators, with a pittance to governments to protect their monopoly.
In 2005, Nebraska economist Lori Fairchild studied how Iowa’s casinos affected their cities’ retail sales and concluded, “the operation of a casino in a mid-size city, far from contributing to economic development, creates a measurable drain on the economy of the city.” The claim by gambling advocate Lance Morgan that casinos “will be great for the rural economy” is not just false; it’s absurd.
Fairchild is in good company. When the tired proposal to put casinos at Nebraska tracks was first tried in 1996, 40 Nebraska economists wrote, “We, the undersigned Nebraska economists, are opposed to the expansion of gambling in Nebraska because the additional direct and indirect costs are likely to far outweigh the additional direct and indirect benefits for the state as a whole.”
The indirect costs are not small. In opposing the casino proposals, Nebraska Gov. Pete Ricketts rightly cites the research of Baylor University economist Earl Grinols, who found that casino costs outweigh benefits by at least a 3:1 margin.
But what about all the money Nebraskans lose in Iowa casinos each year? If we opened casinos, then that money would stay in Nebraska, right?
Uh … no. Not even close.
Creighton University Economist Ernie Goss’ study for the Omaha Chamber of Commerce in 2004 found that if casinos came to Nebraska, Council Bluffs’ casino revenues wouldn’t change much. Nebraskans would still gamble there. But opening just one casino in Omaha would increase Nebraskan gambling losses by an additional 66% ($235 million), including pulling $30 million more out of Nebraska economies outside of Omaha and causing 740 jobs to be lost there. What Nebraska’s government would “keep”: just $29 million.
The Omaha Chamber study also found that an Omaha casino would increase overall gambling so much that the Council Bluffs casino revenues could actually grow, not shrink. So, no, casinos in Nebraska won’t “keep” money in Nebraska at all.
When Detroit fell for the “Keep the money in …” claim, new casinos there doubled the gambling losses of Michigan citizens without putting a dent in the stream of losses going across the bridge to Canadian casinos, reported the Omaha World-Herald.
The multimillion dollar “Keep the money in Nebraska” campaign is a cynical lie that Nebraskans have rejected time after time for decades.
Join Nebraska’s leaders Gov. Ricketts, former Congressman Tom Osborne, former Sen. Bob Kerrey, former Govs. Dave Heineman and Kay Orr, Ron Brown, Warren Buffett, Chuck Hassebrook, Johnny Rodgers and many others and mark your ballot to vote “AGAINST” Proposition 429, 430 and 431. We have to preserve Nebraska’s sensible constitutional protections against casino gambling.
Pat Loontjer is executive director of the Nebraska advocacy group Gambling with the Good Life.