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Afflicted Enough

It may not mean much to many inAlabama, butSouth Carolinareached a significant anniversary on July 1. It was the fifth anniversary of the state pulling the plug on the video gambling industry.

This anniversary should be important to Alabamians because pro-gambling state legislators keep trying to push legalized video gambling on us. Lord knows we are afflicted enough already in this state andSouth Carolinais conclusive proof of just how “afflicting” video gambling can be.

Not only was the video gambling industry sucking $2.5 billion annually out of

South Carolina’s economy, the social problems associated with it were costing the state millions of dollars. Crime was a huge problem statewide, particularly in areas such asYorkCountywhich was saturated with video gambling machines.

According to an article in the Rock Hill Herald,YorkCountyhad a total of 9,756 cases of robbery, burglary, and larceny in 1999 and 2000. Those numbers dropped to 5,799 for 2003 and 2004. York County Sheriff Bruce Bryant linked the decline of certain crimes such as murder, rape, and armed robbery to the absence of video gambling. “All that [crime] went down significantly since video poker left,” Bryant said.

In addition, Tommy Pope, a circuit court solicitor, noted a reduction in collateral crimes such as people writing bad checks.

There has also been a tremendous reduction in the need for gambling addiction treatment services. In 1999, it was estimated that as many as 20 percent of the gamblers inSouth Carolinamet the criteria of a problem gambler. But according to the Herald article, three months after video gambling was shut down Gamblers Anonymous went from 32 chapters to only 16 in the state. Moreover, Keystone Substance Abuse Services inYorkCountycurrently have no gambling addiction patients.

The cost of increased crime and gambling addiction added a tremendous financial burden to the people ofSouth Carolina. Including the cost incurred by taxpayers, businesses and families were hit hard too because of hardships created by lost time at work, family bankruptcies, and financial losses related to gambling problems. In addition to draining about $2.5 billion per year out of the retail economy, businesses inSouth Carolinawere also absorbing substantial hidden costs related to lost productivity, employee theft, and rehabilitation costs.

The Herald article cited a study done by an economist at theUniversityofIllinoisat Urbana-Champaign that calculated the economic and social costs for gambling at $289 for every $46 of economic benefit. Video gambling also tarnished the image of the state in terms of economic development making it difficult to get new companies to locate there. Perhaps this combination of negative factors explains why a unique and diverse coalition of business groups led by the South Carolina Chamber of Commerce, the South Carolina Manufacturers Alliance, pro-family groups, and churches worked together to ban video gambling.

In addition to these problems, there was also the seedy and powerful political side of the industry.

Every Alabamian should read “Busted Flush,” an article byDavidPlotz in the August 1999 Harper’s Magazine.

Plotz exposes the incredible power and influence wielded by the video gambling industry inSouth Carolina. Plotz disclosed that in 1998, the last election before video gambling was banned, the video gambling industry spent more money in the South Carolina governor’s election than the entire gambling industry spent in 1997 and 1998 on “…all candidates, in all congressional elections” nationwide.

The Rock Hill Herald article quoted State Senator Wes Hayes ofRock Hillwho said, “Some would say they (video poker operators) made a down payment on state government. They were able to get close to a lot of politicians because of the money. And the ones they couldn’t get to, they defeated.”

Why does this matter to Alabamians? Because, the video gambling cartel inAlabamais determined to get legislation passed to make the industry legal here.

With the financial problems the state is facing with our General Fund budget, pro-gambling legislators will try to convince Governor Riley and fellow state legislators that legalizing video gambling is the answer to our budget woes. They will seek to have the state impose a tax on their revenues and/or a licensing fee for their video gambling machines. While most businesses do all that they can to avoid taxes and regulations, the video gambling industry wants to be taxed and regulated because being taxed and regulated equals legitimacy. As Harper’s Magazine stated, “…the right to be taxed and regulated…is the right to survive forever.”

South Carolina’s experience with video gambling is proof thatAlabamashould never legalize what even gambling industry experts call the worst gambling industry inAmerica, an industry they describe as economically useless and socially devastating.

Alabamians should not be fooled by pro-gambling state legislators pushing for video gambling. Legalizing video gambling, or casinos, for that matter, will ultimately cost our state far more than we will get back in revenues. And we don’t want to go through whatSouth Carolina’s afflictions to find this out; we are afflicted enough.

Gary Palmer is president of the Alabama Policy Institute, a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.

July 15, 2005