NCPA - National Center for Policy Analysis


July 15, 2004

Politicians from a growing number of states have decided that slot machines can help pay education costs or stave off tax increases, says the New York Times.

  • California's Gov. Arnold Schwarzenegger recently approved an agreement allowing five Indian tribes to operate an unlimited number of slot machines, with the state getting $1 billion in revenue.
  • New York's Gov. George Pataki is pushing racetrack gambling parlors as a way to finance education; currently four "racinos" are in operation, but only $44 million of the $72 million they've generated has made it to the education budget.
  • Pennsylvania's Gov. Ed Rendell and lawmakers are allowing some 61,000 slot machines in 14 locations statewide, with expected revenues of about $1 billion annually; the catch is that public officials will be permitted to own up to 1 percent of any new slot machine ventures.

Slot machines produce at least $7 out of every $10 in casino revenue, and there are 900,000 slots in operation. But the placement of check-cashing and ATM machines located next to them lure those who are least able to afford gambling, says the Times.

In spite of gambling's toll on the poor, however, 30 states currently use or are planning to use gambling to pay for local services.

Source: Editorial, "Lemons in a Row," The New York Times, July 13, 2004.


Browse more articles on Tax and Spending Issues