NCPA - National Center for Policy Analysis

States Bet on Gambling for Revenues

March 14, 2003

Squeezed by record budget shortfalls, roughly half the states are assessing the prospects for picking up funds from legalized-gambling schemes.

  • In California, Democratic Gov. Gray Davis hopes to help fill a $30 billion budget gap by persuading the state's Indian tribes to fork over a share of their casino revenues for the right to operate more slot machines.
  • In Maryland, a new governor is backing video slot machines at the state's racetracks.
  • In Connecticut, two giant casinos run by the Mohegan and Pequot tribes injected $370 million into state coffers last year, spurring proposals for gambling expansion in every New England state.
  • The most creative scheme may be that of Mitt Romney, the new Republican governor of Massachusetts, who is threatening to legalize more gambling in his state unless casino and slot operators in neighboring Connecticut and Rhode Island fork over $75 million to help Massachusetts address its budget woes.

In some ways, what is happening is reminiscent of the early 1990s, when state fiscal crises led to a loosening of gambling restrictions and ushered in the openings of riverboat, American Indian and other casinos along the Mississippi River and elsewhere.

Those operations were successful, but this time things may be different. One reason is the casino industry itself isn't nearly as enthusiastic about expansion as it was a decade ago, since existing competition would dampen profits from new gambling enterprises.

Source: Christina Binkley, Jon E. Hilsenrath and Charles Forelle, "Budget Deficits Are Leading States to Place Fresh Bets on Gambling," Wall Street Journal, March 14, 2003.

For text WSJ subscription required,,SB104759751527504700-search,00.html


Browse more articles on Tax and Spending Issues