State lotteries and casinos are big-risk and low-reward propositions for players who want to strike it rich. However, some say states that allow legalized gambling are making a smart bet.
Lyn Arnold, the executive director for the Tunica County chamber of commerce, said that gaming in Mississippi has greatly benefitted Tunica County. However, people who lose their whole paychecks at the casinos may not feel so lucky.
According to one study, poor people are more likely to gamble on lotteries, the other most popular form of legalized gambling.
Brandon Ballard, someone who has seen the effects of gambling on friends, family and even himself, said that players are blindly faithful to the hopes of winning big.
“They think they’re going to win every time,” Ballard said. “They want to get rich fast. It’s the lure that you can get rich and if you put enough money into it, you will finally get lucky and hit the jackpot.”
Without driving to Tunica casinos or the West Memphis dog track, gamblers can play the Tennessee Lottery, which made over $1.2 billion in 2012, according to U.S. Census figures.
The U.S. Census keeps track of income and apportionment of state-administered lottery, and revealed that altogether the 43 states with lotteries made over $59 billion. That is the gross amount of ticket sales, not including the commissions charged for selling the tickets. In Tennessee, that commission starts with a $95 startup fee for retailers, plus $780 per year as operating costs for each retailer. Out of that total amount, Tennessee appropriated about $676 million of its earnings to prize-winners. Despite the enormous amount of money paid into the system, only slim margins make their way back into the governments to benefit the constituents.
A 2012 study by researchers at the University of Buffalo, published in the Journal of Gambling Studies, found that the lowest fifth in terms of socioeconomic status had the highest rate of lottery gambling (61 percent) and the highest number of days gambled in the last year (26.1 days).
There are five types of gaming, but the primary focus is casino gaming and state-run lotteries. Both of these create a wealth structure that widens the gap between the institutions who hold the cards and the players who support the businesses.
In Tennessee, the Tennessee Education Lottery Scholarship has been the anchor of support for the state-run lottery. In reality, this program has not been all that successful, with low percentage rates of students retaining the scholarship. Only 42 percent of Tennessee college students are currently receiving the lottery scholarship. Of the original 23,369 recipients of the scholarship in 2008, only 16 percent retained the scholarship throughout their four years at their colleges of choice.
As well as not paying out as much to education as advertised, the lottery system has a target audience. Because their advertising is not regulated by the Federal Communications Commission, misleading ads target low-education and low-income constituents with illusions of striking it rich.
James Whelan, Ph.D in clinical psychology and co-director of the Institute for Gambling Education and Research at the University of Memphis, said that class structure is not a factor in gambling addiction, but the consequences can be greater for low-income gamblers.
“Low income people are more prone to the problems associated with gambling because it impacts their financial well-being,” Whelan said. “Those with modest income are quicker to get in a financial jam. People who are wealthy and have more disposable income do not feel the problems as quickly, but all are subject to the addiction.”
Whelan said factors that motivate gamblers include those who are excited by gaming itself and have a thirst for the thrill; those who believe gambling will solve their problems; and those who wager because they are risk takers and enjoy the risk associated with gambling.
According to the University of Nevada, Las Vegas Center for Gaming Research, the U.S. annual commercial gaming revenues have topped $370 billion in six of the last eight years. For states that permit casinos, there is clearly benefit initially for the cities that house the casinos. The value in tourism and initial job creation cannot be denied, as they provide hundreds, sometimes thousands, of entry-level positions to boost a city’s economy. States also collect taxes from the resorts.
Tunica Chamber Director Arnold explained that Mississippi collects a 12 percent revenue tax from the casino resorts, 8 percent going to the state’s general fund and 4 percent to Tunica County.
“Of that 4 percent, 10 percent goes to the town of Tunica, 10 percent goes to the Tunica County School Districts and the rest goes to the county general operational fund,” Arnold said. “That general fund has added infrastructure, built amenities for gaming industry, updated the airport, built golf courses and Tunica’s water park.”
He said that before the casinos the only industry they had was agriculture.
“Now we don’t just have one sector, we have agriculture, tourism, manufacturing and we needed that diversification,” Arnold said. “The casinos have created a larger middle class and have helped the economy to become more diverse and become more recession-proof.”
Making money off of the tourists is the name of the game for casinos and their employees, whose livelihood is dependent on these visitors. This is especially true in rural areas that establish casinos such as Tunica County.
The problem with establishing casinos in these rural areas is the initial lack of attraction without the gaming. Allen Godfrey, the executive direction of the Mississippi Gaming Commission, said it is necessary to provide reasons for visitors to come to that particular area because of the increased number of places that allow gaming.
“You can drive two hours any way in the country and find a casino,” Godfrey said. “We have to find a reason to do something other than gamble. You need to have shows, entertainment and reasons for people to stay more than the 1.8 days that the average gambler stays.”
In Tunica’s case, there is a particularly heavy dependence on the revenue that the casinos generate, because of the undereducated populous. Casinos are the nine largest employers in the county, employing nearly 7,100 of the county’s 7,772 people older than 16, according to Tunica’s Chamber and Economic Development Foundation.
The United States Census shows that in Tunica County, more than 30 percent of all people are under the poverty line and around 72.5 percent of families make less than $50,000, or $4,166 per month. Of the Tunica County residents, 57.3 percent only have a high school education and nearly half of them, 26 percent of the county, never finished high school.
All this data means that the residents are dependent on entry-level casino positions that take little or no education. The casinos make sense on paper as there is a not-so-talented job pool which is in desperate need of jobs and the casinos can employ most of the residents.
It is a business where the bottom line is the measure of success and participation of the government is a necessity. However, the earnings of gambling come from somebody losing money. Although it is an industry that preys on the individuals who succumb to the thrill of gaming, it has revitalized regions such as Tunica County and given their government a way to create jobs, increase tax revenue and better serve its constituents.
