Gambling as a Backup to States’ Budget

It seems in the aftermath of the recent economic crash a lot of states having begun reversing their policies on gambling in order to combat their budget constraints and expand the amount of money they pull in from taxation.

Online gambling and slot machines in lottery halls are common sight across the UK and other European countries, in fact you can visit a website like and within minutes you’ll be playing a slot game.

But unfortunately (or fortunately, depending on your point of view) in America it’s still considered illegal in certain states if it takes place in a non-tribal casino.

Since the majority of casinos are controlled by the Native American tribal councils, it was deemed illegal for any ‘non-tribal’ business operators to start setting up shop without the proper clearance and authorisation.


Image: Shutterstock

Tribal casinos have to spend their revenue on helping people with gambling problems, the fees associated with running the business and regular community based charity contributions.

But these casinos don’t have to share their revenue with the state, which is why the legalisation of gambling is the only way for the government to earn money to plug the budget gaps.

With many states across the country having to do some serious budget slashing to close the gaping gaps in their rapidly growing deficits.

To further iterate how serious their problem is, if there was a list of states that had the worst debt California, the ‘sunshine state’, would top it with its $21.3 billion per year target.

However it seems that attitudes are starting to change as after a recent study it was found that there is millions of dollars’ worth of uncollected revenue available from allowing the usage of online gambling websites and slot machines in non-tribal casinos.

At last check there is roughly an estimated $250 million just waiting to be used.

In fact this proposal has been so popular amongst officials that even the Republicans, a party that opposed any ideas that would alter the amount of tax a state would pull in, have joined the legalise gambling bandwagon.

According to Republican Gary Alexander, leader of the House Ways and Means Committee, this idea seemed like: “Pretty lucrative option.”

Continuing: “Besides generating significant amounts of money, it also hits the other issues we’re addressing, and that’s putting people back into work.”

The Republican party have already started steam rolling this proposition ahead with the plan that it would allow smaller venues like local lottery halls and small casino buildings to compete with the big leagues that cluster around the iconic Vegas Strip.

A lot of states already benefit from increase gambling revenue; New York for example has 15% of its state education funded by the proceeds from lottery games alone.

However, only two out of the 13 states that legalised gambling have managed to meet the projected levels of revenue they originally gave when they put forward their propositions to legalize gambling.

With increasing pressure from competition from the tribal casinos and a difficulty in being able to match the payouts customers win, it’s becoming quite an uphill struggle for state-sponsored gambling.

A lot of states have also been worrying about the possibly disruption to ordinary commerce this might cause.

With many smaller states like Minnesota for example attempting to stop this proposed plan as they fear it will bring a ‘bad element’ to their towns or increase the apparent ‘criminal element’ according to residents of these small hamlets.

According to the Executive Director of the National Council of Problem Gambling, Keith Whyte who criticised the portrayal of gambling legalisation as a ‘Fix-all solution’ by saying: “As long as you don’t look too close at the social cost, you can paint it to seem like it’s money from nowhere.”

He continued by saying that it isn’t a stable source of state revenue and that: “At some point, there’s got to be saturation.”

Currently the legalisation of gambling in the United States is still a touchy subject, with many arguing for and against the proposed plan.

Depending on what side of the fence you come down on it’s really difficult to not see the benefits that state sponsored gambling will bring.

Not only will it allow for more money to go into local communities but the government will also have more money to use in their budget for helping communities and various other state problems that just simply don’t have the finance.

Some believe that all America needs to do is take a long look at the gambling control that Europe has and the benefits can be seen; it’s not a tool of social destruction or something that will bring more criminals to an area.

It’s a method local businesses or, in the case of America, a struggling state to solve its financial problems.


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