The tougher times get, the more you hear the word slip from the lips of politicians. The word is “gambling,” sometimes with the “bl” dropped to soften it into “gaming.”
Politicians never seem to recognize that every time they run to increase tax revenues by expanding legalized gambling, that they are in effect admitting they have failed to do their duty of balancing their budgets from existing revenue sources.
Gambling, over the years, has become the bailout-of-choice politicians’ approach with supposed apprehension but in the end, rejoice in expanding across their constituencies.
In politics, gambling tax revenues always trump morality!
I’m the scion of a grand old state senator from the conservative heart of Ohio. I grew up punting Standardbred horses – trotters and pacers (see sidebar) – and playing poker at family wakes. My grandfather, a good Baptist, saw nothing wrong with either.
He grew up in the last two decades of the 19th Century, betting his rare spending money that his horse and buggy could beat his best friend’s through the covered bridge and into town on any given day. And he carried that love of a good horse and a solid bet through the Ohio Legislature until we had pari-mutuel betting at our Delaware County Fair, the home of the Little Brown Jug that is one race of the Triple Crown for pacers.
JUST DON’T CALL IT GAMBLING
Living in Florida, I have watched the hypocrisy with which the Sunshine State has dealt with gambling over the years. The Florida Legislature even went so far in the 1960s as to outlaw Bingo. The B-I-N-G-O sponsors got around the law by renaming the game G-U-E-S-T and all you had to do was buy a $1 Guest ticket to get into the game.
Political morality took it on the chin on that one, and has ducked and weaved ever since in Florida — and I assume in much of the nation.
The state-run lottery in Florida was never voted in until the politicians decided to say they would spend the profits from the lottery on education. They kept their word. The lottery profits went to education — at the expense of transferring other state revenues that had been devoted to education to fund other government expenditures, many of them nothing more than boondoggles. The net gain to education from gambling in Florida has been virtually negligible.
The racing of horses in harness dates back to ancient times, but the sport virtually disappeared with the fall of the Roman Empire. The history of modern HARNESS RACING begins in America, where racing trotting horses over country roads became a popular rural pastime by the end of the 18th century. The first tracks for harness racing were constructed in the first decade of the 19th century, and by 1825 harness racing was an institution at hundreds of country fairs across the nation.
With the popularity of harness racing came the development of the STANDARDBRED, a horse bred specifically for racing under harness. The founding sire of all Standardbreds is an English Thoroughbred named Messenger, who was brought to the United States in 1788. Messenger was bred to both pure Thoroughbred and mixed breed mares, and his descendants were rebred until these matings produced a new breed with endurance, temperament, and anatomy uniquely suited to racing under harness. This new breed was called the Standardbred, after the practice of basing all harness-racing speed records on the “standard” distance of one mile.
Harness racing reached the early zenith of its popularity in the late 1800s, with the establishment of a Grand Circuit of major fairs. The sport sharply declined in popularity after 1900, as the automobile replaced the horse and the United States became more urbanized. In 1940, however, Roosevelt Raceway in New York introduced harness racing under the lights with pari-mutuel betting. This innovation sparked a rebirth of harness racing, and today its number of tracks and number of annual races exceed those of Thoroughbred racing. The sport is also popular in most European countries, Canada, New Zealand, and Australia.
It took the Native American tribes to show many states, including Florida, how to make gambling work. Almost every state now has a few Indian Gaming spots, all making handsome profits that have gone a long way to improve the plight of many of our native tribes.
The states have been salivating over the prospect of such taxable receipts, even to the point of making deals with the Native American tribal gaming operators to allow games previously outlawed to operate freely for a guaranteed percentage of the profits.
There would be a slot machine in every public restroom in Florida, just like in Nevada, if the state could overcome its knee-jerk morality over the gambling issue. And it may just do that, now that the state is so far in the hole. Politicians are desperately looking for any new revenue to plug the fiscal leak in the dike before it breaks out into a flood of disastrous economic proportions.
What the politicos don’t realize is that the slot machine, in essence, is already in every nook and cranny of the state in the form of lottery scratch-off tickets. I haven’t bought one in a restroom yet but did grab a couple out of a dispensing machine at the entrance to the Men’s Room in a truck stop.
There’s not a whole lot of difference between a scratch-off ticket and a slot machine. Slots machines operate on the principle that the machine will pay out a certain amount of money over so many “pulls” of the lever on the machine — now replaced by punches of a button. Lottery tickets operate on the principle that a certain amount of money will be paid out over the sale of a given number of tickets.
The distribution of the money over the number of pulls or tickets is determined by random number generators that determine what symbols will appear on each pull of the slot machine and what numbers will be printed on every scratch-off lottery ticket. The mathematics used to generate the random numbers and the winning combinations of them are a science that produces excellent randomness and is next-to-impossible to defeat.
Lotteries pay out 50-55 percent of the money they take in. Slot machines can pay off a higher percentage, but don’t have to. Much is determined by how well they are regulated. When sanctioned by a government, they are more heavily regulated and pay-offs are better. When unregulated, the owners can set them to pay out as low or as high as they want.
There are plenty of unlicensed slot machines in Florida, and I imagine in other states too. My best slot machine hit was $4,400 on an illegal poker slot machine in a local club, where the machines were labeled “For Entertainment Only” but could be played as regular slot machines if the management knew you.
SCRATCHING A LIVING – NOT!
I had a good year on scratch-off lottery tickets last year. I came out $170 for the year. Unless you hit one of the rare big dollar tickets, don’t expect to make a living scratching-off lottery tickets or pulling illegal slot machine levers.
You probably won’t do much better on legal slots, but at least the state will be collecting some healthy taxes on the profits from slot machines they sanction. And they need it just to replace declining tax revenues from the horse, dog and jai-alai betting they have become accustomed to over the years. Those revenues have fallen to less than half of what they produced a few years ago.
One of the reasons, in Florida, is that to morally justify the permitting of gambling casinos, legislators – saying they were only doing it to save historical businesses (read gambling games) – ordered them built around racetracks and jai-alai frontons. The players dropped the dogs and moved inside to air-conditioned comfort and started pulling slot machine handles rather than waiting a half hour or more between races to place a bet.
The real action has moved indoors and there will be a scramble this year and in the years ahead to expand it and capitalize on the revenues it produces.
In Florida, state politicians tax the profits made by the various sanctioned gambling operations – 35% tax on profits this year, down from a 50% tax on legalized gambling profits in the Sunshine State last year.
With this potential for ever-expanding new tax revenues, it’s a sure bet that Florida and a lot of other states in financial trouble this year will be authorizing more legalized betting games in the future. It will only be carrying on a tradition started by the federal government that helped finance the Revolutionary War with proceeds from lotteries.
Dave Whitney is a retired journalist and adventurer who has won many writing awards. He was born and raised in central Ohio, attended school in Missouri, served in the US Army Security Agency, and migrated to Florida a half-century ago. Author of four books, he is a former Associated Press writer/editor and has been nominated three times for the Pulitzer Prize during his writing career. As editor and founder of the Free Press newspapers in the Florida Keys, he was the first publisher to pick up Frank Kaiser’s “Suddenly Senior” column when it entered syndication. Whitney currently resides in Lakeland, Fla., after living 25 years in the Florida Keys.
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