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States Bank on Gambling to Boost Revenue

8/10/09 - USA Today - View Source

By Dennis Cauchon

States are aggressively expanding legalized gambling, eager to shore up battered revenue sources during the economic crisis and concerned that residents will cross state lines to gamble elsewhere if they don't.

Gambling will expand in about a dozen states this year in an effort to generate an extra $2 billion in gambling taxes by 2010, a record-breaking increase if state projections are accurate.

"Politicians are pushed toward gambling when times get tough," says William Thompson, a public administration professor at the University of Nevada at Las Vegas. "If it's gambling or a tax increase, the political choice is clear, and the public acquiesces."

States collected $6.8 billion in gambling revenue in 2008, about 1% of all tax revenue. Gambling taxes fell 2.2% last year, despite the opening of new casinos and the installation of 37,000 new slot machines.

Legalized gambling has grown for two decades, the big jumps occurring during economic downturns, Thompson says. Big expansions include:

• Ohio. The biggest state without casino gambling will put 17,500 slot machines at seven racetracks. Expected government take: $933 million in 2010.

• Pennsylvania. The Legislature and governor are working on legalizing video poker in bars. Expected take: $550 million.

• Illinois. The state approved adding video poker at bars to generate $300 million.

Casinos are now legal in 40 states, up from 31 in 2000. States are also relaxing regulations on casino locations, hours and betting limits.

As of July 1, Colorado casinos can stay open 24 hours a day, add roulette and craps and raise betting limits from $5 to $100.

"Some states are increasing gaming just to keep up with the states next door," says economist Alan Meister.

The Indiana Legislature formed a committee to make sure its casinos, which generate $800 million a year, don't lose business to Ohio, Illinois and Kentucky.


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