Texas economy the big loser if slots OKed, professor says_51704

Posted: 5/14/04

Texas economy the big loser if slots OKed, professor says

By Ken Camp

Managing Editor

AUSTIN–Texas could lose more than $520 million from its economy each year if the state's lawmakers approve 40,000 video slot machines, a Las Vegas professor has estimated.

And that doesn't even count the $1.8 billion a year in bad debts, thefts and lost productivity that could be caused by the inevitable increase in compulsive and problem gamblers, said William Thompson, public administration professor at the University of Nevada-Las Vegas.

Thompson presented his findings to state officials in Austin at the invitation of Texans Against Gambling, a statewide anti-gambling coalition.

Introducing video slot machines into Texas will “hurt Texas pocketbooks,” Thompson said.

“Each machine will likely take $65,000 a year from players. The trouble is the players are Texans. The money lost to machines is already in Texas. The money will come out of Texas pocketbooks,” he said.

Based on the state's own revenue projections, 40,000 slot machines could result in $2.6 billion in revenue.

But at most, Thompson estimates no more than 10 percent–$260 million–would be lost either by non-Texans or by Texans who would otherwise gamble and lose the money outside the state.

“Assuming that $260 million comes to the state, we can ask how much of the $2.6 billion won by the machines is retained in the Texas economy. Not enough,” he stressed.

Much of the profit will go to out-of-state investors, he said, noting 40 percent of the racetrack owners live outside of Texas.

Machines would have to be purchased out of state, from manufacturers in Nevada for about $480 million, he estimates. And they will have to be replaced periodically.

“A slot machine costs $12,000. A machine will have a shelf life of three years. The 40,000 machines will therefore cost $160 million a year,” he said, adding that other supplies will cost $100 million.

Furthermore, he estimates $104 million lost to the Texas economy through regulation, infrastructure and services not otherwise required.

In all, Thompson estimates a $261.9 million direct loss to the Texas economy.

Basing the total impact on a conservative multiplier of two, the net loss likely would be at least $523.8 million annually, he said.

“But the losses don't stop there. The machines will double the number of compulsive and problem gamblers in the state,” he predicted.

Thompson pointed to findings by the National Gambling Impact Study Commission that the number of compulsive and problem gamblers doubles when casino gambling is introduced within 50 miles of a person's home.

Statistically, introducing 40,000 video slot machines into Texas would likely produce 90,000 new compulsive gamblers and 160,000 problem gamblers, he said.

“Tragically, among the 90,000 new compulsive gamblers, there will be 23,000 suicide attempts, resulting in over 1,000 suicides that would not occur without the gambling opportunities presented by the machines,” Thompson concluded.

Weston Ware, legislative director for Texans Against Gambling, urged concerned Texas Baptists to contact Gov. Rick Perry and Lt. Gov. David Dew-hurst to express opposition to legalized video slot machines in the state.

Call Perry toll-free at (800) 252-9600 and Dewhurst at (800) 441-0373.