How many slots are enough to compete?
When both gubernatorial candidates view slot machines as a potential jackpot that could plug holes in Pennsylvania’s budget, it’s nearly a sure bet that gambling will be expanded at the state’s four racetracks. This might not be a bad thing, as long as decision makers remember that gambling can be addictive and that once a set number of slot machines is approved it will only be a matter of time before greed sets in. Our neighbors in West Virginia are providing a textbook that should be studied.
About a decade ago, West Virginia gave permission for racetracks to add slot machines. The state takes a cut of the action and uses it to fund general government. When state revenue is down, it’s easy to look favorably on requests by the gaming industry to increase the number of slots, as West Virginia has done.
One of the closest tracks to us, Mountaineer, last year was named No. 7 on Forbes Magazine’s list of 200 Best Companies. Not bad for a track that was struggling a decade ago and reported last year $195 million in revenue. Mountaineer has exploded, but it isn’t enough for the company. Last week its president proposed that adding table games, such as roulette and blackjack, would create hundreds of high-paying jobs and boost business by another 20 percent.
Those numbers might be hard for West Virginia to turn down, especially if Pennsylvania were to approve slots for its racetracks. West Virginia would need to raise the stakes in order to keep attracting busloads of Pennsylvanians.
Keeping Pennsylvanians’ money in Pennsylvania is part of the logic bantered by those pushing for slots at the racetracks. They claim people are already gambling so Pennsylvania might as well take its cut to help our own senior citizen and public school students rather than those in West Virginia or Delaware or New Jersey or New York.
And they claim that without slots, the four racetracks might close because purses have dwindled, attendance has fallen off and interest has moved to bordering states. Some 35,000 jobs in the state, including 10,000 in agriculture, depend on racing, horse industry officials say.
In a sense, the state would be bailing out the racetrack industry but the government does have an obligation to remove obstacles that cause businesses to fail and people to lose their jobs. Further the state stands to make money out of this deal as it is estimated slot machines could create thousands of jobs and annually generate nearly $300 million in government revenue.
With this kind of revenue and jobs at stake, it is easy to understand why slot machines are gaining so much support, including that of both political parties’ gubernatorial picks. What needs resolved is not so much what the revenue would fund. (Democrat Ed Rendell favors education while Republican Mike Fisher, expansion of senior citizen programs.)
The debate should encompass how many slot machines are enough and what will Pennsylvania do when a neighbor, such as West Virginia, raises the stakes by offering more.