My heart bleeds for the gambling-industrial complex
Special Internet edition,
January 26, 2000
The gambling-industrial complex will always cry poor-boy. When under attack, they place their serfs on the frontline to take the slings and arrows while the overlords enjoy outrageous fortune.
Historically, as Sen. Joe Neal, D-North Las Vegas, has noted, the deal was that we would legalize a formerly illegal vice with the understanding that the vicemongers would pay for any problems they caused plus a little to support the community which allowed their enterprise to grow in the sunlight.
Now, they have succeeded, like most other major corporations, at privatizing the profit while socializing the risk. As Las Vegas Sun columnist Jeff German re-stated the case a few days ago, their attitude is "what's mine is mine and what's yours is negotiable."
Not many years ago, gambling was responsible for over 52% of general fund revenue. It's now slipped to around 32%, eclipsed for the first time in history last year by the regressive sales tax. This has happened because of the conscious efforts of the industry to pervert to its own benefit the 1981 attempt at property tax reform. Of the total state biennial budget of roughly $14 billion, the gross gaming tax now accounts for between nine and 10 percent.
Nevada Resort Association honcho Bill Bible and the gamblers seem to want to focus on the lower volume members of the "$1 million or more a month" club. They scream that the "marginal operators" will be forced out of business.
Sen. Neal told the Carson City press corps on 1-25-Y2K that it's a mistake to view gambling like any other business. He said "I could go out here on the corner, set up a table and run a dice game. What's my product? All they've done is to move the same game inside onto green felt tables." He noted that many of the executives and owners of these so-called "marginal" clubs are now multi-millionaires and billionaires. I've dealt with a few casino executives in my time and I know how that works. Twenty years ago, a one percentage point ownership interest in a downtown Reno hole-in-the-wall casino could bring an owner salary, expense accounts and perks totaling well over $100,000 a year. With such high salaries, it's pretty easy to show a loss on paper for tax purposes. That's exactly Sen. Neal's point: you can't look at a casino monetary dream machine like you do any other kind of business. That's why we hit the vice business with a privilege tax in the first place.
The danger to Nevada's gaming industry does not lie in making the local industry pay a fair share for the bounty it enjoys here. The real danger is the industry itself opening up casinos in California. By competing with itself, it will keep customers out of Nevada by serving them in California, our prime market. This can lead to a long-term downturn in Nevada gambling and a loss of jobs. It's the equivalent of General Motors firing people in Flint, Mich., and moving their manufacturing to Mexico.
Bill Harrah was asked many years ago why he moved his bingo operation from Idaho to Nevada. He said "because Nevada's next to California."
I rather admire Bill Bible and the plantation overlords for trying to attribute to their lone, small opponent their own greatest vulnerability. Psychologists would call it displacement disorder. As Jeff Greenfield put it in his political bestseller "Playing to Win" (Simon & Schuster, 1980), the weakest argument with which one can rebut an opponent in a debate is "so's your old man."
In other words, you're as bad as we are, so don't point fingers. They accuse Joe Neal of jeopardizing gambling industry jobs, but remember: a lot of time and a lot of ifs stand between that smear and reality. Any such job losses and casino hardships are entirely speculative and, even if the gamblers are right --which they're not-- such disaster would only happen IF his initiative passes at the polls in 2002, THREE FULL YEARS from now. Meantime, the Nevada gambling industry itself is stepping up its export of Nevada jobs, something it's been doing for 22 years. Station Casinos has announced a joint venture with a Native American tribe for a casino near Auburn, Calif., between Reno and Sacramento. Harrah's, represented by Steve Wynn-approved 1998 gubernatorial candidate Jan Laverty-Jones, announced a major JV with a tribe in San Diego. Like so many other major industries, the casinos are exporting jobs and blaming everyone but themselves. And so's your old man.
They are taking the substantial benefits of operating in the jurisdiction with the lowest gambling taxes in the world and opening up clubs to compete with themselves. Can the day be far when they use fear of the awesome Sen. Neal and the dullards who sign petitions as an excuse for investing in California? ("That Joe Neal is forcing us over the hill to hedge our bets.")
Mark my words, it will happen. This is classic blame-the-victim rape and pillage. Perhaps the voters are not as co-dependent as the gamblers like to think.
Might as well milk your tiny opposition for all it's worth. The goblins are always under the bed, even in the bedroom of the baddest beast on the block.
Here is a checklist of facts which I absolutely dare anyone to rebut:
1. Nevada casinos actually pay no taxes. All state and local levies are fully deductible, dollar-for-dollar, on federal income tax returns. Thus, Sen. Neal's initiative is no more than moving money which would go to the IRS and sending it to Carson City.
2. The industry annually gets back about one-third of its gross gaming tax in the form of corporate welfare such as downtown redevelopment agencies, convention and visitors authorities and wonderful projects like the Don Carano Memorial Downtown Reno Convention Center and its Union Pacific drivethru window.
3. The gambling industry itself is exporting jobs right now and has been for 22 years--to California, to other states and nations. Paul-Son Dice moved much of its manufacturing to Mexico!
Sen. Neal's initiative, on the other hand, will CREATE jobs by upgrading education and attracting clean, higher wage, non-parasitic businesses. When the U.S. had progressive taxation in the 50s and 60s, we spread the wealth and created the strongest economy the world has ever known. The U.S. economy and the U.S. dollar peaked in 1968. Since that time, corporations and wealthy individuals have shifted the tax burden to poor and middle class people. (See Barlett & Steele. "America: Who Really Pays the Taxes?", Touchstone, 1994. Enter "Barlett" at the search engine to learn a lot more.)
4. A Guinn-Hunt administration study proves Sen. Neal correct. Circus-Circus/Mandalay Bay VP Mike Sloan went before the 1999 Nevada Legislature and pointed the finger at new businesses relocating here as a result of economic diversification programs. He regaled such businesses for paying no taxes, adding that the ledge should target such freeloaders, not poor sweet gambling. This caused the production of the Nevada State Dept. of Economic Development study which proves that low wage gambling jobs create demand for expanding government services to take up the slack.
Sen. Neal put it well in announcing his petition on Tuesday 1-25-Y2K: Gaming imports 45 million temporary citizens to this state every year. They require every service provided permanent citizens, save education, which may be viewed as the reason education is chronically shortchanged. He made this observation in response to a question as to why Truckee Meadows Community College ran short of money and cut classes at mid-term.
The NCED study is linked at the front of Sen. Joe Neal's website or may be accessed directly at http://www.nevadalabor.com/cop/ncedstudy.html
It's the smoking gun which proves that longtime opposites are both correct. Conservatives, who decry expanding government, and liberals who become concerned when the state can't pay its bills and take care of its people, find common ground in the Guinn-Hunt administration study.
Because of the kinds of jobs we create, we proliferate government but don't have the money to pay the tab. As a result, as Gov. Guinn's former chief of staff Peter Ernaut recently noted, the state faces a looming deficit of almost $750 million a year, and that's just between Medicaid and the Clark County School District. My column of last Sept. 19 reviews the state study.
The gamblers have used the "you're gonna lose your job" scare against candidates they didn't like many times in the past. They did it against Sen. Neal in the 1998 gubernatorial primary. They did it against Sen. Randolph Townsend, R-Reno, when he first ran for state senate as a populist Democrat in 1978. Both Neal and Townsend lost those campaigns.
I understand that Randolph, like many others, thinks Nevada should wait till Gov. Guinn is done with his review of state government. I submit that the review is done; the Guinn-Hunt NCED study, posted at the websites above. Nevada government is bigger than it would otherwise be because the gambling industry has shifted onto the taxpayers so much of the burden caused by its lousy jobs.
No less than former U.S. Sen. Paul Laxalt, R-Nev., agrees. Read this from the 1-17-Y2K Las Vegas Review-Journal:
Looking to Nevada's future, Laxalt seems primarily worried about the furious growth of Las Vegas.
"You look at the traffic, and you look at the crime; I just wonder," he said. "A lot of my Las Vegas friends would love to turn the clock back, but it's too late.
"The northern part of the state went the other way," he said. "Reno didn't want to be another Vegas. It is not now deemed a gambling community, and I think it's retained a lot of its integrity."
Laxalt likewise is not impressed with reports of a thriving job market in Southern Nevada. "The unpleasant fact is that most of those are near-minimum wage jobs," he said.
Because of the Nevada constitution (which exempts mining and prohibits a personal income tax), Gov. Dudley Do-Right's options are very narrow: increase property taxes (where casinos already get breaks homeowners can't); impose a business profits tax, goosing non-gaming businesses which are already carrying some of the load shifted by gambling, as Sen. Neal noted in his petition kickoff; or a sales tax on services, which would again penalize the working poor and the middle class.
For the past 20 years, I've been saying that if you are a couple of mid-middle class income and above, especially with no children, Nevada is a great place to live. If you are of more modest means and have children, get the hell outta Dodge because the gamblers have figured out how to vacuum your pockets even if you never put a quarter in a slot machine.
Be well. Raise hell.
© Andrew Barbano
Andrew Barbano is a member of Communications Workers of America Local 9413 and editor of U-News. Barbwire by Barbano has originated in the Sparks (Nev.) Tribune since 1988.
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