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Did Scott County know the costs before gambling on the ponies? (In the News)

Feb. 1, 2006

Did Scott County know the costs before gambling on the ponies?

BY ANDREA HOPKINS

Opinion Page Editor

Bristol Herald Courier Jan 22

The quest for new jobs in this region never really ends.

The list of economic saviors trumpeted over the years is a lengthy one: industrial parks, call centers, tourism, high-technology and on and on. The proponents of each new idea preach the gospel with a fervor once reserved for the pulpit.

In Scott County, there is a new twist on this story. Leaders there are betting on the ponies to fatten the bottom line - both by bringing new "gaming industry" jobs to town and, more directly, through a sin tax pending before the state legislature.

COLONIAL DOWNS, a race track in New Kent, opened its first off-track betting parlor in Southwest Virginia in a refurbished building that was once home to a car dealership in Weber City last week. The opening was heralded with much fanfare and glowing descriptions of the economic impact of the venture.

"This is the entertainment business. I don't look at it as much as a gambling facility as entertainment," said Ginger Helms, a former county economic developer who now manages local operations for the race track.

The benefits of the betting parlor seem impressive enough when viewed in a vacuum. Colonial Downs already employs 35 people and plans to hire another 20 in the future. The track sank a considerable sum into the project to convert car showroom to betting parlor.

And, there's the tax. Scott County leaders are asking state lawmakers to allow them to impose a 25-cent tax on admissions to the parlor. The request seems logical. If the county is going to have gambling, it might as well make a profit, although it might want to save some of that money as a hedge against the need to treat local residents who develop gambling problems.

IT ISN'T all about the money, after all. Gambling has a dark side. For all the happy talk about economic development, entertainment and tourism, gambling enterprises only turn a profit when their customers are losing money.

Much of that money comes from a small segment of the population, according to a study by Earl Grinols, a Baylor University economics professor. Grinols, who points out with pride that he has taken no funding from advocates on either side of the matter, has been studying the economics of gambling since 1991. He concluded:

Just 10 percent of the population accounts for two-thirds to three-fourths of all wagers nationwide. Thirty to 50 percent of all gambling revenue comes from people with a problem.

Gambling as economic development has a mixed track record and needs more research. Vacation-destination casinos do boost the local economy, but for other types of gambling operations (including off-track betting) the proof is less convincing.

Gambling doesn't create a product; it merely shifts money around in the economy. It also creates costs for society and taxpayers, even those who don't gamble. Increased crime, bankruptcies, suicides and family disintegration are among them.

THE CAUTIONARY words don't just come from one Texas professor. The National Gambling Impact Study Commission delivered a massive report with similar conclusions to Congress in 1999. Look it up at www.govinfo.library.unt.edu/ngisc.

Slowing the spread of gambling was a prime recommendation in the report. The commission also criticized states for aggressive marketing of their lotteries with television commercials that make throwing away one's money on something with next-to-impossible odds seem like fun. Lotteries are a gateway to more serious types of gambling for young people and disproportionately target the poor and the undereducated, the commission found.

Scott County voters might have taken all of these pros and cons into consideration when they gave their approval to the betting parlor in November 2004. Or maybe not. The vote was close, and most of the opposition came from those with religious objections to gambling in any form, rather than from those analyzing the cost-benefit ratio.

For better or worse, the betting parlor is open and will remain if it finds a steady clientele. Judging by the relative popularity of the Tennessee and Virginia lotteries, a stealth tax on the mathematically-impaired, it should have no trouble finding customers. But what does it say about the region that such a business is touted as the next great economic hope?

Andrea Hopkins is opinion editor of the Bristol Herald Courier. She may be reached at ahopkins@bristolnews.com or (276) 645-2534.

© 2006 Media General, Inc.

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