Aug 10, 2009 by Chad
States Shouldn’t Throw Racinos A Bone
The latest trend in gambling expansion has been the conversion of pari-mutuel tracks into casinos – or “racino.” Horse and dog racing is a dying sport with few remaining fans, and the U.S. economic recession has all but turned commercial gambling upside-down. Racinos are a means for survival, but there is little benefit to the people and substantial losses to host communities.
A new study from Ball State University [Journal of Economics, 2009] examines the impact of casino gambling at pari-mutuel racing tracks – commonly known as “racinos.” Professor Michael Hicks examines the model “racino” state of West Virginia from 1978 through 2004.
Counties with racinos realized a one-time, 1.1 percent increase in employment (jobs), but the average salary in that area fell by as much as 2.9 percent (more low-paying jobs). The annual average salary of a racino employee is less than $14,000 – near minimum wage. “These new jobs pay little to nothing,” says researcher Michael Hicks.
What this study found is both alarming and timely, as race tracks lobby more states promising “more jobs” and an “economic boost.”
“The widespread attachment of gaming revenues to services in many states was designed to lessen opposition to gambling activities,” Hicks said. “However, the study clearly shows that policy makers in all states should consider the policy initiatives when considering adding gaming to racing tracks. In other words, what are the costs of adding more low-paying jobs while propping up the state budget or funding other programs?”
