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Paging Senator Einstein...

Some of the newest revelations coming from states with casinos take things beyond cluelessness and into the realm of what Moe used to call "chowderheads."

Paging Senator Einstein…

This may come as a shock to you, but some of the politicians running our state and federal governments are not exactly the sharpest tools in the shed. However, when it comes to commercial casinos, the numbskullery is often earth-shattering.

Some of the newest revelations coming from states with casinos take things beyond cluelessness and into the realm of what Moe used to call “chowderheads.” And as always, it goes back to the fact that the casino business is not treated by government like any other business. They act like running a casino is a crime they’re letting us commit, as long as we give them lots of money. Often, most of our money.

Ever since states beyond Nevada and New Jersey began legalizing casinos 20-odd years ago, state lawmakers have viewed this business as a giant ATM for state budgets.

Maryland comes to mind immediately.

The five casinos in Maryland pay 67 percent of the money they make from slot machines to the state. Sixty-seven percent. Somehow, industry lobbyists managed to get the state’s lawmakers to approve a 20 percent tax for table games, advising them that table games have to be operated by humans, and humans have to eat.

When Maryland Live! and Horseshoe Baltimore asked to remove a couple hundred slot machines from areas in which employees were hearing echoes as they spoke, and perhaps putting in table games that would, you know, actually make money, the gaming commission granted the permission.

Then, the numbskullery began. Twenty state senators signed to co-sponsor a bill to raise the table game tax because they saw the casinos’ move as some sort of ploy to grab more money rightfully belonging to the state by avoiding the high slot tax.

Now, I’m no Einstein, but it seems obvious that no one was playing those slot machines, and as a result, the state was getting 67 percent of nothing. At a higher tax rate, tables will lose money. So, instead of getting 67 percent of nothing from one area of the floor, they’ll get 30 percent of nothing from their entire table-game business.

“Hey, Moe! I just traded 67 percent of nothing for 30 percent of more nothing.”

“Wow—you’re a very intelligent imbecile!”

But the cluelessness of Maryland politicians was, remarkably, exceeded last month in Delaware. As you may know, a blue-ribbon panel made up of state lawmakers and government officials has twice recommended that the legislature lower the stifling tax on the state’s three racinos, which have struggled mightily since losing half their business to Maryland.

The casinos are tanking, and the state is losing revenue because of it. Lawmakers, in their infinite wisdom, raised the revenue tax in 2009 to more than 60 percent once all fees are included. It was because they were making less money, because of the recession. State lawmakers decided to take a bigger slice of a smaller pie.

Essentially, the casinos were mugged.

The economy has somewhat recovered, but the tax remains at the higher rate. In the meantime, Maryland opened up shop, hitting Delaware casinos for 40 percent or more of their business, by some estimates. The casinos are pleading to go back to paying the same portion of their money to the state as they did originally.

Lawmakers are having none of it. In fact, get a load of the latest proposed solution to Delaware’s sagging gaming revenues: Build more casinos.

Yes, you read that right. A prominent Delaware attorney—I’ll leave his name out, because I’m going to call him a nit-wit, and I don’t want to get sued—has testified at every one of the panel’s hearings, lambasting the casinos for seeking a state “bailout.” Now, it turns out he’s working with like-minded geniuses in the state legislature on a bill to create three more casino licenses for the state, to be bid out at $10 million per license.

“They have sucked the money out of those properties for so long, and they overleveraged them, and now they have the unmitigated gall to come and ask for a bailout,” the unnamed nit-wit told Delaware State News. “Why doesn’t every other business in the state do that? They want a monopoly and a tax break.”

Umm… Every other business in the state

doesn’t have to give up two-thirds of their profits to government. And you know, I figured that out with absolutely no government experience.

The amazing part is that someone is actually going to bid on those licenses. I wonder who.

“Hey, Moe, let’s open a casino in Delaware!”

Frank Legato is editor of Global Gaming Business magazine. He has been writing on gaming topics since 1984, when he launched and served as editor of Casino Gaming magazine. Legato, a nationally recognized expert on slot machines, has served as editor and reporter for a variety of gaming publications, including Public Gaming, IGWB, Casino Journal, Casino Player, Strictly Slots and Atlantic City Insider. He has an B.A. in journalism and an M.A. in communications from Duquesne University in Pittsburgh, PA. He is the author of the books, How To Win Millions Playing Slot Machines... Or Lose Trying, and Atlantic City: In Living Color.  

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