By Dr. Mark H. Creech
Milton Berle used to tell the following story:
“The casinos wiped him out completely. Except for a single 1975 half-dollar, he was broke as the day he was born. Walking toward the highway, he kept tossing his coin in the air. His attention was diverted by an approaching car for a brief moment, just long enough for him to let the coin slip through his fingers. It rolled toward a grating in the street. He ran to retrieve it. An oncoming city bus hit him and sent him to the hospital for six months. Rather than risk an expensive court case, the city’s insurance company settled for a large amount of money on the poor victim.
Taking the money he’d received, he went through the casinos again. Again, he lost every penny. Starting back to the highway, he passed the grating and looked down to see if his coin was still down there. Again he was hit, this time by a taxi. The hospital stay was longer and more painful than the first. But the settlement was also larger.
Once more he tested the gaming tables. Once more he lost. Once more, as he walked to the highway, he looked down for his half-dollar. Once more he was hit by a vehicle.
In the hospital, he lay helpless, every inch of his body in traction. A visitor asked, “How could any man get hit three times in the same place? What made you keep going back to the grating?”
The man answered, “That half-dollar was my good luck charm. I didn’t want to lose it.”
Quite frankly, there’s more wisdom in that story than wit. Its moral is that gambling is always a losing proposition, often causing more pain than gain. Yet we hold on to it like a useless old lucky charm.
North Carolina, a state which has characteristically resisted gambling, is now headed down gaming’s dead end street. Under a 1994 compact negotiated by then-Governor Jim Hunt, Harrah’s Cherokee casino opened in 1997. The games the casino provided under NC State law were video-based. But for several years, the Cherokee have been pushing for Las Vegas style, Class III gaming, which draws a riskier clientele and is much more addictive in nature. The Cherokee have argued the new games will create hundreds of jobs, bring more tourists to the area, consequentially creating a boon for western North Carolina’s economy.
Those arguments resonated with Governor Beverly Perdue last year when she struck a deal with the Eastern Band under a new compact. The new compact, which the North Carolina Senate approved this week, is a significant expansion of gaming rights for the Cherokee. Not only does it allow for the more predatory Class III forms of gambling, but it also allows for up to four additional casino sites on tribal property. Of course, to make it all more palatable, up to 8% of the profits from these new games will go to fund education in the state.
The measure, which now goes to the NC House for consideration, should be rejected. And it might die in the House, if certain lawmakers remain true to their convictions against gambling. A bi-partisan coalition of both conservative and progressive lawmakers in that chamber makes the passage of the legislation uncertain. Nevertheless, there is no question that it will be a great challenge for these legislators to defy political pressures and not surrender to the seductions of the industry.
There are many reasons why approving the new Cherokee compact would be wrong for North Carolina, but none more fundamental than the fact that the business model of the gambling industry itself is dependent on addicted or heavily indebted citizens. It only works by taking away the freedom of these people. Harrah’s casinos across the country make 90% of their gambling profits from 10% of the players who participate in their gaming. By definition, people addicted to gaming and deeply in debt are not free, but enslaved. In a nation where freedom is paramount and meant to be vigorously protected, the state does a terrible injustice to its citizens and guests by actively endorsing, facilitating, or profiting from an industry that renders certain people as expendable.
Fundamentally speaking, casinos are the most predatory business in the country. And, regardless of all the accolades it receives by those whose pocket books are benefited thereby, regardless of how well-ordered the machine runs, it is inherently wrong. Moreover, it is worse for state government to partner with it in the name of “education.”
During the 1980s, Lee Iacocca was one of the most admired corporate executives in the country. He had taken charge of the Chrysler Corporation when the automotive giant was deeply in debt. He pulled it away from bankruptcy and created thousands of jobs for Detroit and other cities. His philosophy for success? “[T]here are no free lunches.” It’s all about hard work, he argued. “That’s what made this country great – and that’s what’s going to make us great again.”
But only ten years after his success with Chrysler, Iacocca changed direction. He went to Los Angeles, set up his own investment company with a new focus on gambling, including efforts to set up casinos in Michigan and provide in-flight gaming for airline passengers.
Iacocca’s professional change of direction is a dramatic reflection of a shifting paradigm from strong and admirable economic development in the Tar Heel state to dependence on profits from an enterprise that capitalizes on the weaknesses of others and offers false hopes – a disturbing picture of this state’s change of direction, and why it’s time to put on the brakes.
In his book, The Luck Business, Robert Goodman best summarized the matter in this fashion:
“Citizens should be able to look to government to protect their basic rights, not to promote destructive behavior and false promises. There is a lot that government can do to support job growth and to ease the dislocation and unpredictability that has become part of our economic system. To move away from the culture of chance and toward policies that promote genuine economic development will mean going beyond the hype of magic bullet cures and focusing instead on incremental, long term policies…This process will require patience, careful analysis, and honest discussion among leaders and their constituents. The reward will not only be protection of the economy, but a shift from the pathologies of hope to the creation of real hope.”
Indeed, in the long term gambling produces more harm than good. North Carolina would do well to lose any confidence it has in this useless old lucky charm.