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November 7, 2013

Our Opinion: New York referendum further saturates casino market

NEW CASTLE — An old saying goes that nothing succeeds like success.

And that’s undoubtedly part of the reason New York voters approved a referendum Tuesday that will dramatically expand casino gambling in that state.

As a result of that ballot issue, the Empire State will add as many as seven casinos to its already existing stable of racetracks, video lottery terminals and Native American casinos.

New York Gov. Andrew Cuomo praised the referendum results: “This vote will keep hundreds of millions of dollars spent each year in neighboring states right here in New York ...”

A quick check of the map will show Pennsylvania is one of those neighboring states Cuomo is referring to. Interestingly, several of the new casinos will be located along New York’s southern tier, near the Pennsylvania border.

There’s no doubt Pennsylvania’s perceived success with casino gambling is a factor in New York’s move. The commonwealth has become the largest generator of casino revenue in the nation.

It’s no coincidence that Pennsylvania and Ohio are both pushing for casinos and horse tracks in this region right at the border. In many ways, casinos are the reverse of old frontier forts. Instead of deterring outsiders, they are intended to lure them in.

For government and politicians, expanded gambling has the advantage of generating revenue without increasing taxes. The argument is that gambling is a voluntary activity, with individuals having the choice of providing money to government or not.

And for a while, casino gambling in Pennsylvania had the look of an ever-growing golden egg, with new revenue records set every month. But recently, that trend has reversed. Apparently, people either have only so much money they are willing to lose at casinos or they are getting bored with the gambling thing.

Yet if government becomes accustomed to a certain level of gambling funds, a decline in players creates a problem. And this difficulty is compounded when neighboring states have the audacity to establish their own casinos as competition.

Meanwhile, the expansion of gambling inevitably creates new pressures to offer betting opportunities for other sources seeking a piece of the action. In Pennsylvania, legislation is under consideration to allow bars and restaurants to offer small games of chance.

But that move is drawing fire from volunteer fire departments and other nonprofit organizations that now have the ability to run these games. They view the competition as a threat to their revenue. And they’re probably right.

The reality is that even gambling has its limits as a money maker. And it’s looking like Pennsylvania has reached its threshold.

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