Thursday, January 12, 2006

According to the Peoria Journal Star (1/11/06, page A1), the Governor of Illinois is proposing an extensive capital improvement program including the construction of schools.  The school construction would be financed by adding another method of gambling within the state—Keno.  According to the report, the governor believes he can do this without legislative approval because it is a form of a lottery which is already authorized by state law.  


Yet, he is quoted as saying “‘I equate it to Bingo, which you see in church (not my church—my addition!) halls all across the state….’  ‘It’s a game that’s very much like Bingo.’” (page A6)  So to the governor, it is both a lottery and a game similar to Bingo.  The question of course is, if it like Bingo, does the authority exist to create it without legislative approval?  He claims he has that authority.  He claims a lot of things.

According to a companion article on page A6, the governor wants to provide $500 million for school construction.  Yet, according to the same article, his office estimates that the new Keno (lottery-bingo game) would generate $40 million the first year and $80 million each year after the first year.  However, if those estimates are accurate, without other sources of revenue it would take almost seven years to generate $500 million dollars.  The article is unclear if this is a seven year project or if other sources will be used to finance the construction.  

Another problem, of course, is the estimates on increased revenue.  Since they are estimates, they may or may not be accurate in the prediction of the amount actually generated.  From what I have observed in the past, these types of estimates tend to be over generous in their predictions of new money.


Furthermore, the proposal obviously is based upon the need to increase the amount of gambling which occurs in Illinois.  Only three results are possible under this proposal.  The first one is certainly not desirable based upon the governor’s goals.  It is possible but surely not likely that the overall amount of gambling in money spent will decrease.  The governor certainly does not want that to occur.  The second possibility is that money already being spent on gambling will be shifted to Keno resulting in no net increase in money gambled.  That may be a possible result.  If it is, the school construction program will benefit but either other public gambling will suffer, private gambling will suffer, or a combination of the two will suffer.  

The third possibility is that the overall amount spent on gambling in Illinois will increase.  If that occurs, it means that money that would otherwise be spent on other goods and services or money that would have been saved will now be spent on increased gambling.  Gambling does not increase productivity.  It is nothing more than a shifting of resources from one group to another.  Unless all increase in gambling comes from out of state (in which case those states are hurt) some portions of the Illinois economy must suffer if increased amounts of money are spent on gambling.  Gambling in and of itself does not create money.  It simply shifts wealth from one group to another—that is basic economics.    


This negative concern is obvious to those who recognize the moral problems associated with gambling.  This is a classic example of an immoral means being used to justify a positive end.