Sustained Outrage

So, does gambling pay?

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The answer appears to be yes, and no.

Two political science professors have analyzed legalized gambling revenue and public spending in West Virginina in the most recent issue of “The West Virginia Public Affairs Reporter,” published by the  Institute for Public Affairs at WVU’s Politial Science Department.

In their report, “Counting the Chips: The Policy Consequences of Legalized Gambling in West Virginia”, professors Patrick A. Pierce and Richard A. Brisbin Jr., found:

— State and local governments have certainly become more dependent legalized gambling revenue. West Virginia received $25.4 million in gambling revenue in 1991, compared to $639.2 million in 2007.
— Municipal and county governments began receiving legalized gambling revenue in2003, when it amounted to $3.4 million. In 2007, cities and counties received $7.8 million.
Legalized gambling makes a small contribution to relatively low-wage job creation in the state.
— Social costs and problem gambling are difficult to measure, but an earlier study found that problem and pathological gambling was three to four times as common among people living closer than 50 miles from a casino compared to those living farther away. Practically every West Virginian lives within 50 miles of a video lottery outlet and five of the 10 largest cities are within 50 miles of a racetrack with electronic gaming.

— Earlier studies of education lotteries in other states found that real education spending per capita did not necessarily increase as much as could be expected with a lottery dedicated to support education. In fact, before West Virginia passed its lottery, West Virginians increased education spending more rapidly than other states that had education lotteries.
— During the first year of West Virginia’s lottery, education spending increased more than expected, but then fell off to a slower rate of growth than before the lottery was passed. The authors explain:

Hence, in the first year of an education lottery’s operation, education spending receives a one-time “bump” as legislators have not yet realized — or perhaps worry that citizens might notice — that lottery revenue could substitute for some general revenue funding educational programs.

Below is a table from the report that shows how lottery revenue has been spent by category since 2007.

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