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The
State of the States on Gaming Revenue
The recent Big Game Lotto windfall
that went to two winners provides for a very interesting
subject of discussion. The total Big Game jackpot
amounted to $363 million dollars. Nearly half
of that jackpot was allocated for state and federal
taxes. Just where does all that money go after
it is paid to the states? Half of that Big Game
jackpot was $181.5 million.
Let's take a look at this scenario.
The Big Game is offered in Georgia, Illinois,
Maryland, Massachusetts, Michigan, New Jersey
and Virginia. People from neighboring states flocked
to participating states in order to buy their
chances of hitting "the big one." Long
lines at convenience stores and gas stations were
common.
The effect of gambling on the
public as a whole is a highly debatable subject.
Arguments can be made both ways. Large portions
of the proceeds benefit the public. Proceeds are
used to provide for new fire fighting equipment,
books for schools, and even senior citizen programs.
On the other hand, many people lose. Some of those
people are addicted gamblers, others are people
who risked more than they could afford in hopes
of winning "the big one." Putting that
issue aside, let's take a look into a deeper question.
Are states addicted to gaming proceeds?
Much like addicted gamblers,
many states have become addicted to the lottery.
The states are big winners no matter who wins
the jackpot. There is no question that lottery
proceeds are a significant source of funding for
states. One could make a case that states have
developed a dependence on lottery proceeds. Similarly,
states have developed a dependence on casino gaming
revenues.
States are meeting and surpassing
budgets that they may not been able to meet. In
the past few years, this fact has driven many
states to consider land-based casino gaming within
their borders. Existing lotteries and casinos
are now expanding the type of games they offer.
New slot machines, multi-line video poker machines,
new types of table betting, and even new table
games are being introduced. More recently, gaming
companies and states have pondered how Internet
gaming can be a viable form of revenue. Can you
imagine, not having to wait in line for a lottery
ticket? Just log onto the "state sponsored"
lottery site and click away.
Since 1995, Internet gaming has
literally exploded. Although it can never be a
complete substitute for the complete land-based
casino atmosphere, virtual gaming is becoming
increasingly popular for many reasons. An anonymous
virtual gambler said, 'the convenience factor
is a big benefit for me. I live in Midwest Pennsylvania,
and the nearest casino is hours away. I also have
children, which makes it difficult to get away.
I can pull up a chair and play while the kids
are sleeping in their own bed." New technology
and its popularity are forcing state and federal
legislators to discuss Internet gaming issues.
Bally Gaming and Systems has been the first and
only company that has had success in developing
and getting regulatory approval for its online
gaming architecture, Remote Access Verification
System (RAVE).
A recent news article noted that
New Jersey is considering Internet gaming. Similar
reports have noted that Nevada as well as Indian
Reservations have already considered Internet
gaming. A congressional committee will convene
to debate New Jersey and its proposed Internet
gaming at a hearing scheduled for later this month.
Due to an insurmountable amount of questions including
technology challenges, and regulatory issues,
a definitive answer is still probably years away.
CJ Gamble
CasinoJudge.com
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