In November 2013, New York State voters will decide whether to amend the state constitution to expand casino gambling. Currently, the state has five casinos run by Indian tribes. The proposed amendment would allow up to seven non-tribal casinos in areas not including New York City and not including areas, such as Western New York, where the state is bound by an exclusivity agreement with an Indian tribe. A law expanding casino gambling has passed the state legislature, but, because the state constitution forbids gambling, it will not take effect unless voters decide to amend the constitution. This policy brief argues that casino gambling creates far more costs than benefits and exacerbates poverty among the state’s residents

Cimasi, Michael

Leonard, Alexis

English

DigitalCommons@ILR

Cornell University ILR School 
DigitalCommons@ILR 
Buffalo Commons Centers, Institutes, Programs 
10-16-2013 
Casino Gambling Will Create More Costs Than Benefits in New 
York State 
Michael Cimasi 
Alexis Leonard 
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Casino Gambling Will Create More Costs Than Benefits in New York State 
Abstract 
In November 2013, New York State voters will decide whether to amend the state constitution to expand 
casino gambling. Currently, the state has five casinos run by Indian tribes. The proposed amendment 
would allow up to seven non-tribal casinos in areas not including New York City and not including areas, 
such as Western New York, where the state is bound by an exclusivity agreement with an Indian tribe. A 
law expanding casino gambling has passed the state legislature, but, because the state constitution 
forbids gambling, it will not take effect unless voters decide to amend the constitution. This policy brief 
argues that casino gambling creates far more costs than benefits and exacerbates poverty among the 
state’s residents. 
Keywords 
Buffalo, Poverty/Low Wage Work/Income Inequality, Exploitative Businesses, Policy Brief, PPG, PDF 
This article is available at DigitalCommons@ILR: https://digitalcommons.ilr.cornell.edu/buffalocommons/305 
1 
 
 
 
 
 
 
Casino Gambling Will Create More Costs 
Than Benefits in New York State 
 
Michael Cimasi and Alexis Leonard 
  
 
Introduction 
In November 2013, New York State voters will decide whether to amend the state 
constitution to expand casino gambling.  Currently, the state has five casinos run 
by Indian tribes.  The proposed amendment 
would allow up to seven non-tribal casinos in 
areas not including New York City and not 
including areas, such as Western New York, 
where the state is bound by an exclusivity 
agreement with an Indian tribe.  A law 
expanding casino gambling has passed the state 
legislature, but, because the state constitution 
forbids gambling, it will not take effect unless 
voters decide to amend the constitution.  This 
policy brief argues that casino gambling creates far more costs than benefits and 
exacerbates poverty among the state’s residents.  
 
Brief History of Casino Gambling in New York 
Gambling has long been seen as a societal problem, and it was banned in the New 
York State constitutions of 1821, 1846, and 1894.
1
  Three exceptions have been 
created since then to allow (1) the state-run lottery; (2) pari-mutual wagering on 
horses and dog racing; and (3) charitable gambling.
2
 New York also made 
gambling compacts with the Oneida and Mohawk Indian Tribes in 1993 and with 
the Seneca Nation in 2001, allowing for five tribal casinos.
3
  By 2004, New York 
was the third highest wagering state in the nation, behind only Nevada and New 
Jersey, with total wagering of $35 billion dollars.
4
   
POLICY BRIEF        October 16, 2013  
New York State voters 
should reject expanded 
casino gambling, 
because it will create far 
more costs than 
benefits. 
2 
 
 
What is Casino Gambling? 
In general, casino gambling consists of slot 
machines; table games such as poker and roulette 
make up a very small portion of casino revenues.
5
  
Casinos strive to create an atmosphere that 
encourages people to gamble for long stretches of 
time, and as often as possible. This commonly takes 
the form of long rows of slot machines illuminated 
with neon lights, complemented by cheap or free 
drinks and easily accessible credit.  Casino patrons 
bring only 40% to 60% of the money they gamble 
with them to the casino in cash; the remaining is 
derived from ATM withdrawals, credit markers, and 
cash advances.
6
 
 
What are the Social Costs of Gambling? 
Gambling often becomes an addiction that can lead 
to bankruptcy, depression, drug addiction, and 
crime.
7
  Most disturbingly, “approximately one in 
five pathological gamblers attempts suicide, and the 
suicide rate for pathological gambling is higher than 
for any other addiction.”8   
 
Problem gambling drives many people into 
financial ruin.  In a 1995 study of 105 bankruptcies 
in Minneapolis, over 50% showed gambling losses, 
averaging $22,000 per household.
9
  Gambling has 
been linked to higher rates of crimes such as 
larceny, burglary, and auto theft, as well as fraud, 
forgery, tax evasion, and confidence scams.
10
   
 
How does Casino Gambling Affect Poverty? 
Gambling is marketed as entertainment, but people 
with low incomes often turn to gambling as a “Hail 
Mary” attempt to get out of poverty.  Unfortunately, 
those with the least resources are the most prone to 
become problem gamblers.  The National Gambling 
Impact Study Commission found that “of people 
with incomes under $24,000, over their lifetimes, 
“Paralegal Pleads 
Guilty to Embezzling 
$311,000 from 
Elderly Widow to 
Support Gambling 
Addiction—Earns 
Prison Time Up to 4 
Years” 
-Buffalo News 
10/19/12 
 
“Employee to go 
prison, pay back 
$1.3M.” 
-WIVB 
7/22/13 
 
“Nun Faces Grand 
Larceny Charge Tied 
to Casino Gambling” 
- Buffalo News 
11/5/12 
 
“Mother Gambles 
Away Thousands of 
Dollars Meant to go 
Towards the 
Treatment of her 
Cancer-Stricken Son” 
-WGRZ 
9/14/11 
 
3 
 
7.3 percent are at-risk gamblers, 1.6 percent are 
problem gamblers, and 1.7 percent are pathological 
gamblers.”11  Furthermore, research has found that 
“people in the most disadvantaged neighborhoods 
gamble, on average, 72 times per year, while those 
in the least disadvantaged areas gamble only 29 
times per year.”12   
 
Already disadvantaged groups face particular harms 
from gambling.  Blacks are 30% more likely to 
develop a gambling problem than whites over their 
lifetimes, and Hispanics are nearly twice as likely.
13
  
Individuals without a high school diploma are 35% 
more likely to develop a gambling problem than 
college graduates.
14
     
 
In addition to hurting those currently living in 
poverty, gambling can cause a downward spiral, 
thrusting many working and middle class 
individuals into poverty.  As early as 1986, it was 
estimated that 1.4 million New Yorkers, or 7.3% of 
the Empire State, were problem gamblers – at that 
time, the highest rate of problem gamblers in the 
country.
15
   
 
Will Expanded Casino Gambling Help or 
Hurt the State’s Economy? 
In the current economy, law makers see casinos as 
quick revenue.  But one must investigate the cost of 
this immediate revenue. State casino revenue is like 
borrowing from a loan-shark: the cash spends 
quickly, but the compounding costs are 
economically and socially devastating.   As 
discussed above, of all individuals with incomes 
under $24,000, over 10% will engage in a level of 
gambling that make them at-risk gamblers, problem 
gambler, or pathological gamblers.
16
  State residents 
routinely gamble themselves to, or below, the 
poverty line and then need public assistance to 
make ends meet.  This vicious cycle will repeat 
“91-year-old Retired 
Priest Taken 
Advantage of by an 
Addicted Gambler 
for More Than 
$500,000” 
 
- Buffalo News 
10/31/12 
“A Postal Carrier 
Admits Stealing 
$400K From an 
Elderly Man to 
Finance a Gambling 
Habit” 
-Buffalo News 
7/12/13 
“Falls Roofer Admits 
Defrauding Now-
Destitute Elderly 
Man out of $600K” 
-Buffalo News 
5/16/13 
“Army Reservist 
Pleads Guilty on 
Fraud Charge” 
-Buffalo News 
5/29/13 
4 
 
itself, and the costs to government and society will 
outweigh the benefits.  The increased regulatory 
costs of gambling alone are huge.  A 1999 
Louisiana study calculated that state’s cost of 
gambling regulation to be $50.02 million per year.
17
   
 
It is unlikely that New York will become an 
international destination for “high rollers” or even 
out-of-state gambling tourists.  With the 
proliferation of casinos in the Northeast, the 
average distance traveled for casino gambling is 
continually diminishing.  According to researchers, 
the Northeast U.S. now faces gambling saturation, 
with dozens of casinos in New Jersey, Connecticut, 
and Pennsylvania, and casinos on the way in 
Massachusetts.
18
 Thus, most of the customers will 
be local state residents.   
 
The dollars spent at casinos and jobs added will 
simply take dollars and jobs away from other 
establishments (restaurants, bars, etc.) and 
employers in the casino’s immediate area.19  In this 
way, casinos will not create “new” jobs, but rather 
shuffle low wage jobs from one employer to 
another, while causing remarkably high levels of 
collateral damage in the process.  Furthermore, 
because slot machines are a very efficient way to 
make money with almost no human labor required, 
casinos will kill more jobs in other sectors than they 
create within their own walls.  
 
In short, state authorized casino gambling is fiscal 
and economic regression, not real economic 
development.  The social and fiscal woes that 
Albany will sow in this effort will far exceed any 
harvest from slot machine profit sharing—and the 
worst of these consequences will be visited on the 
most disadvantaged and at-risk populations in the 
state.   
 
“Arcade Woman 
Steals $1.3 Million 
from Employer, 
Spends on 
Gambling” 
-Buffalo News 
4/29/14 
“Housing Counselor 
Gets 6 Years for 
Stealing from 
Clients” 
-Buffalo News 
10/6/11 
 
“Jailed Lawyer Latest 
to Blame Casinos for 
his Crime” 
-Buffalo Business First 
9/6/12 
 
 
“Former Depew 
Teacher Pleads 
Guilty to Stealing 
from PTO” 
 
-WGRZ 
10/10/12 
 
5 
 
 
                                                          
1
 Senator Frank Padavan, All Gambling All the Time: Turning the Empire State into the Gambling 
State, Pg. 10 (April 2004) (“Padavan Report”). 
2
 Padavan Report at 7-11. 
3
 Meyer, Brian (2009). Ground broken for bigger casino (2009). The Buffalo News, 20 October 
2009. 
4
 Volberg, Rachel A. (1994). The Prevalence and Demographics of Pathological Gamblers: 
Implications for Public Health. American Journal of Public Health, 84 (2), 237-241. 
5
 Beebe, Michael, Dan Herbeck, and Lou Michel (2002). Senecas vote yes: slim margin favors 
gaming off reservation. The Buffalo News, 15 May, 2002. 
6
 Beebe, Michael (2009). Casino opponents file new federal lawsuit. The Buffalo News, 1 April, 
2009. 
7
 Padavan Report at 42. 
8
 Eadington, William R. (1999). The Economics of Casino Gambling. Journal of Economic 
Perspectives, 13(3), 173-192. 
9
 Gambling in American at 140. 
10
 Gambling in America at 133-34. 
11
 Better Government Association (1995). "Statement of J. Terrence Brunner, Executive Director," 
November 3, 1995 
12
 Blalock, Garrick (2007). Hitting the Jackpot or Hitting the Skids: Entertainment, Poverty, and 
the Demand for State Lotteries. American Journal of Economics and Sociology, 66(3), 545-570. 
13
 NGISC 1999 at 4-8. 
14
 NGISC 1999 at 4-8. 
15
 Padavan Report at 48. 
16
 Blalock, Garrick (2007). Hitting the Jackpot or Hitting the Skids: Entertainment, Poverty, and 
the Demand for State Lotteries. American Journal of Economics and Sociology, 66(3), 545-570. 
17
 Gambling in America at 144. 
18
 McKinley, Jesse and Charles Bagli.  “Success of Cuomo’s Plan for More Casinos Relies on His 
Power of Persuasion.”  New York Times, June 16, 2013. 
19
 Eadington, William R. (1999). The Economics of Casino Gambling. Journal of Economic 
Perspectives, 13(3), 173-192. 
 
Michael Cimasi drafted this brief as a law student at the SUNY Buffalo Law 
School.  Alexis Leonard supplemented it as a Cornell University ILR School High 
Road Fellow at the Partnership for the Public Good. 
 
 
 
 
Partnership for the Public Good 
www.ppgbuffalo.org 
237 Main St., Suite 1200, Buffalo NY 14203 
 
 


Casino Gambling Will Create More Costs Than Benefits in New York State

In November 2013, New York State voters will decide whether to amend the state constitution to expand casino gambling. Currently, the state has five casinos run by Indian tribes. The proposed amendment would allow up to seven non-tribal casinos in areas not including New York City and not including areas, such as Western New York, where the state is bound by an exclusivity agreement with an Indian tribe. A law expanding casino gambling has passed the state legislature, but, because the state constitution forbids gambling, it will not take effect unless voters decide to amend the constitution. This policy brief argues that casino gambling creates far more costs than benefits and exacerbates poverty among the state’s residents.povertylowwageworkincomeinequality__casino_gambling_will_create_more_costs_than_benefits_in_new_york_stateSTEVE.pdf: 68 downloads, before Oct. 1, 2020

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