Casinos are the Answer?

March 4th, Wave-TV’s Steve Lankford’s Hot Button call out to House Speaker Jodi Richards to get it together and get casinos on the ballet compelled me to write.

Let's see how this is going to help Kentucky. First some facts. THE HOUSE ALWAYS WINS. So from all the funds generated by the casinos, the house (in this case the Sands Corporation) is going to take away the biggest portion of money. As any statistician will tell you, the odds are you are not going to win, and the casino stays ahead making money. THEY EVEN GET TO SET THE ODDS.

Now there are winners who take away money from the casino. Everyone I talk to tells me how much fun they had winning all the money. My friends are fortunate because they are the ones that win all the money. Of all my friends that enjoy games of chance, none of them ever mentions to me “how much fun they had losing their money to the casinos”. Again because they are the winners. I am a fortunate person indeed to have so many friends that can take advantage of the house odds. Does anyone have any friends that lose?

OK, I am told the winners will additionally spend their winnings in Kentucky but at the same time, I am told that our casinos will draw out of state visitors, so I will assume that out of state gamblers will be winning equally as well as our Kentuckians (Or are Kentuckians just better gamblers because of our rich history of gaming?) and I suppose that they will take their winnings back to the benefit of their state.

Lets look at Caesars as an example how casinos might operate in our state.
http://www.harrahs.com/casinos/caesars-indiana/hotel-casino/property-home.shtml?source=bkv4100017862
Caesar’s has a beautiful hotel for their guests. I assume they get to keep the profits of operating the hotel since they additionally have to “comp” the winners with luxury suites to keep them there an additional day so that the winners can break the house again or lose all of their reported winnings back to the house. I wonder how Kentucky hotels operators feel about more hotel competition coming into the state. I can only assume that the money generated on the casino hotels will also go to the Sands Corporation.

Well let’s assume that there is a big winner who is going to spend their money in our state. Well, not so fast, they still have to get out of the casino area first. Have you ever noticed the wonderful expensive restaurants that are in the casinos? Caesar's has two or three bars. Come to think of it I haven’t observed any Indiana restaurants or bars operating of out Caesar's. I wonder how restaurateurs and bar keepers of our commonwealth feel about this competition of their industry. Will local businesses be invited to occupy the casinos? I bet not.

Another curiosity is the number of luxury stores that are in casinos. As I walk through Caesar's I notice there are jeweler stores that sell very expensive jewelry to the big winners. You don’t even have to leave the casino to spend your money. Which also means it doesn’t make it to our state's businesses. They also sell inexpensive jewelry, I guess for the small winners. They even have a store where nothing is over 10 dollars. Since I don’t see any local Indiana jewelers operation in Caesars. I presume Caesars owns these jewelry stores and this is just an additional way to get their money back? So one can understand that casinos are well engineered and crafted to get all the winnings back from the gamer.

A long, long time ago, horse racing came to Kentucky and established a great tradition. Churchill Downs pays a tax that goes to the treasures of Kentucky, and because of the long tradition, they have been paying into the coffers for a long time. In 1988 Kentucky decided we still did not have enough money and brought the lottery to Kentucky. Since 1988 the lottery has expanded into several additional games, adding pull tabs and increasing the number of lotteries to two a week. Once again I will assume because we still did not have enough money.
http://www.kylottery.com/apps/player/about_us/history.html?id=about_us

(To better understand the lottery the reader can read my earlier blog on the KY Lottery. Saturday January 12th. Snake Oil Salesmen.)

Now once again there is not enough money in Kentucky and they want to institute casinos. I wonder if we might ask the legislators to just be fiscally responsible. An alternative is to live within our means. Is there a lesson here? I hope so. If we don’t quit living beyond the state's means, I don’t know where our commonwealth can go next to raise money? Well maybe prostitution or drugs could be the next options?

Sticks or Carrots?

Who would have thought Massachusetts would be more genteel than Kentucky? Judging by their respective Democratic politicians, that appears to be the case, at least with respect to gambling issues.

Whereas in Kentucky, the Democratic "leadership" instills loyalty on their side of the aisle by revoking committee assignments from Democrats who do not toe the party line, in Massachusetts, the Democratic bosses deal with their dissenters by giving them job promotions.

That's how SouthCoastToday.com sees it:

The politics of casinos seems to be dominating all thought on Beacon Hill.
On Wednesday, House Speaker Sal DiMasi announced the appointments of eight Democrats to leadership positions, raising their profiles and inflating their paychecks.

Of those eight, five have been proponents of expanded gaming, a position DiMasi has fought with all his being. So immediately there was speculation that the speaker was seeking to cut into support for Gov. Deval Patrick’s plan for three commercial resort casinos, which is expected to be considered by the House this spring.
Whether you believe DiMasi’s latest moves smack of political gamesmanship or not, the secrets and subterfuge going on here can’t match what’s happening in Kentucky.

Only time will tell whether sticks or carrots are better at keeping a herd of donkeys moving together in a straight line.

Please note: The postings of "G. Morris", written by John K. Bush and which end in 2016, stated his views as of the dates of posting and should not be understood as current assertions of his views. The postings, which have not been altered since they came to an end, remain on this blog to preserve the historical record. In 2017, Mr. Bush took a position that precludes further public political comments or endorsements. He will no longer be contributing to this blog.

Republican Senate Doesn't Even Have To Vote To Win In Frankfort

Here's a question Governor Beshear must be asking himself in light of today's casino amendment fiasco at a House Committee Meeting: Who needs Republican enemies with Democratic "friends" like these?

Please note: The postings of "G. Morris", written by John K. Bush and which end in 2016, stated his views as of the dates of posting and should not be understood as current assertions of his views. The postings, which have not been altered since they came to an end, remain on this blog to preserve the historical record. In 2017, Mr. Bush took a position that precludes further public political comments or endorsements. He will no longer be contributing to this blog.

The Cincinnati Enquirer Gets It

We're still waiting on the Courier-Journal to denounce Governor Beshear's "pay to play" politics. But at least today's Cincinnati Enquirer got the point:

"Pay to play" took on an added meaning in Kentucky this week, as casino operator William Yung III, head of Crestview Hills-based Columbia Sussex Corp., defended his $1 million contribution to an advocacy group whose TV ads helped elect Gov. Steve Beshear by underscoring the ethical woes of his predecessor, Ernie Fletcher.

Beshear has proposed an amendment to allow 12 casinos to be built in Kentucky; Yung already has declared that he wants one of the licenses for a casino on the Jillian's site in Covington, property he just bought for $7 million.

Both Beshear and Yung strongly deny that the contribution - along with a $10,000 donation to help fund Beshear's inaugural bash in Frankfort - is resulting in any extra consideration for Columbia Sussex in the state's possible Casino Derby.
Besides, the proposal by Beshear is considered by many a long shot. It must be approved by the legislature this spring, then by voters in November. If not, Yung's $8.01 million ante may be for naught. "Absolutely, we're gambling on it," Yung said. That's the spirit: Roll the dice.

Please note: The postings of "G. Morris", written by John K. Bush and which end in 2016, stated his views as of the dates of posting and should not be understood as current assertions of his views. The postings, which have not been altered since they came to an end, remain on this blog to preserve the historical record. In 2017, Mr. Bush took a position that precludes further public political comments or endorsements. He will no longer be contributing to this blog.

"Big-Money, Pay-to-Play Politics" That The C-J Apparently Likes

Given the Courier-Journal's professed concern for "big-money, pay-to-play politics," we were just sure that the C-J would run an editorial today taking Gov. Steve Beshear to task for his efforts to gamble with casino legislation. According to the Associated Press:

A wealthy casino operator is defending an eye-catching $1 million contribution to a political group that worked to elect a pro-gambling governor in Kentucky.

William Yung III, who heads Crestview Hills-based Columbia Sussex Corp., has essentially placed a huge bet that newly elected Gov. Steve Beshear will be able to get the state's long-standing prohibition against casinos lifted.

"I make no apologies for helping get Steve Beshear elected," Yung told The Associated Press in an interview this week. "I've got a First Amendment right to spend my money any way I want to spend it."

We agree with Yung's refusal to apologize for exercising his constitutional rights. We also think the disclosure of Yung's mammoth contribution speaks volumes as to the private interests that will reap huge financial rewards if Beshear's legislative agenda is enacted. In fact, the news of Yung's contribution should have been included on that flyer in our mailboxes yesterday instructing us to "Tell Frankfort to 'Let Kentucky Vote' on Expanded Gaming."

Meanwhile, the silence of the C-J 's editorial writers (although the C-J did publish one op-ed by an outside writer critical of casino legislation) suggests they have no problem with "big-money, pay-to-play politics" when the money being played helps fund Democratic-sponsored casinos.

Please note: The postings of "G. Morris", written by John K. Bush and which end in 2016, stated his views as of the dates of posting and should not be understood as current assertions of his views. The postings, which have not been altered since they came to an end, remain on this blog to preserve the historical record. In 2017, Mr. Bush took a position that precludes further public political comments or endorsements. He will no longer be contributing to this blog.

Snake Oil Salesman

The Courier-Journal reports that Kentucky will have a $500 million deficit in our new budget. The story implies that the Fletcher administration left Steve Beshear with this deficit. OK, even if it is true (each administration proclaims it doesn't have enough money from the previous administration), should we not be happy that the money was appropriated to the constituents?

My high school math teachers always pointed out the amazing properties of math. I find it politically expedient (amazing) that we have a shortfall of $500 million dollars and if only we could get a casino, that will bring in $500 million dollars, the exact amount that we need. Really! That is almost magical (amazing) how it always works out mathematically!

So the sales pitch begins. Our new governor gets elected, promising to bring in casino gambling. Surprise, surprise: he gets in office, and within days realizes that we need money, and even if he fixes the shortfall, it cannot be done in a year -- but maybe two years. (Here's another mathematical equation: Legislators + solving budget crisis = two years to pass constitutional amendment on casinos.)

I also took history. The greatest axiom is "history repeats itself." Maybe we can take a lesson from our Kentucky Lottery and see how much money the state might make from casinos.

A visit to the Kentucky Lotto web site states that that 27.5 percent of the money spent on a lotto ticket goes to the Commonwealth, 60 percent of the ticket price goes to the winners -- who might be from out of state. In addition, 6.3 percent is paid to retailers and 6.2 percent goes to marketing and operating expenses.

Sounds like a lot, doesn't it?

Something made me question these figures, so I made several calls to the Kentucky Lotto Headquarters and eventually spoke with Pam Jones. She told me that for every dollar a customer spends on a lottery ticket, half of it -- 50 percent -- goes to the MUSL (Multiple United States Lottery) Company. MUSL runs lottery systems for different states, and I suspect one would find it lobbies state legislators and pays for extensive advertising to promote the benefits of lotteries when they come up for votes.

Armed with this conveniently undisclosed information, we now know the above-quoted numbers are only exactly half of that for your dollar waged. So only 13.75 percent dividends go to the Commonwealth, only 30 percent goes to the winners, only 3.15 percent pays the retailers, and only 3.1 percent covers marketing -- while 50 percent leaves Kentucky. This is because we allow out-of-state people to organize the lottery. The lottery web page states that $1.4 billion has gone to the General Fund since 1989 (just under $8 million a year). But that also means that $1.4 billion has left our Commonwealth.

What might happen if we get casinos? Will they be run by state personnel or will they be run by big gambling concerns, that take half of our money out of state? Leaving aside for now the moral issue, are casinos mathematically wise?

What might be perceived as an easy fix could well prove to be very costly to the residents of the Bluegrass. I have an alternative solution that I will be post at another time.