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State-Owned Casinos in Kansas Are Not the Cure for Government's Fiscal Problems, Taxpayer Group Says

by Pete Sepp / /

(Alexandria, VA) -- A state-run gambling industry is not the right recipe for a balanced fiscal diet in Kansas, according to the National Taxpayers Union (NTU), which has 362,000 members nationwide and over 4,500 members in Kansas.

"State-run casinos are merely a back-door method of filling government coffers in a time of skyrocketing government spending," said Pete Sepp, Vice President for Communications for NTU. "If Kansas politicians were truly interested in boosting a lackluster economy, they would consider cutting property taxes and income taxes to spur investment and make the state more attractive for businesses."

Many studies have criticized state-sponsored gambling operations for their mediocre results. A recent analysis by the Oklahoma Council of Public Affairs provided numerous examples. In 2006 casino gaming in Oklahoma was projected to bring in only 28 percent of the revenues the state expected to receive when it originally entered into a gambling compact in 2004. Illinois casino revenues have actually declined in the past several years, while receipts in Colorado and Mississippi have been relatively flat.

"Any government-owned or government-sponsored business is ultimately one for which taxpayers are on the hook if it fails to meet expectations," Sepp added. Worse, he noted, these schemes have a proven track record of operating at a high cost and achieving a low level of performance. NTU has encountered such problems before in its work to reform government and quasi-government outfits like Amtrak, the U.S. Postal Service, and the scandalized Fannie Mae. "Contracting with private firms for casino operations won't change the fact that taxpayers will share at least some of the risk of this venture," Sepp said. "Kansans should be immediately wary of heavy-handed government involvement in any industry, even the gambling industry."

Kansas already has an unemployment rate and a tax burden above the national average. According to the Tax Foundation, Kansas's business climate ranks 31st nationally, worse than its neighbors Missouri (15th), Oklahoma (21st), and Colorado (14th). Introducing a state-owned enterprise into this mix is not likely to lure competitively minded firms to the state.

"Gambling hasn't proven to be a cure-all for state revenue doldrums, yet Topeka can't seem to grasp this fact," Sepp concluded. "Rather than control the business of gambling and take the matter out of citizens' hands, Kansas officials should encourage private competition and get into the business of controlling government expenditures. With an estimated increase of 10.4 percent in the most recently approved budget, there's plenty to pare back."

Note: NTU is a non-partisan citizen group founded in 1969 to work for lower taxes, accountable government, and economic freedom. For further details, visit www.ntu.org.

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