Senator-Elect Al Novstrup and I agree that video lottery is a terrible way to fund state operations. Novstrup said (at about 53:00 in our November 4 KSDN radio debate) said the state neglects the hidden costs of addiction, embezzlement, and broken families on which the gambling industry makes its millions.
Early in his successful push to cap payday loan interest rates at 36%, café owner and activist Steve Hildebrand said he wants to rein in video lottery, another key component of what he calls the “poverty industry” in South Dakota. If he was inspired to consider that political foray back in 2015 by the initial positive response to his rate cap petition, he must feel even more inspired now seeing more than 75% of South Dakota voters willing to vote for a business regulation that has an exploitative industry squealing.
If Novstrup and Hildebrand would like to join forces to regulate video lottery, they can find great support for the case against state reliance on gambling in this new article in The Atlantic which shows that, just as payday lenders depend on hooking desperate people into debt they can’t escape, casinos base their business model on luring gambling addicts and sucking them dry.
The preferred mode of gambling these days is electronic gaming machines, of which there are now almost 1 million nationwide, offering variations on slots and video poker. Their prevalence has accelerated addiction and reaped huge profits for casino operators. A significant portion of casino revenue now comes from a small percentage of customers, most of them likely addicts, playing machines that are designed explicitly to lull them into a trancelike state that the industry refers to as “continuous gaming productivity.”
…Problem gamblers are worth a lot of money to casinos. According to some research, 20 percent of regular gamblers are problem or pathological gamblers. Moreover, when they gamble, they spend—which is to say, lose—more than other players. At least nine independent studies demonstrate that problem gamblers generate anywhere from 30 to 60 percent of total gambling revenues [John Rosengren, “How Casinos Enable Gambling Addicts,” The Atlantic, December 2016].
We recognize that letting people drink too much alcohol harms all of us—drunk driving, domestic abuse, lost productivity, crime to feed the addiction. We thus impose legal liability on those who sell alcohol: if a bar keeps serving someone who has clearly drunk too much, and if that drinker then goes out and crashes his car into another drive, the bar bears some legal liability, at the very least a penalty for selling to an intoxicated person (SDCL 35-4-78). Bartenders thus cut customers off if it appears customers have drunk enough for one night.
Rosengren’s essay suggests a similar solution to protect us from excessive gambling. Why not hold casinos liable for damages—embezzlement, family neglect—caused when they allow customers to burn up their monthly paycheck in one long bender entranced before the video lottery terminal? Why not impose a daily limit on how much a person spend on video lottery in one day, say, $100? That seems a rather liberal limit—a gambler maxing out every day would blow $36,500, a bit more than three quarters of the personal per capita income in South Dakota in 2015. I’m willing to suggest that anyone blowing that much money on the most solitary form of gambling entertainment isn’t doing it for fun or as an expression of personal liberty; a person spending over $30,000 on video lottery probably has a problem and needs help.
So let’s enlist the video lottery industry’s help. Let’s impose a $100 daily limit on video lottery spending in any one establishment. Let’s establish something like our dram shop law or the bet limits we have in Deadwood: let a gambling addict keep gambling—i.e., let someone spend more than $100 in one day at your video lottery terminals—and you at least pay a fine or suffer some suspension of your license.
Senator-Elect Novstrup, would you like to introduce this bill? Or shall we leave it to petitioner Steve Hildebrand and the people of South Dakota to initiate another common-sense regulation against an industry (and, in this case, a state) that exploits addicts?