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Gambling will certainly produce people not as smart as their phones.

To:
Siri
iPhone
Cupertino, California

Dear Siri:

Soon, if certain gambling interests and state legislators have their way, you will be receiving phone calls from Minnesotans making online bets. A little background may be helpful in examining just exactly how we’ve gotten to this point.

In 1980, Minnesotans were bombarded with political arguments that we should allow horse racing in Minnesota. Horses could always race in Minnesota, of course, but apparently they only do so when their owners can win money. The argument was multipronged; we needed pari-mutuel horse racing to spur that part of our agricultural economy devoted, apparently, to horses. It was also argued that pari-mutuel betting would produce such a gusher of tax receipts that Minnesotans would see a reduction in their tax burden. So extraordinary was the idea that we would actually have (gasp) legalized gambling in the state of Minnesota—limited only to racetracks—that a constitutional amendment was required. That effort was successful and the constitutional amendment allowing pari-mutuel betting was adopted in 1982.

What was not successful was pari-mutuel betting. Canterbury Downs, the only racetrack to emerge from this constitutional amendment, went bankrupt and passed through several owners. There don’t seem to be more horse farms in the state. What is painfully evident is that our tax burden has not gone down as a result of this increase in the amount of “sin” among us.

What did increase was the amount of gambling, which became legally and culturally permissible. The state had always allowed misnamed “charitable” gambling, primarily in the form of church-run bingo parlors. In any event, the Indian Gaming Act had passed Congress—due to the efforts of a Minnesota congressman, Rep. Gerry Sikorski—which allowed states to charter Indian casinos if the state allowed any form of gambling. Because the interest group was fierce to retain “charitable” gambling, the state had to enter negotiations to allow Indian casinos. In general, these casinos have been a boon to the economic development of the American Indians who own or operate a casino; for the tribes not so lucky, not so much. A state lottery soon followed (Fifty-seven percent of Minnesota voters approved a constitutional amendment in 1988 to authorize a state lottery).

Lotteries have been labeled by many, including the Wall Street Journal, a tax on stupidity. Without question, it is a form of regressive taxation. And it is an example of the state playing its citizens for suckers; all you have to do is to drop into your friendly neighborhood convenience store and observe who buys the various lottery “games.”

The Minnesota State Lottery which, again, was supposed to reduce our tax burden and help pay for our educational expenses (in addition to conservation efforts) has not achieved those objectives. In fact, the state adopted another constitutional amendment in 2008 to establish a sales tax, the proceeds of which go to pay for some of the things that the state lottery was supposed to pay for. Other states that have state lotteries experience the same minimal or negative return on their stupidity tax. Nor has Minnesota fared any better with technologically novel gaming efforts—remember when electronic pull tabs were going to pay a significant portion of the taxpayers’ obligation for the new Minnesota Vikings stadium? That hasn’t happened either.

And that brings us to online gambling, which we will no doubt be told will have wondrous benefits for taxpayers. What will be true is that online gambling will happen.

In fact, it is already happening. A simple check of any of the online research sites will quickly produce a list of hundreds of online gaming opportunities—some legal, some not. If the Communist Party of China and the repressive regime in Russia cannot stop the Internet, there is no way that bettors will be kept from betting opportunities online. This is particularly true given that we now have a state where gambling opportunities are ever-present.

However, there is something we can do.

Gambling will certainly produce people not as smart as their phones. The National Highway Traffic Safety Administration estimates that driving while texting is six times more dangerous than driving while intoxicated. And the difficulty is that people will play these games while driving. Just imagine Angry Birds: The Cash Edition. It will be exponentially worse when people are free to gamble on their hand-held device.

The remedy for this is quite straightforward: Require hand-held devices to disable texting and gaming applications while the device is in motion. This requires a federal solution and one that we should immediately embrace. The odds of this solution keeping people from serious injury are quite high. Yeah, you betcha.

Sincerely yours,

Vance K. Opperman
Smarter Than a Phone

Vance K. Opperman (vopperman@keyinvestment.com) is owner and CEO of MSP Communications, which publishes Twin Cities Business.

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