The weak economy is talking its toll on the gambling business. Vegas is getting squeezed and so is Colorado. The number of players is down and they’re betting less. Some Colorado casinos, like the giant Ameristar and the Riviera in Blackhawk, and Johnny Z’s in Central City, are doing OK, but most are hurting.
Singling out more profitable casinos with a higher “Ameristar tax,” for example, would be unlawful discrimination. So, the Colorado Limited Gaming Control Commission has decided to slightly soften the overall tax bite. This has displeased community colleges and historic preservationists.
What, you ask, is the connection?
When the voters approved limited-stakes gaming in Colorado in 1990, revenues were earmarked for historic preservation. In 2008, voters passed Amendment 50. Along with elevating the maximum wager from a paltry five bucks to a cool C-note and allowing the casinos to operate 2 4/7, it also added community colleges to the gravy train and awarded them the lion’s share of the rake.
Let’s be frank. It wasn’t for love of higher education that the casinos cut community colleges in for a piece of the action. It was a clever marketing strategy to broaden support for Amendment 50. While I supported it without the college connection, that addition drew some other voters in. Now, the colleges are hooked on the juice. Talk about looking a gift horse in the mouth: Rather than considering anything they get from the casinos as a windfall, the colleges and their supporters are blaming the gaming commission and the casinos for shortchanging education.
So how about the Colorado Lottery? Its profits are committed mostly to parks, recreation and open space. Some people may selflessly buy lottery tickets to support those causes. The great majority just hope to get rich quick. Amazingly, a Consumer Federation of America survey found that 50 percent of Americans with incomes between $15,000 and $25,000 a year regard winning the lottery as their retirement plan. From a gambling standpoint, the lottery is a tax on stupidity or desperation. It’s the worst bet in town. Your money odds on the little payoffs are terrible; on the big ones, astronomical.
By comparison, casinos pay out about 95 percent on their slot machines. (That means they keep 5 percent for themselves. It’s a business, you understand, not a charity.) If you’re a frequent slot player and you’re rational, it’s all about entertainment, not a steady income source. Instead of blowing your money on an expensive dinner, hockey tickets or a day on the slopes, you can try your luck at the casino. You’ll have some fun and, if you stay within your budget, the worst that can happen is you’ll be out the same amount.
On the other hand, there’s an upside possibility. Some days, you’ll go home with the same or more than you started with.
But let’s come back to the lottery. The guy at the convenience-store counter who sells you that ticket ought to have a mask and a gun. The Colorado Lottery takes about 50 percent off the top. In gambling parlance, that’s called the vigorish. Your local bookie’s vig is only about 10 percent. If you bet on the horses, the race track’s pari-mutuel vig is about 20 percent. That means only 80 percent of what was wagered is left in the pool to be distributed among winning bettors. The Colorado Lottery leaves a mere 50 percent in a pool. And if you win, you’ll have to pay state and federal income taxes.
I can afford to spend a few bucks on lottery tickets even after all I pay in taxes. But when it comes to gambling, I don’t make bad bets as a matter of principle. If you agree and also eschew the lottery, keep it to yourself. You may be accused of shortchanging Great Outdoors Colorado.
Freelance columnist Mike Rosen’s radio show airs weekdays from 9 a.m. to noon on 850-KOA.
