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Economic Research

EconSouth Examines Role of the Dice

Most state governments rely on some form of legalized gambling—lottery, jai alai, racetracks, casinos—to help cushion against tax increases. But state budget deficits and dwindling gaming revenues have prompted some to ask if it's still a safe bet. Staff writer Ed English explores this question and others in "The Role of the Dice," featured in the first quarter 2010 issue of EconSouth.

The article looks at the different ways in which states are trying to squeeze more revenue from their gambling operations. Some are trying to expand their gaming industries, while others are considering reducing winners' payouts to give the state a bigger cut, writes English. However, experts caution that when other states have resorted to payout reductions, they saw a subsequent decline in sales.

Legal gambling operations, already under pressure from the decrease in consumer discretionary income, are also fighting competition from illegal Internet gambling. The online gambling industry is lobbying Congress to make Internet betting legal, which would open the shadowy industry to regulation and taxes and perhaps expand the gambling customer base. The current economic environment may make Internet betting more appealing, says English, but the ease of gambling from home may be too convenient, warn some gambling experts.

Moreover, no one is quite sure whether legalizing online gambling would help fill the gaps in states' budgets. "It's a conundrum that even has the oddsmakers scratching their heads," writes English.

To learn more about the Southeast's gambling industry and its impact on state government budgets, read the full article online.