Don’t bet too big on gambling revenues

Don’t bet too big on gambling revenues

The Platte Institute has not taken a position on gambling issues, and I don’t expect that we will. But Nebraskans living near the Iowa state line bring this issue up all the time and may be asked to weigh in on it at the ballot box someday soon.

A Sioux City Journal article republished in the Lincoln Journal Star highlights the growth of sports betting at Iowa casinos after it was legalized by the Iowa Legislature earlier this year.

I think it’s possible to come up with several good arguments for and against legal gambling. There is certainly the economic freedom argument that it’s none of the government’s business to tell an adult that they can’t bet on a football game or play a hand of blackjack with their own money.

But another assumption that is often made from a fiscally conservative perspective is that legalized gambling will help move government away from the current taxes we all love to hate.

I think with some notable exceptions where a lot of people are coming into play (Nevada, for example) that argument is blown way out of proportion.

Just because casinos will make a good amount of money from legal sports betting, for example, does not mean that tax collections will be significant or that policymakers will use the revenue to give Nebraskans a meaningful break on their taxes.

Here’s the state of Iowa’s take from sports betting since August:

“Overall revenue from sports betting — accounting for winner payouts — grew from $4.9 million in September to $5.6 million in October and stood at $12.78 million for the year to date, according to commission data. Sports betting has brought in $861,846 of state tax revenue based upon a tax rate of 6.75%.”

I stand in judgment of no one who chooses to gamble for a little amusement. You might even catch me at the video poker machines at Harrah’s on a rare occasion.

But while something short of $1 million is nothing to sneeze at, it’s also nothing to get your hopes up about when you consider how much state government really costs.

Want more? Get stories like this delivered straight to your inbox.

Thank you, we'll keep you informed!