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Monday, April 28, 2008

When Government Encourages Blight

South Dakota legalized video lottery in 1989. Since then, the gaming has brought a steady stream of revenue ($110 million a year in 2006)...and a steady stream of broken lives and societal ills.

Video lottery has been called "the crack cocaine" of gambling because of its highly addictive nature.

A study conducted by Mountain Plains a few years ago found that for every $1 million spent on video lottery we "buy" 172 crimes as a result. These crimes range from burglary and bad checks, to child neglect when parents leave children unattended or let them go hungry while the addiction is fed.

Gambling addiction also has an adverse impact on the economy, with 41.9% of gamblers reporting absences from work for gambling related activities. The average missed time is three days per month.

In 2007, South Dakota budgeted $244,000 to help pay for gambling addiction treatment.

Interestingly, we had an illustration about 14 years ago of the power of video lottery addiction. For 100 days, video lottery in South Dakota was shut down while the South Dakota Supreme Court declared the practice unconstitutional; voters subsequently approved a constitutional amendment reauthorizing video lottery.

A report entitled “Video Lottery and Treatment for Pathological Gambling: A Natural Experiment in South Dakota” published in January 1996 in the South Dakota Journal of Medicine, calls the 100-day 1994 shutdown of video lottery a “natural experiment” where treatments for gambling addiction dropped 93.5%.

The state of South Dakota quickly became as addicted to the revenue stream from video lottery--as addicted as many of the gamblers themselves. With fears fueled about lost government services and the specter of an income tax raised, the four attempts to end video lottery in South Dakota have failed.

Now the Argus Leader brings the report that Sioux Falls wants to close a loophole that allows video lottery within 2,000 feet of parks or schools. However, the state government is telling the city of Sioux Falls they have no power to regulate video lottery in their own jurisdiction.

According to the article, Sioux Falls passed an ordinance in 2001 prohibiting video lottery within 2,000 feet of schools and parks, but gambling establishments found a loophole involving liquor licenses. The city council now wants to close that loophole.

But in a letter to City Attorney Gary Colwill last week, Secretary of Revenue Paul Kinsman warned that only the state can regulate video lottery.

"In sum, it is the state's position that the city of Sioux Falls does not have the legal authority under the South Dakota Constitution to regulate video lottery as it attempts to do in the proposed ordinance," Kinsman wrote.

The article says Aberdeen went through a similar experience this year and was smacked down by the state.

The article indicates Sioux Falls may take the issue to court, and some think the city has a pretty good chance of winning.

The rule of law is important. But if the rule of law is preventing a municipality from protecting its citizens, the rule of law should be changed.

Knowing how long legal processes can take, changing existing law may be quicker and less expensive than going to court. This may be something the legislature should look at taking up in next year's session.

We don't need need video lottery parlors near schools and parks, normalizing and enticing young people toward this destructive behavior. And we don't need people leaving casinos drunk--driving or walking--near schools and playgrounds.

It seems the city council of Sioux Falls is trying to protect people, but the state is trying to tie their hands in order to guard its revenue "fix."


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