March 17, 2006

Casinos, Monopolies, and the Right to Vote

Carroll Andrew Morse

Tracy Scudder of the Kent County Times reports that the West Warwick Town Council will vote on a casino resolution next week…

A casino item has been added to the West Warwick Town Council agenda for Tuesday night. The council will vote whether or not to ask the Rhode Island General Assembly to allow the voters to decide if there should be a casino in West Warwick.

The resolution reads: "We are memorializing the General Assembly to enact legislation to permit the qualified voters of the State of Rhode Island to vote on the establishment of a casino in the Town of West Warwick."

Casino supporters (and the Town Clerk) emphasize that the resolution is not an endorsement of a casino, just an endorsement of the people’s right to vote on a casino…
Town Clerk David D. Clayton said the resolution doesn't say that the council is in favor of the casino or against it.

The council is "just asking the General Assembly to enact legislation to allow the voters to vote on the subject," said Clayton. "This is strictly asking (the General Assembly) to do legislation so people can vote"...

If the governor is for the voter initiative, the governor should be for letting the people decide on the casino, according to [Councilor Jeanne] DiMasi.

"I think one way or another we will know if the people in Rhode Island want a casino," she said.

"What the council will be voting on is whether they believe that the people should have the right to vote on the issue. I think that is very important. So it will be very interesting to see how the two opponents of the casino on the council will vote on this because this is what the issue has become," said Council Vice-President Edward A. Giroux (D-Ward 3).

"Let the people decide. Let the people have a choice. Get it on the ballot once and for all and put it to bed."

However, if the West Warwick effort is really mostly about the right of Rhode Islanders to vote, then a gambling referendum that does not favor any specific town, corporation, or Indian Tribe should be acceptable.

And as the Cato Institute’s John Samples points out in today’s Projo, breaking the state-created monopoly on gambling is the most effective way to end the problems associated with gambling corruption (problems that spawned the creation of a lobbyist named "Abramoff")…

By raising barriers to market entry, government fleeces its citizens. The resulting monopolies also induce people to take risks with ethics and the law, in the interest of preserving their unjustified status. The government-created monopoly of Indian gaming and [lobbyist Jack] Abramoff's shenanigans are two sides of the same coin. That's the real scandal we're in danger of missing in the Abramoff affair.

What can we do? If the government simply permitted free entry into gambling, monopoly profits would be washed away by competition, reducing the incentive for wrongdoing. Should this prove politically untenable, a possible second-best solution would be auctioning off the right to enter the gambling business. Investors would pay sums for that right consistent with reasonable (not abnormal) profits.

What exactly is the rationale behind locking a provision for locking a single mega-casino in the Constitution -- besides the fact that a casino monopoly can make one town, corporation, or Indian tribe rich? If this really is about the right to vote on a casino, and not the casino itself, is there any reason why the sections of casino amendments creating monopolies are not disposable?