–Where the states should put casinos and gambling machines.

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

We long have passed the stage where the debate about casinos and gambling involves morals. State governments all over America have sponsored casinos, lotteries and gambling machines. The question, if one were to speak honestly, is not whether gambling hurts the poor (it does) or seduces the ignorant (it does) or rots our moral fiber (it does) or will be controlled by the seamier elements of our society (it will). Those questions have been answered and the answers have been ignored.

The sole question now is how best to add money to a local governments’ treasuries. And that is why, in my home, Illinois, a state desperate for money, one of our few governors who has not yet been sent to jail, is taking an interesting and possibly clever position.

Chicago Tribune. 1/8/12, Quinn likes odds for Chicago casino deal. But push for slots at racetracks could still prevent accord.
By Monique Garcia

Gov. Pat Quinn says he’s optimistic a deal can be reached this year to bring a casino to Chicago, but negotiations are shaping up to be long a difficult as his stance against slot machines at horse racing tracks hasn’t changed.

Last year, lawmakers passed a gambling expansion that would have added casinos in Chicago and four other locations across the state. The bill also included slots at tracks and would have allowed the city to install slot machines at Midway and O’Hare airports.

Ignore the certainty that Quinn’s objections are strictly political, having to do only with whom of his friends would benefit, and instead innocently think about what would benefit the state of Illinois. Like every state, county, city and village in America, Illinois is monetarily non-sovereign. It does not have the unlimited ability to produce the dollars to pay its bills. In fact, it currently is behind in servicing debt.

Monetarily non-sovereign governments can survive long-term only if they have money coming in from outside their borders. There is no exception to this. They cannot survive on tax money alone, because taxes merely circulate the same money within a state, and even $1 in net imports reduces that state’s money supply, thereby guaranteeing a local recession.

Thus, gambling helps a state only to the degree that it brings dollars in from across its borders. Domestic gambling helps not at all, and in fact hurts, when the casino operators either import anything or pay dividends to outside share holders.

That said, the best place for any casinos and any gambling machines is the place most likely to be frequented by out-of-towners. In Illinois, downtown Chicago would be a great place. It hosts millions of visitors, who carry lots of out-of-town cash. It also is right on Indiana’s border, where Indiana wisely put a casino to steal Illinois’s money.

Chicago’s O’Hare and Midway airport gates would be wonderful for gambling machines, and there currently is a hotel right on O’Hare airport grounds — a terrific location for a casino. O’Hare especially, is a massive transfer point, where the world’s travelers must cool their heels between flights.

Where else? Race tracks? Not so much. Quinn is right (though probably for the wrong reasons.) They surely have “alien” business, but I suspect this is not a big part of their attendance. How about border cities? Illinois already has a casino at East St. Louis, right on the border of St. Louis, MO. I don’t know anything about that casino, but if it’s run properly, it should pull major dollars from Missouri.

Danville, Illinois is on route #74, a gateway to Indianapolis, IN. Southern Illinois isn’t particularly close to any population centers, but Illinois does have a casino in near the southern tip, and it’s close to the (small) Cairo regional airport.

Yes, gambling is the work of the devil, and is subject to all sorts of criminal activity. That’s a given. But if handled properly, it can bring in money from outside a state’s borders — something that is necessary for all monetarily non-sovereign governments. So, all of you who reside in states other than Illinois should look at a map of your state and surrounding states, and you’ll know where gambling would benefit you most.

Now, please don’t ask me what would happen should all states do this.

Rodger Malcolm Mitchell

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports


10 thoughts on “–Where the states should put casinos and gambling machines.

  1. Based on what has happened in the state I live in, NSW, I’m not sure you really want to go down the path of introducing slot machines as a revenue source. As far as regressive taxes go, they are about the worst possible, given that the majority of revenue comes from that minority percentage of heavy and/or addicted gamblers, many of whom destroy marriages, lose houses, or some have even committed crimes to support their gambling. Plus once they’re in, it’s near impossible to get rid of them because both the operators and governments don’t want to give up the income they generate.


    1. Yep exactly this. A neighbor of mine, a retired professor from Drake University in Des Moines, got hooked on gambling at our racetrack/casino in one of our suburbs. He really didn’t have any good retirement activities and just started going out there hanging around and gambling a little bit. He got hooked and lost all his savings, went through his retirement accounts, everything. I think he and his wife got to keep the house. He got counseling and got off gambling, but it was too late to keep from ruining what was left of his life. I don’t even really know what eventually happened to him. He may have died or been divorced by his wife. She had a decent job of her own so she was OK and eventually sold the house and moved to Arizona.

      We have senior housing facilities downtown and elsewhere in the city where buses line up to take the residents to this casino where they blow through their SS and retirement pension checks. Of course, a lot of the same people bellyache about paying a penny of taxes for ANYTHING, including schools, because “government wastes so much money.”


      1. Tim that’s a good example of how gambling addiction can affect all classes and education levels.

        It’s a difficult issue to deal with, as you don’t want to ban gambling outright and introduce a very nasty underground criminal element who will supply this desire, but the other extreme where the NSW govt in the late 90s allowed all pubs (bars) to install pokie (slot) machines is at least as bad, as it basically turned them all into mini casinos, and making it extremely easy for the entire population to gamble. It was an incredible windfall for existing Pub license holders, making many of them quite wealthy in the following years, but it’s been at a high cost to many individuals. It also hastened the decline of a once vibrant live music scene in Sydney, as pubs turned rooms that bands played in, into ‘Pokie Lounges’.


  2. Hi Rodger and All,

    I am next door in Iowa. We have got the casino bug big time. It has been our favorite form of “economic development” for several years. Here is a link to an interesting map on our Racing and Gaming Commission’s website that illustrates Rodger’s point:


    We have 21 casinos in Iowa! That includes 3 Indian casinos and the rest licensed by the State. 8 of them are in Mississippi River towns. Rodger, we are getting plenty of money from your fellow Illinoisans 😉 LOLZ 6 others are on the Missouri River, including 3 in Council Bluffs, across from Omaha. Only 4 are “interior” locations. The one in Larchwood, in the extreme northwest corner of that map, is the most recently built. It is a stone’s throw from Sioux Falls, SD (pop. 154,000). That license slot was desired by a group from Fort Dodge, which is quite far into the state. It was decided that site would draw more from already existing casinos than it would “new” dollars. I don’t know if the in-state vs. out-of-state dollars argument was a consideration, but it probably was. Plus, the backers gave an illegal campaign contribution to the incumbent governor while the application was being considered!

    Larchwood will probably be the last for a while, maybe forever. The commission apparently thinks that 21 is enough casinos for a state the size of Iowa. Gee, ya think?

    Interesting post as always, Rodger.


    1. Thanks Tim,

      The U.S. states, being monetarily non-sovereign, are identical with the euro nations, but for the fact that the federal government helps support the states via deficit spending.

      At http://www.nemw.org/index.php/iowa you will see that in 2009, the federal government spent about $29 billion in Iowa and took out (in taxes) about $18 billion. So you folks came out about $11 billion ahead.

      By contrast, New York received about $195 billion, but paid about $200 billion. So they were screwed out of $5 billion, by the debt hawks.

      One state that took a real hosing was New Jersey. They paid the federal government $38 billion more than they received. That’s about $4 thousand dollars for every man, woman and child in the states.

      And I’ll bet at least half of them think the federal deficit should be reduced!!

      I may write a post on this.


  3. or will be controlled by the seamier elements of our society (it will)
    Here lotteries used to be monopoly of a charity, with the proceeds going to social projects, and casinos used to be State monopoly. The EU thinks all businesses are the same, so the monopolies should end.

    Damn EU.


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