Monday, April 10, 2006

Bill Peirce Says No to Monopoly Priveleges, Proposed Amendment is an "Abomination"

From my inbox this morning: A press release from the Bill Peirce for Governor Campaign. While libertarians don't have a problem with gambling, per se, we DO have a problem with the State doling out monopoly priveleges to politically connected special interests. Read below.


For Immediate Distribution
Contact: Charles Peirce, Campaign Manager
William S. Peirce, Professor Emeritus of Economics, Case Western Reserve University, and Libertarian Candidate for Governor of Ohio
(440) 471-0322 HQ
(216) 235-7049 Cell
charles.peirce@peirceforohio.com
www.peirceforohio.com


The Proposed Gambling Amendment is an Abomination

“Learn and Earn,” the flagrantly mislabeled casino gambling proposal, is the worst constitutional amendment ever suggested in Ohio. If it were adopted, it would award a perpetual monopoly of casino gambling in this state to the owners of 10 specific sites: the seven existing race tracks, the Tower City complex and the Nautica Entertainment complex in Cleveland, and one unpublicized entity “no more than 3 miles from Fountain Square” in Cincinnati. The Ratner family, Jeff Jacobs, Jack Hanessian, Keith Nixon, Charles Ruma, and Brock Milstein are fine people, of course, but why would we write into the constitution that they have the exclusive privilege of extracting billions of dollars from the people of Ohio? It is even more puzzling that the citizens of Ohio would award such privileges to corporations headquartered elsewhere, including Penn National Gaming of Pennsylvania, Magna Entertainment Corp. of Ontario, and the MTR Gaming Group of West Virginia.

Once this monopoly is written into the constitution, it cannot be taken away except by passing another constitutional amendment. When the billions start rolling in, however, the holders of the privilege will be able to outspend anyone who would campaign to take the privilege away. The voters of today really are binding their children and grandchildren into this deal.

Ohio is asking absolutely nothing in return for this permanent privilege. The “Learn and Earn” ballot issue would not require any payment for the 10 casinos. Indeed, by specifying who will receive the licenses, the proposal prevents competitive bidding. In places where casino licenses are put out to bid (Pittsburgh, for example), gaming companies pay plenty for the privilege. A good estimate is that Ohio is giving away a privilege that it could sell for $4 billion dollars!

The backers of the proposal will argue that state and local governments will receive annual tax payments worth hundreds of millions. Even there, however, Ohio will be short changed. Pittsburgh will extract a tax of 54%, even after taking hundreds of millions up front. The Ohio proposal calls for a tax of 39%! The backers have referred to a tax of 45%, but 6% goes back to the racetracks to subsidize breeding race horses, so that leaves 39% for the public sector. Even for the paltry portion that does go to the public sector, the designers of this proposal have had the arrogance to tell the legislature exactly how the money shall be spent.

I certainly hope that the people of Ohio will learn about this amendment before they give a few rich people a monopoly privilege that will earn them billions more.


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