Yang’s NYC Casino Idea is Good, Actually

In recent days Andrew Yang has begun spitballing proposals for a full-fledged casino to be licensed within city limits. The logic behind the timing of this move is pretty obvious — the next mayor will be inheriting a massive budget shortfall due to revenue losses during covid, and will have to find creative ways to make up this difference without stunting the post-covid economic recovery.

While Yang is right about some of that potential revenue being diverted to other states, a lot of the demand is also funneled into shady underground gambling dens which are littered all over the city. Just like every other vice we try to abolish with prohibition, the unlicensed and unregulated alternative is more insidious and dangerous than the legal version would be. Given Yang’s demonstrated interest in liberalizing vice laws to avoid the harmful effects of marginalization, it makes perfect sense that one of his first budget proposals would kill two birds with one stone in this way.

Sadly, the response to his proposal has been mostly negative in the local politics scene. Some ideological opponents choose to cherry-pick examples of underperforming NY casinos like Resorts World Catskills to insinuate that the proposed casino wouldn’t be profitable. This argument is completely without merit. We have our own Resorts World in Queens and it’s the single largest taxpayer in the city, generating more tax revenue some months than every single Las Vegas casino combined — and it’s just a glorified slots hub. A full-fledged casino with table games in a prime location would undoubtedly put even those record revenues to shame. Although it may be nice to fantasize about this revenue coming from more emotionally satisfying sources like “taxing billionares”, the reality is that we don’t have that luxury. New York City already has the highest tax burden of any major city, which has been causing the tax base to hollow out since long before the pandemic. Covid has put this trend on steroids, and recovery is not guaranteed.

Another common refrain from prohibitionists is that gambling only serves to increase inequality. Ironically, the only form of gambling that actually does increase inequality is the lottery — which has been legal and widely promoted in NY since the 1960’s. As with the case of cigarettes vs. marijuana, the reasons we end up with some things promoted and others prohibited is mostly due to entrenched social mores and historical accident. Hopefully potential mayor Yang, with his analytical outsider perspective, will ignore these entrenched voices and make any final decision based purely on the data.