Andy Rooney takes on gambling

Part-time economist and full-time curmudgeon Andy Rooney trashed the gambling business in a recent 60 Minutes piece:

The thing that bothers me most about gambling is that people fritter away money so they don’t get to spend it on things that someone else has been paid to produce. Gambling produces nothing.

There’s only so much money in the world and if it’;s lost at a gambling table, it’s money that isn’t spent on things America makes. I mean who’s best for this country – a machinist at an automobile plant in Detroit or a blackjack dealer in Las Vegas?

The gambling casinos keep something like 20 percent of everything bet for themselves, so there’s no chance of anyone but the casinos winning over a period of time. They make billions – and where do the billions come from? They come from all of us because we’re the losers. I mean, suckers is what we are.

via Andy Rooney and the Gambling Business – 60 Minutes – CBS News.

The whole thing is weak; I’d like to see a debate between Rooney and, say Peter Collins on the subject. I thought I’d refute the three paragraphs I quoted just for fun, and to set the record straight.

1. “…people fritter away money so they don’t get to spend it on things that someone else has been paid to produce. Gambling produces nothing.”
Ever heard of a post-industrial economy? Since at least the 1960s, less and less “stuff” is being made in America as the country, for better or worse, shifts towards a service-based economy. More than two-thirds of the United States’ gross domestic product (67.8%) is produced by services; less than 20% comes from “things that someone else has been paid to produce.” Gambling “produces” as much as a movie theater or dog-walking service–Rooney, I assume, has no problem with either of those. The funny thing is that Rooney’s worked in television for decades, providing a service to millions of Sunday viewers. Does he think his life has been wasted because he wasn’t hammering steel ingots?

2. “There’s only so much money in the world and if it’s lost at a gambling table, it’s money that isn’t spent on things America makes. I mean who’s best for this country – a machinist at an automobile plant in Detroit or a blackjack dealer in Las Vegas?”
See point (1), with the added point that most of the “stuff” we buy isn’t made in America. By attracting about 5 million foreign tourists to Las Vegas, who left more than $840 million in gambling losses here (estimate based on 2009 LVCVA stats; probably lower than real number), I’d say that gambling is doing its part to lessen the trade deficit.

Rooney suggesting that a Detroit machinist is intrinsically better for America than a Las Vegas blackjack dealer is curious. Why does he think this? Is there something morally superior in making cars?

3. “The gambling casinos keep something like 20 percent of everything bet for themselves, so there’s no chance of anyone but the casinos winning over a period of time.”

Second half of the statement is true, but the first is wrong: casinos keep, on average, nowhere near 20 percent. If Rooney has a research staff, he should fire them, because they could have gotten the right number from the Center for Gaming Research’s website’s 2009 Nevada Gaming Win Summary.

The real totals for Nevada’s casinos in 2009 were:
Slot Machines: $6.8 billion revenue, with casinos keeping 6.10% of all money bet.
Table Games: $3.4 billion revenue, with casinos keeping 12.04% of all money bet.
Total gambling win was $10.3 billion, with casinos keeping 7.37% of all money bet.

Nevada casinos actually kept less than eight percent of everything bet, less than half of Rooney’s estimate.

I don’t have the data to back this up, but I’d suggest that Americans lost more than eight percent of what they’d “invested” in their financial portfolio’s last year. I can definitively say that if you took the money you paid for an investment property in Las Vegas in 2006 and put into video poker instead, you’d probably have done much better.

So there’s more emotion than reason in this outburst from Rooney. Not that you’d expect more from a guy who makes his living complaining about Lady Gaga and the decline in the quality of the funny papers, but like I said on Friday, if you don’t point out the real facts, bad facts become accepted as the truth.

8 thoughts on “Andy Rooney takes on gambling”

  1. His rant shows what a fool he has become, which disturbs me because I used to nod when I saw his commentaries in the past. There is so much wrong with what he said last night, I can’t even begin. You hit a few of them, but my big problem is that he’s asserting the “zero sum” game again, where gambling takes $$ away from other entertainment, which is not necessarily true, especially when it brings more tourism to an area. And his assertion that casinos “make” billions again confuses the “gross gaming win” with profits. This is why I hate this annual AGA report because they don’t explain this clearly enough, and the idiots in the media simply assume GGR is profits….

  2. >So there’s more emotion than reason in this outburst from Rooney.
    There is more concern from Rooney about ratings than rational thinking.

  3. This rant sounds like it was written 40 years ago, back when it would have made slightly more sense and resonated with slightly more people.

    What bugged me a lot (aside from the questionable figures) was that yet again Las Vegas was singled out as the target for ire. He easily could have said, “What’s better for America, a machinist in Detroit or a blackjack dealer in Detroit?” And is it really gamblers’ fault that the machinist is out of work but the dealer still has a job?

    The AGA’s numbers (he may have noticed) includes more than just Las Vegas–a lot more. Oh well. I shouldn’t get angry today. *sigh*

  4. I’m a little surprised you believe in the service-based economy thing, which, as far as I’ve been able to tell, seems to be spun by the corporate sector and some think tanks and politicans they’ve bought as to how to explain our survival once all our productive jobs have moved somewhere with the right mix of an ideal economic climate and lower standard of workers rights.

    The reason people complain about that kind of thing is “how a place makes money” is probably a prime concern in moving somewhere that has a future. A successful city needs to transplant money from other places, and will pretty much automatically spend money in other places well outside it’s backyard by default. I always thought in this city the path is pretty clear. It’s a little audacious on face value (people come out here on their own accord to give us their money), but it’s always seemed to work.

    Rooney doesn’t get that, of course. Just reading his text made me wonder if he doesn’t figure that the casinos just in Macao are already bringing back as much of China’s cash as they can carry.

    I guess I’m touchy about this because a friend of mine was an assistant to President Bush (the second) and one of the most hyper-partisan conservatives I’d ever seen, and she practically evangelized the service economy stuff, leaving me with unanswered questions as to how we can really all become service people fixing and operating each other’s things that were built elsewhere.

    Since it’s big manufacturing business moved to Malaysia (which is why we moved here,) my hometown’s biggest industry in terms of money made is it’s nursing homes, which I just can’t see as a sustainable economy that allows the town to grow. The money for taking care of local old people is usually local in nature and that means no money is coming into the city from other territories. But cash will continue going out of the city for everything from common consumer goods to contracted public works, and eventually there will be no money left, JMO.

    Las Vegas would face the same principle only if the out of towners stopped coming, or maybe if the Strip disappeared overnight and left us just with locals casinos. Those would be huge local casinos, but with the money we spend in moving food and other necessities in from areas where things are actually produced, we’d break down pretty quickly.

  5. Andy Rooney has been saying nutty stuff for decades now. I’ve disliked all his biases and his fake ‘common man approach’ since day one.

    Some people (like my stepdad) used to think Andy was always right on target with his style of Depression era, homespun, country-porch wisdom….saying things like “Did ya ever notice how ya can’t take a price sticker off of a picture frame without having a a buncha gooey adhesive left behind that’s impossible to remove?”. “Did ya ever notice how ya can’t get the lid off a jar of mustard without nearly dislocating your wrist and getting a hernia?”.

    That guys been (mentally) out to lunch for decades. He must have been BORN a cantankerous, constipated curmudgeon.

    One time he ragged on Kurt Cobain and made an insult about Kurt’s fans for feeling bad about his overdose. Andy ended up having to apologize.

    The guy is beyond ‘old school’. He’s a dinosaur and never hammered a steel ingot in his life. I wish Studs Terkel was still alive to debate Rooney on subjects like this. They were both from the same era, but Studs kept a modern mentality until his dying days and understood the concept of ‘working’ better than Rooney ever could (Re: Terkel’s 1974 book: ‘Working’).

    Terkel would be quick to properly explain to Rooney just how important and necessary EVERY American job is in the big scheme of things (from auto-worker to carnival popcorn vendor to a used-car salesman, Studs knew the importance of every American job).

    As far as economics go…isn’t all this ‘casino money’ recirculated back into the the population in one form or another?

    Rooney is loony.

    IMO

  6. What do people spend on liquor (something that generally is automated and not labor intensive)? Or any other kind of amusement and fun?

    And why should a dollar go into an autoworkers pocket (for creating a car) instead of my pocket (for creating/promoting memorable vacations)?

    I’m proud of the fact that 26% of my readers are from outside the U.S. I’m doing my part to help keep the trade deficit down.

  7. Pingback: East Coast Gambler - | Andy Rooney is Old. Not Nice. Not Funny. Not Beavis.

  8. I loved the Studs Terkel comment…right on. David, great to see you carrying the banner for so many of us in this city. Keep up the good work..

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