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.
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.