Tales of the McCabe: Tar Heel Legislators Offer Conservatives a Tax Cut for More Licensed Gambling

Robert De Niro in "Casino." Credit: Universal Pictures.

Before the end of August, the Republican-controlled North Carolina legislature and Democratic Gov. Roy Cooper appear to be looking to wear down conservative opposition to expanded gambling in the state and get it on the books.

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Gambling interests are pitching North Carolina conservatives a deal: “Give us more gambling, and we will cut your taxes.”

They are really offering small potatoes, compared to how more gambling affects the state’s most vulnerable.

The draft legislation would permit wagering in locations chosen explicitly by lobbyists who wrote the bill in the back rooms of Raleigh. Specifically, there will be four “entertainment districts,” which would include hotels, dining, and housing. These districts would be located in Nash, Anson, and Rockingham counties and territory that is part of the Lumbee tribal lands.

The lobbyists have paid off the legislators, so they must figure the conservatives defending families and vulnerable individuals from more intrusive gambling will roll over if they get their payoff.

Here’s their deal: with the projected $1 billion in revenue from new casinos and video gaming machines and another $400 million from so-called iGaming, online gambling licensed by the state, the flat income tax goes from 4.75 percent to 3 percent.

Of course, the individual tax rate is scheduled to go to 4 percent by 2027 anyway.

Now, put the generosity of the gambling coalition in the context of the actual budget. In math-easy terms, the state spends $30 billion annually, and in 2023 revenues have jumped to $34 billion.

Take a moment to let that sink in. Right now, the legislators could cut taxes by $4 billion and still balance the budget—so why are they so desperate to gin up another $1.4 billion?

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Seriously, $1.4 billion is a rounding error.

Much is made of conservatives standing in the way of more gambling in North Carolina and how they have no appreciation of a tax cut, which is not really a cut at all because all that changes is the source of the revenue—the money is still pulled from the economy.

The truth is conservatives are opposed to more gambling for the same reason people have always opposed gambling. It is a vicious destroyer of lives and, by extension, families.

Some states have enacted responsible gambling, recognizing the entertainment value and the rights of adults to conduct their own affairs, by engaging in years of thoughtful debate and implementing strict safety measures—this is not that.

All that money that pours into casinos, video gaming machines, and iGaming websites comes from people expecting a fantastic payoff. It begins as entertainment, and sadly for millions of Americans, it becomes an expensive addiction.

Profiting off addicts is never a conservative value.

A coalition of conservative and faith leaders signed a letter pleading with the lawmakers in Raleigh to consider the costs to the people on the losing side of all those bets. It was signed by

Chad Connelly, founder and CEO of Faith Wins; Pastor Tim Cruse, North Carolina director of Awake America; Kimberly Fletcher, founder and president of Moms for America; David H. Safavian, CPAC senior vice president and general counsel and Terry Schilling, executive director of American Principles Project.

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Here is a key excerpt:

We are strongly against haphazardly promoting new streams of revenue that could adversely affect North Carolina voters, especially those in poorer communities where these casinos and video lottery terminals are being proposed without the proper risk assessment.

Finally, we object to the lobbyists holding tax cuts hostage to gambling expansion. Conservatives understand that we can cut taxes without raising revenue elsewhere. Give the people back their money, allow them to spend it, and watch your economy grow.

There is no way now to calculate what it will cost to repair the damage expanded gambling will inflict on the people who rely on the legislators to protect them.

Sure, people sing the praises of how gambling gooses the economy and the government coffers—no one has ever dared to describe the impact on the children of gambling addicts.

Everyone, you, me, and every legislator—and every lobbyist—know the new billions are coming off the kitchen tables of the most vulnerable amongst us. And for what?

Do the math. They are forecasting a bump in revenues less than the state’s surplus—and a tax cut, they could do today and still balance the budget.

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