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'One-Armed Bandits' To Save Horse-Racing Industry?

By Carlos Romero Barcelo of Caribbean Business

July 7, 2005
Copyright © 2005 CARIBBEAN BUSINESS. All Rights Reserved.

If anyone were to suggest we legalize prostitution to prevent women from being raped, everyone would jump at their throats. We would hear the Catholic Church and all other Christian organizations criticizing, ridiculing, and opposing such a suggestion. We would have civic and professional organizations opposing such a move and speaking vigorously against it. How could the government even think about becoming partners to the monetary exploitation of women, by legalizing and licensing the business of prostituting young women and enticing teenage girls into selling their bodies?

It is a good thing we still can expect such a reaction of outrage, if anyone were to make such a proposal. Why is it, however, no one seems outraged by the proposal of a corporation that claims that in order to save the horse-racing industry, the government must allow slot machines at the racetrack?

How can slot machines save horse racing from going under? Only by enticing people, who gamble and are likely to become addicted, to spend more money on gambling, for the profit of individuals who already have milked the horse-racing industry dry. All the extra money the horse-racing enthusiasts will spend in slot machines is money that very often is taken away from their families, their spouses, their children, and other dependents.

Why does our society turn its head the other way and allow slot machines (better known as "one-armed bandits") to be made more and more accessible to people, so more and more families in Puerto Rico may be impoverished and ruined economically?–not only allowing them, but also encouraging the installation of more "one-armed bandits" to increase the number of gambling addicts in Puerto Rico. Then, the legislators who support the "one-armed bandits" become accomplices of the slot-machine manufacturers and distributors that also are investors in the corporation–which alleges only the "one-armed bandits" at the racetrack will save the industry, hypocritically propose that all or part of the profits the government will share as partners with the "one-armed bandits" should go to education. Who can argue against the use of funds for education?

How cynical can you get? Such a proposal is tantamount to proposing the government share in the licensing of legalized prostitution to establish programs to educate young orphan girls.

Has anyone in the Legislature really made a conscientious study of the reasons for the economic and financial difficulties in the horse-racing industry? The answer is no!

Early this year, I sent a letter to all our New Progressive Party legislators in which I briefly spelled out the dangers to our society of expanding the installation of "one-armed bandits" by allowing them at the racetrack and in the racetrack-betting parlors throughout the island. Together with the letter, I sent them a copy of a newspaper article that explained the results of a psychological and sociological study comparing horserace betting and slot-machine playing. The results showed the average time it took a person to get hooked on slot machines was about one-tenth the time it took a horse-racing gambler to become addicted to betting.

The financial and economic disaster brought upon a gambling addict’s personal life and his family’s life is as bad as or worse than the effects upon a drug addict’s life and on the addict’s family.

A gambling addict will steal from his employer, from his friend, and even his own family, just like the drug addict. Yet, because he acts normal and isn’t seen to be under the influence of drugs, he or she can fool their employer, their friends, and their family for a much longer time. When a gambling addict’s family becomes aware he or she is an addict, everyone around him or her will have been victimized much more.

To make it worse, there are few, if any, places available in most communities for the rehabilitation of gambling addicts. Their addiction as a very serious psychological problem is less readily accepted by the victim or by friends and family. Is that the type of problems and social ills to which the government should become a partner in stimulating, facilitating, encouraging, and justifying, just to profit from it? That is certainly not my idea of what government’s role is and should be.

Yet, why is the horse-racing industry in a financial and economic situation? There are many reasons, but most of them can be pointed out to be the fault of the present racetrack owners and the lack of government supervision and enforcement.

The golden era of the horse-racing industry was in the days of the original El Comandante racetrack in Carolina. In those days, the pool betting (betting on horses in six of the seven races) often fluctuated around $1 million on Sundays and holidays. The parimutuel betting and the daily double reached their highest peaks during that era. Attendance at the racetrack was at its highest, both in the most expensive section and the grandstand.

Today, the most expensive section is half-empty on most racing days and the grandstand is completely empty. Why is this? Obviously, the transmission of races on television reduces the number of people who go to the racetrack. Years ago, the betting parlors only could accept bets in the pool system and in the daily double (betting on the fifth and sixth races). Parimutuel betting (betting on each race separately) only could be done at the racetrack. Later on, all betting was allowed at the betting parlors. If a racing fan could sit near his or her home in Yauco with his or her friends, watch the races on television, and bet on every single race separately with all the betting options available at the racetrack, why should he or she travel back and forth from Yauco (four hours minimum travel time)?

Not satisfied with all the encouragement for fans not to go to the racetrack, they also decided to increase the number of racing days and the number of races per racing day from seven to eight. They also increased the number of races for native horses, without a corresponding increase in the number of native horses available to run in additional races. Thus, we began having too many races where only four or five horses competed. At times, only three horses have been available. Of course, with fewer horses in a race, the less interest and the less betting there will be.

Together with all these changes, which reduced the interest of horse-racing fans in going to the racetrack, the racetrack owners stopped making the payments that they are required by law to pay to the government. A percentage of all bets on every race and on every racing day belongs to the government. That percentage doesn’t belong to the racetrack owners and should be paid every day at the end of the races. The government, however, didn’t enforce the collection, as it does with music concerts and other spectacles at the Coliseum, and allowed the debt to accumulate into the millions. No one has suggested an investigation as to why the Treasury secretary didn’t collect the taxes owned to the government by attaching the betting revenue. It definitely should be investigated.

The short-term interests of the betting-parlor owners, short-term interests of the horse owners and breeders, and the short-term interests of the racetrack owners or would-be owners aren’t necessarily the same as the best long-term interests of the horse-racing industry. The licensing of "one-armed bandits" definitely isn’t in the best interests of our community and the people of Puerto Rico as a whole, nor is it in the best long-term interests of the horse-racing industry.

Let us not allow the greed and short-term financial interests of a few dominate our decisions. The horse-racing industry is worth saving on its own merits, but not as an excuse for "one-armed bandit" manufacturers and their partners to make money out of ruining Puerto Rican families financially and emotionally.

Carlos Romero Barceló is a two-term former governor of Puerto Rico (1977-84), a two-term former resident commissioner (1993-2000), and a two-term former mayor of San Juan (1969-78). He was president of the New Progressive Party for 11 years.

This Caribbean Business article appears courtesy of Casiano Communications.
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