People who gamble often spend more in general

INDIANAPOLIS (AP) -- Families that spend significant money on gambling are likely to also spend more at restaurants or on alcohol and less inclined to save, a Purdue University economist said. Larry DeBoer, a professor who often studies state tax policy, told state lawmakers and others that it is unclear whether gambling causes some families to save less or whether it is simply one part of their propensity to spend more.

DeBoer spoke Monday (Nov 21, 2005) to state officials and organizations gathered in the Indiana House of Representatives chamber for a family impact seminar sponsored by Purdue. He used data from the federal Consumer Expenditure Survey, conducted by the U.S. Census, to try to answer questions that typically emerge during debates about gambling including:

- What would families be buying if they weren't spending money on gambling?

- Can the taxes generated by gambling be considered new revenue, or would they have been collected from other purchases if not spent on gambling?

DeBoer said neither question could be answered definitively using the federal data. But he said gambling tax revenue probably can be considered largely new money.

The data showed that families who lose at least $100 annually on gambling, which classified them as high-gaming households, were less likely to save and also tended to spend less on homes and education. Home purchases are not taxed, and mortgages result in tax breaks. Also, money spent on education is generally used as a tax deduction.

So DeBoer said households that are gambling are generating tax revenue that otherwise would not have been available. "You're taking money out of things that are not subject to taxes," he said.

But even that conclusion is somewhat tricky because it is not clear whether the presence of gambling options such as lotteries or casinos will cause such households to gamble more, he said. The census survey does not ask families specifically what yhey would buy if they did not spend money at casinos and racetracks or on lotteries. But DeBoer said the data could be interpreted to mean that gambling leads to other pending.

Information from: The Courier-Journal of Louisville, Ky., http://www.courier-journal.com