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Cities and towns entering the gambling market now find a radically dissimilar situation from that of 1930s Las Vegas, opponents of legalized gambling argue. Instead of having a monopoly on gambling, these communities become just one more place in an increasingly crowded gambling market. Instead of attracting people from out-of-state, as Las Vegas does, the people pouring money into their slot machines are primarily local residents. The gambling industry refers to these gamblers as convenience gamblers and day trippers, who typically come from within an 80-km (50-mi) radius of the casino. Instead of bringing new dollars to the local economy, convenience casinos siphon large amounts of consumer spending away from other local businesses such as restaurants and motion-picture theaters.

A number of studies conducted in Illinois since 1992—including those by the Illinois Economic and Fiscal Commission, a state government research group; the Chicago Better Government Association, a privately funded research organization; and Professor Earl Grinols, an economist at the University of Illinois at Champaign—have thrown doubt on the benefits of legalized gambling. These studies indicated that although the riverboats in that state have vastly increased gambling revenues to the casino owners and the state, most of the gambling was being done by local residents and there has been little or no benefit to other businesses. Quite, the studies found that many businesses have reported losses.

Leading casino operators, such as Steve Wynn, chief executive officer (CEO) of Mirage casinos in Las Vegas, and Donald Trump, the U.S. real estate developer and owner of several Atlantic City casinos, have recognized how gambling affects other businesses. There is no reason on earth for any of you to expect for more than one second, Wynn told a Bridgeport, Connecticut, audience of local business owners in 1992, that just because there are people here [in his proposed casino], they're going to run into your store, or restaurant, or bar. When a host of casinos were proposed for Florida several years ago, Trump told the Miami Herald,People will spend a tremendous amount of money at the casinos ... Money that they would normally spend on buying a refrigerator or a new car.

Gambling's critics say that lotteries, too, have their negative aspect. Although lottery revenues have brought some relief to financially strapped education programs, these funds are often used simply to replace, rather than supplement, existing public funds for education. In 1991 Bill Honig, California's public school superintendent, complained that lottery revenues earmarked for education made it difficult to raise additional education funds from the public. The public is more reluctant to pass education bond issues because they think we're floating in lottery money, Honig said. Tying education budgets to lotteries also created an erratic source of money. In one three-year period in California, between 1988 and 1991, lottery revenues declined from about $1 billion to $500 million.

Educators also criticize that while public officials tout the benefits to a state's education program of playing the lottery, the actual amount of lottery funds educators receive is quite modest. The Idaho and Montana state lotteries, for example, have promoted the lotteries as important sources of education funds, but according to critics, officials have failed to note how small a percentage of the total education budgets the lotteries provided.

We'll get only $7 million to $8 million from the lottery this year, said Montana Education Association research director Tom Bilodeau in 1993, which is no more than 1 percent of the total $800-million budget for K through 12 education in the state. Yet the way it's portrayed as such an important benefit to education undermines our ability to convince local voters of the need for additional levies or state legislators of the need for more funds.

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