Cuomo scales back casino plan

January 18, 2013 11:03 am

Last year, Gov. Andrew Cuomo argued that New York should legalize casinos to help create jobs, adding the state is already in the gambling business so why not go all in. His initial proposal called for seven casinos scattered around the state, including New York City. (Recall Cuomo’s plan for a $4 billion convention center in Queens that was going to be built by the major casino operator Genting.)

A year later Cuomo has changed his plan and is now calling for just three casinos located upstate and no casinos in New York City. His new argument is the casinos will lure gamblers from the city and boost tourism. “I believe casinos in upstate New York could be a great magnet to bring the New York City traffic up,” Cuomo said.

Of course, Cuomo’s assertion, just like his initial proposal, offers no supporting evidence to back his claim. Then again casino supporters are famous for making wild promises about the benefits of gambling. The promises are often based on little or no data.

The fact is, outside of Las Vegas, casinos are not major tourist magnates. Is anyone really going to load the kids into the minivan and head to upstate New York for a week to visit the new casino there?

Yes, casinos attract gamblers. But most visitors gamble and then go home. In fact, the casinos do a great job of keeping the gamblers on site, eating, drinking and shopping at the casino. Just ask Atlantic City, where a number of restaurants closed because most gamblers eat at the casinos.

Casinos have also failed to deliver on the economic development promises in other cities. (See this study about the impact of casino in New Orleans and Mississippis, where the casinos hurt existing businesses.) Other studies have found most gamblers come from a 50 mile radius and rarely spend the night, let alone spend any time at other businesses in town. In Illinois, the Chicago Better Government Association conducted a survey of the impact of casinos there are found that: “Out of 785 players interviewed, only one out-of-state visitor, that traveled over 100 miles, reported making a purchase in town. Only 3% of all out-of-state players spent money outside the casino.

“The largest percentage share of gamblers are locals. ‘There is no doubt that Illinois draws their largest share of patrons from their own communities and other nearby communities.’’ Over five-sixths (83%) of the amount of money gambled is not new money brought into the local area. It is money that is already in the community,” the survey found.

If anything, the spread of gambling in recent years has only decreased the need for people to travel far to gamble when there are so many options closer to home. At the end of the day, the upstate casino will be little more than a local convenience casinos that depends mainly on area residents. At least one upstate newspaper in New York is opposed to using gambling as an economic development tool.

More broadly, it is unclear why Cuomo scaled back his casino plan since all of the discussions are held behind closed doors. Is it the lack of public support for so many casinos? If so, is the new plan, which Cuomo called Phase I, just a sneaky way to gain support for changing the state Constitution and then add more casinos later. Either way, Cuomo has yet to produce any evidence to support his ever evolving casino policy.

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One thought on “Cuomo scales back casino plan

  1. I think it’s better that way that he change his plan to call for just three casino. Maybe because he noticed the consequences when opening around seven casino on the state. By the way the article was great, Thanks Paul!

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