About those casino benefits…

Paul Davies January 21, 2013 3:00 pm

Lawmakers in a number of states are falling in love with casinos as a way to fund government operations. But the benefits often don’t add up.

Take Ohio where casinos have opened in Cleveland, Columbus and Toledo. A fourth casino is expected to open in Cincinnati in the spring. a percentage of the revenues are earmarked for education. (Lawmakers almost always link gambling money to popular causes like education, tax reform and senior citizens.)

But so far the revenue from the Ohio casinos is hardly making a dent in education. In fact, the first round of funding averaged $21 for each student in the state, according to this report. Given the millions of dollars in wealth that was stripped from the pockets of gamblers, not to mention the increased social and economic costs, and the increase in problem gambling, it appears the taxpayers are the real losers in the state’s misguided policy of using casinos to fund government operations.

Tags: casinos, Cleveland, Columbus, don't add up, education funding, Ohio, problem gamblers, social and economic costs, tax revenue, Toledo
Categories: General
Comment (1)

New York’s renewed casino push

Paul Davies December 18, 2012 9:47 am

Albany lawmakers are planning to resume their stealth push to legalize commercial casino in New York in the coming year.

There has been little discussion or debate surrounding casinos in New York and state lawmakers hope to keep it that way. It’s always better to ram through a major policy change with as little attention as possible. Especially a policy that about half of state residents oppose, polls show. Not to mention, a gambling policy that requires changing the state Constitution and will essentially create a regressive tax.

Call it a poor tax. Because that’s what casinos mainly are at the end of the day. Especially the convenience casinos like the ones Gov. Andrew Cuomo and Albany lawmakers want to add around New York. In other states, such convenience casinos attract mostly poor, elderly, minority and working class residents who tend to come gamble several times a week.

Changing the Constitution in New York requires two votes in Albany and then a referendum that goes before voters. The first vote in Albany sailed through in the dark of night earlier this year with little debate or discussion about the policy implications of such a major expansion of gambling. A second vote will likely take place in early 2013.

Cuomo is pushing casinos as a way to generate more tax revenue for New York. Coincidentally, he never even mentioned casinos when he campaigned for governor but became interested as casinos began spending millions on lobbying. Nor has the state completed an independent cost-benefit analysis that determines the added expense of creating more problem gamblers. They don’t want such a study, and instead will just tout the tax revenue and jobs that comes from casinos.

That’s because other research shows that casinos generate more crime, bankruptcy, divorce and suicide. Casinos also do not generate much new spending, but instead divert spending from other businesses. But the allure of the easy tax money prompts lawmakers to turn a blind eye to the destruction they will enable by allowing more casinos.

Tags: Albany, Andrew Cuomo, casinos, Constitution, New York, problem gamblers
Categories: General
Comment (1)

AC casinos back in business

Paul Davies November 5, 2012 9:37 am

Beach towns in New Jersey are still reeling from Hurricane Sandy and many are without power, but at least the Atlantic City casinos are open.

One casino opened within two hours of Gov. Christie’s announcement. Like clockwork, a 63-year-old Atlantic City woman arrived for what she described as her “daily visit” to the Golden Nugget. (Studies show those who live close to casinos are more likely to become addicted.) In fact, one of the hurricane victims was a gambler who refused to leave the shore. He was found dead in his flooded his house.

That should give some indication to how gambling can take control of some lives. Casinos know this and in fact depend on repeat and problem gamblers in order to survive. (One study found that more than half of a casino’s revenue came from problem gamblers.)

That shows that gambling is not about fun and entertainment for most customers. Instead, the casinos and states prey on vulnerable and desperate people.

That is the real shame of a public policy that puts gambling profits ahead of the people lawmakers are sworn to protect.

Tags: Atlantic City, casino, Gov. Christie, Hurricane Sandy, hurricane victim, open, problem gamblers
Categories: General
Comment (1)

Paris, Texas or Paris, France?

Paul Davies November 2, 2012 1:56 pm

If Philadelphia is going to get stuck with a second casino, The Inquirer’s superb architecture critic, Inga Saffron, is putting her money on developer Bart Blatstein’s costly and ambitious proposal to convert the iconic former newspaper headquarters into a French-themed casino, hotel and retail complex.

But as Saffron smartly points out, there is no guarantee the final product will look more like something from Paris, Texas than Paris, France.

To be sure, Blatstein’s proposal seems more compelling on paper than the usual windowless slots barns that cater mostly to repeat and problem gamblers. But as Saffron warns, lawmakers better be sure to get a commitment in writing from Blatstein to actually build what he is proposing and not just plug in thousands of slot machines at the site. That’s because there is a track record with other casino developers promising elaborate tourist destinations only to build a convenience casinos that attracts mostly locals. (Exhibit A: Philadelphia’s other dumpy and depressing casino known as SugarHouse.)

Of course, a better course of action would be for Philadelphia to oppose a second casino until a real independent cost-benefit analysis is done to see if more gambling would help the city. You won’t see such a study because the answer is casinos are net losers once all of the costs are calculated. In fact, it is hard to argue the casino will generate much new spending since the bulk of gamblers it will attract live in the area. As such, all the casino will do is shift spending from other businesses.

Though for a price, casino supporters may gin up a study that boasts about the jobs and tax revenue that will be generated. Those numbers may even be somewhat accurate, but most independent studies (see here) show casinos also result in increases in crime, bankruptcy, divorce and suicide as well as other economic and social ills that cost all taxpayers. As a candidate, Mayor Nutter opposed casinos but is now in full support. He would be better served to go back and think about why he was against casinos before he was for them.

Blatstein may be serious about wanting to build a diverse entertainment complex, but the lynchpin to his project is a casino. Without gambling, the rest of Blatstein’s $700 million project isn’t viable. That should indicate where the real emphasis will ultimately end up.

But the problem is this: gamblers have lots of options today and do not have to travel far to get some action. As such, most casinos do not draw tourists from outside the region, a la Las Vegas.

Instead, the new casinos depend on locals. Most of the gamblers going to a casino on North Broad Street are going to be poor, elderly and working-class residents looking to get lucky. If anything, Blatstein’s casino will draw gamblers away from the SugarHouse, which will not translate into much new tax revenue or spending for the city. (Disclosure: I used to work at The Inquirer, so it is especially painful to think of old ladies and problem gamblers flocking to the former newspaper site several times a week to gamble away their Social Security and pay checks.)

As Blatstein admits, he doesn’t gamble and most of the people he knows don’t gamble. But even if he does build a mixed use complex, it doesn’t mean wealthier and more educated nongamblers will suddenly start throwing their money away. The new Revel casino in Atlantic City tried to go after the same high end market. But just a few months after opening this spring, the Revel – which received millions of dollars in taxpayer help to get built – is struggling to avoid bankruptcy.

Instead, Blatstein’s casino would be located on the Broad Street bus and subway lines, and very close to several schools and churches. No matter how fancy the slots joint is, the bulk of his gamblers will come from the row houses in North, South and West Philadelphia. Residents in the surrounding suburbs already have closer and more convenient casino options.

In fact, the gamblers visit the surrounding suburban casinos an average of three to five times a week. That doesn’t leave much time to go to Blatstein’s casino in the city.

Tags: Bart Blatstein, casino, Inquirer, Mayor Nutter, Philadelphia, problem gamblers, SugarHouse
Categories: General
Comments (0)

Australia: the gambling future

Paul Davies June 20, 2012 9:37 am

As gambling spreads across the United States and more and more states rush to open casinos, Australia offers a peek into the future.

In Australia, gambling is rampant. More than two thirds of the country gambles. Nearly 1 in 6 who play slot machines has a serious addiction, according to the Australian government.

The rise in problem gambling has prompted the Australian government to take steps to try to curb the issue. At the same time, the government is to blame for the spread of gambling. Australia is home to 200,000 slot machines, the most of any country in the world. That equals about one slot machine for every 100 people in the country.

The number of gambling outlets has spread because local governments crave the tax revenue from gambling, and have overlooked or ignored the problems that come with gambling. As Sydney Morning Herald columnist Bruce Guthrie details, the government in Australia has become addicted to gambling. “Governments have now become avid participants in the growth of the gambling industry,” he writes while arguing that efforts to confront problem gambling are not likely to have much success.

Consider some statistics provided by the government of Australia:

Roughly 70 percent of the country gambles. Australians spent $19 billion on gambling in 2008-09. Of that, $12 billion was spent on slot machines, which Australians call ‘pokies.’ Keep in mind that the population of Australia is only 22 million.

The social cost to the community from problem gambling is almost $5 billion a year. The actions of problem gamblers impact between five and 10 others, including family, friends and employers. That translates into roughly 5 million Australians negatively impacted by problem gambling, or almost 20 percent of the country.

One in six people who play the slots, or pokies, regularly has a serious addiction. Problem gamblers lose around $21,000 each year, about one third of the average Australian salary. Overall, Australians lose more money gambling per capita than in any other country.

Some of the new high-tech poker machines are fast-paced and intense, and can result in a gambler losing more than $1,500 in an hour. The most frequent poker machine gamblers are young people between the age of 18 and 24. Many adult problem gamblers say their gambling problems began when they were teens.

Here is one sad but safe bet: As more casinos open in the U.S. and other forms of gambling are promoted, many of the same problems confronting a large segment of the Australian population are likely to take root here.

Tags: addicted, Australia, casino, government, pokies, problem gamblers, United States
Categories: General
Comments (0)

Whitney Houston’s daughter shines light on underage gambling

Paul Davies May 22, 2012 11:42 am

The daughter of the late signer Whitney Houston was caught on tape gambling at the MGM Resort and Casino in Las Vegas over the weekend. One Problem: Houston’s daughter, Bobbi Kristina Brown, is only 19 years old. Casino gamblers must be 21.

MGM is launching an investigation. Don’t expect much to come from that. Casinos do a lousy job of policing underage gamblers, and instead just view any fines as a cost of doing business. A Pittsburgh casino was fined $150,000 for repeated violations, involving underag gamblers. Other Pennsylvania casinos have been fined as well. An Atlantic City casino was fined for allowing a 14-year-old boy to gamble.

These may seem like isolated incidents but the number of underage kids who gamble is a serious and growing problem. As more states legalize casinos and push on line One study found one out of every five young people has a serious gambling-related problem, up from one out of every ten in 1988. The study was completed by Durand F. Jacobs, a clinical professor of medicine at Loma Linda University Medical School in California, and can be found here.

Other more recent studies have found similar problems among teen gamblers, especially males, including one here by Johns Hopkins University. Gambling is also a problem on college campuses. A study of college students in Florida found 66 percent of students said they gambled at least once in the past year. Another study found the percentage of college study with gambling problems was double the national average.

The problem is likely to grow as more states and the federal government look get into online gambling. One study found this could have the most dramatic effect on Internet-savvy underage gamblers. “The potential for future problems among youth is high, especially among a generation of young people who have grown up with videogames, computers, and the Internet,” the study found.

Tags: Bobbi Kristina Brown, casino, college, MGM, problem gamblers, slots, underage gambling, Whitney Houston, youth
Categories: General
Comments (0)

Casinos: elderly day care

Paul Davies May 8, 2012 11:06 am

Casino operators like to talk up the fun and entertainment they provide, while downplaying the dirty secret of what is going on inside many casinos across the country. But columnist Phil Reisman puts a human face on elderly problems gamblers who are fueling the growth of casinos across the country.

Reisman’s compelling column details the financial ruin of an 84-year-old widow who became hooked on playing slots and then taken advantage of by others. Helen’s story is just one of many that play out without much attention. But the reality is Helen is part of bread and butter slots players that generate a large chunk of a casino’s profits.

Atlantic City is well known for busing in elderly gamblers to play slots. But as more and more convenience casinos pop up across the county, gambling has become easily accessible to many other graying gamblers. Studies show elderly women especially are vulnerable to problem gambling. (One senior citizen warned against getting hooked on slots, while this piece says casinos have become day care

A University of Pennsylvania study found 1 in 10 people over the age of 65 are at risk of financial problems from gambling. The study was completed in 2005, before the recent surge in new casinos that have opened which will likely exacerbate the problem. Ohio is gearing up for an increase in elderly problem gamblers as casinos open up there.

The same problems will play out in other states like Massachusetts, where casinos are are expected to open soon. New York, Florida and other states should examine this growing problem before moving forward with plans to add more casinos. If not, lawmakers will be responsible for creating many more problem gamblers like Helen.

Tags: casino, elderly, Helen, New York, Phil Reisman, problem gamblers, slots
Categories: General
Comments (0)

Latest gimmick: privatize state lotteries

Paul Davies April 30, 2012 11:26 am

As states continue to search for ways to fill budget holes, the latest gimmick is to privatize the lottery.

Illinois became the first state to privatize the lottery. New Jersey, Pennsylvania, Ohio, Washington and other states are all considering proposals to privatize the lottery. The push for short-term revenue gains comes with obvious risks that include opening states up to corruption and creating more problem gamblers.

State lotteries are giant cash machines. Private operators are salivating at the prospect of gaining control to those cash cows. If history is any guide, the backroom jockeying by the private companies must be watched closely. The winning bidders will likely be connected friends and big campaign givers to the governor or other powerful pols. (Those odds are much better than the odds of hitting the Power Ball.)

But even more problematic is the likely result of the sharp rise in problem gamblers that will come with private operators. Here’s why: a private operators will have an incentive to sell as many tickets as possible because that will probably be part of their compensation. As such, the private operator will be more efficient and aggressive when it comes to selling tickets. There will likely be an increase in places where tickets are sold. There will likely be an increase in lottery games to be played. And there will likely be more expensive lottery tickets sold. For example, Texas offers a $50 lottery ticket.

The result will be more people spending more money on lottery tickets. More people getting addicted to lottery tickets. And more people spending a larger percentage of their income on lottery tickets. Studies show that the most vulnerable residents spend a higher percentage of their income playing the lottery. Expanding the lottery through private operators may provide a short-term increase in revenue but will likely lead to more problems down the road.

Tags: budget, Illinois, lottery, New Jersey, Ohio, Pennsylvania, privatize, problem gamblers, risk, state
Categories: General
Comments (0)