AC casinos closed

October 29, 2012 10:48 am

This is perhaps the best indication yet that New Jersey officials are worried about the impact of Hurricane Sandy: Gov. Christie ordered the casinos in Atlantic City closed.

This is not to make light of the seriousness of the storm. But state officials are often reluctant to close the casinos for just about anything. Often after big storms, one of the first businesses to re-open are the casinos.

The focus on keeping the casinos open underscores the misplaced priorities of many government officials who do whatever it takes to keep the gambling revenue flowing into state coffers. Forcing casinos to close and kicking out gamblers also underscores the addictive nature of gambling. Fortunately, this time around, Gov. Christie had enough sense to put safety before casino profits.

Greenbrier goes down market

October 26, 2012 11:55 am

The Greenbrier, an upscale resort that has hosted presidents and other major figures, has transformed itself into a convenience casino. The move begs the question: What’s next, a casino at the Waldorf Astoria in Manhattan? How about slots at the Beverly Hills Hilton?

Down market, up market. When it comes to gambling, no place appears to be off limits. The Greenbrier used to be an exclusive enclave that attracted tourists from all over the country to golf, hunt, hike and relax and billed itself as America’s Resort. But the resort has struggled in recent years and has now turned to the desperate casino play.

Bus companies are bringing scores of day trippers to the Greenbrier mainly to gamble. The casino opened two years ago and was billed as an upscale attraction. But it has morphed into an Atlantic City-like attraction that buses in locals to gamble. The West Virginia Lottery Commission ordered the Greenbrier to stop busing in gamblers, but apparently that hasn’t happened.

The Greenbrier casino underscores the broader shift across the country to turn to gambling as an answer to every economic problem. More and more states are turning to gambling as way to solve budget woes. Many struggling towns and businesses are eager to use slots to lure in customers. The upshot is a country that is quickly becoming hooked on gambling at every turn.

Maryland residents split over casinos

October 25, 2012 11:41 am

Give Maryland lawmakers this, at least taxpayers will get to decide if the state needs more casinos. And by accounts, the vote on Election Day will be close.

Maryland residents are sharply divided over the benefits and drawbacks of more gambling in the state. Sure, the casino will create jobs and more tax revenue. But the casino also diverts money that would have been spent at other businesses; strips wealth from the pockets of taxpayers; creates more repeat and problem gamblers; and leads to increase in crime, bankruptcy, divorce and suicide.

Anyone who takes the time to study the issue will understand the negative effects of casinos outweigh the benefits. Sadly, much of the public is not well informed about the issue. That’s due in part to thinly reported stories like this one in The Baltimore Sun that only scratch the surface of the issue and fail to dig into the deeper social and economic costs that come with casinos. At the same time, it is tough to overcome the misleading ad campaigns by casino supporters.

Despite the lack of information and misinformation, polls indicate voters may still defeat the referendum that would allow another casino and table games at the existing slots parlors. But if the public fully understood all the issues surrounding casinos, voters would overwhelmingly reject the measure.

New York’s convenience casino

October 24, 2012 11:52 am

A sterile slots parlor at a racetrack in Queens, N.Y. has become the most lucrative convenience casino in the country, and is upending the gambling landscape in the Northeast.

The Resorts World Casino in New York has raked in nearly $630 million in revenue over the last 12 months just from slot machines. That figure tops the slots take at any of the casinos at destination resorts in Atlantic City or at Foxwoods or Mohegan Sun in Connecticut. The average income from an electronic slot machine in Queens is more than $370 a day, compared with $169 for slots on the Strip in Las Vegas, The New York Times reports.

Unlike many of the opulent casinos in Atlantic City, Connecticut or Las Vegas, the slots joint in Queens offers no fancy amenities, such as high-end restaurants, big-name entertainment or an upscale hotel. Its only competitive advantage is its location in densely populated New York City. The short subway ride or drive for New York gamblers beats schlepping to Atlantic City or Connecticut for gambling action.

“Convenience and location are the driving factors today,” William R. Eadington, director of the University of Nevada’s Institute for the Study of Gambling and Commercial Gaming, told The Times. “If you put a casino in a high-density population like Queens, you’ll do well.”

Competition from convenience casinos in Queens and Philadelphia is killing Atlantic City, where gambling revenues have dropped 36 percent, from a high of $5.2 billion in 2006 to $3.3 billion last year. Revenues are also down at Connecticut casinos. Last month, Mohegan Sun, the world’s largest casino, announced it would lay off 328 workers, blaming the Queens casino and a weak economy, according to The Times.

The success of the Queens casino undercuts the argument that the slots parlors attract tourists from outside the area. The Queens casino is supported mainly by repeat and problem gamblers. Many of those gamblers used to travel to Atlantic City or Connecticut once in a while, but now go to Queens several times a week.

So instead of attracting tourists, all the convenience casinos do is make it easier for local New Yorkers to gamble more often. At the same time, the casino is attracting customers who live in the area who never gambled before, but do now because the proximity of the casino. The upshot is likely an increase in problem gamblers. Studies also show an increase in crime, divorce, bankruptcy and suicide within a 50-mile radius of where casinos open.

As such, the Queens casino offers a taste of what is to come if New York goes forward with plans to legalize commerical casinos across the state. Instead of attracting new revenue to the state, the casinos will suck revenue from the pockets of residents by making it easier for them to gamble.

Macau: 36 casinos, one hospital

October 23, 2012 10:05 am

States and cities that bet on casinos to boost the local economy should take a look at Macau.

The Chinese enclave is about the third of the size of Manhattan and generates more gambling revenue than Las Vegas. The gambling boom has transformed the city in many ways: the streets are clogged with buses transporting gamblers to casinos. Housing prices have doubled along with food prices. Crime is up. Gangs do business inside the casinos, as do prostitutes. While there are 36 casinos, there is only one public hospital, and it is a dump, reports Reuters.

Macau, just like Atlantic City, has failed to improve the quality of life for most residents. Yet, the casino operators are raking in billions of dollars. Other cities and states in the U.S. that have bet on casinos are also hard-pressed to show how gambling has been a good economic or social policy. Yes, the casinos create jobs and generate tax revenue, but schools, poverty rates, tax rates and other key measures have not improved.

The only real output is that many residents are a lot poorer after wasting their time and money inside the casinos.

 

Davenport goes all in on casino

October 22, 2012 6:39 am

Psst, buddy. Forget about the Brooklyn Bridge, want to buy a casino in Iowa?

Governments have long been partners in the casino rackets. But in Davenport, Iowa, city officials are getting to ready to go all in and buy the Rhythm City casino outright for $46 million. Here’s the best part, the city has spun the deal to make it sound like it will not cost taxpayers anything. One story claimed the casino lowered the city’s risk.

Memo to Davenport taxpayers: watch your wallets.

Let’s start with the obvious, the $46 million purchase price has to come from somewhere. So to claim the casino is not going to cost taxpayers anything is bogus. It appears the city plans to float bonds to pay for the casino and use the winnings to finance the debt payments over 20 years. In other words, the casino purchase is going on the taxpayers’ credit card. 

The bond payments are expected to be $3.5 million a year and the casino supposedly made $10.48 million in fiscal 2012 – before interest, taxes, depreciation and amortization. In order for the financing to work, the casino must clear at least $3.5 million a year. (Recall the old adage about if a deal sounds too good to be true.)

More to the point, there is no guarantee the casino will be profitable for 20 years. Gambling markets are becoming saturated as more states legalize casinos. If states or the federal government legalizes online gambling, many bricks and mortar casinos may suffer. Even if the Rhythm City casino is so profitable why are no private operators lining up to buy it? Not to mention, governments are not too efficient when it comes to running things.

But even if the casino does make enough to cover the bond payments for the next 20 years, all of the revenue will still come from taxpayers in the form of losing bets. In effect, that is a tax. In fact, studies show gambling is one of the most regressive taxes. That means the poorest residents in Davenport will largely fund the casino.

More broadly, what is the government doing in any private business, let alone the casino business? Studies show casinos lead to increases in crime, bankruptcy, divorce and suicide – all costs to taxpayers. Many convenience casinos like Rhythm City depend on local repeat and problem gamblers in order to survive. There are certainly no tourists jetting in to Davenport.

At a minimum, generating revenue from the losing bets of taxpayers sucks money out of the economy that would have been spent elsewhere in the local economy, such as a restaurants, movies and the mall. Floating bonds to pay for the casino creates other lost opportunity costs. Since casinos don’t produce anything but mainly gambling losers, it is hard for the city to argue this is about economic development.

To argue the casino is not going to cost taxpayers anything is pure folly. Any taxpayer who wants to bet otherwise, I have a bridge to sell you in Brooklyn and a casino in Davenport.

A gambler’s tale

October 19, 2012 11:44 am

When state lawmakers talk about casinos, they often highlight the jobs, tax dollars and benefits of building a “world-class” tourist resort, which are usually nothing more than local slots barns. Lawmakers argue that gambling is all about fun and entertainment, but this first-person account offers some insight into what is really like inside a casino and who the customers are that keep the casinos humming along.

“In gambling narratives, the bottom is followed by the fantasy and the fantasy is followed by the bottom. The high is always the pain and the pain is always the high,” Jay Kang writes in this personal essay from 2010.

This vivid portrait is worth reading and remembering as lawmakers in state after state tout casinos as an answer to the budget and job woes. Keep in mind who casinos cater to and where the money comes from. Kang’s essay shines a light on the lives that are impacted, and often destroyed, by casinos and the elected officials who enable gambling. 

“I could tell you that during a 36-hour period in July of 2006, I lost $18,000 in Las Vegas,” Kang wrote. “Or I could tell you I once picked through every corner of my car, including the grating underneath the spare tire, for five dollars of spare change so that I could make the minimum bet at a blackjack table (a bet I lost). And my interest in divulging these details would not be to instruct or to edify, or even to elicit empathy from fellow addicts. My interest would be to rip open my suffering heart and show you its beautiful beating, and in this way, I might think of myself as having been more alive than you, my hopefully horrified reader, were at a similar age and time.”

Mississippi looks to double down

October 17, 2012 11:59 am

Mississippi lawmakers bet big on “riverboat” casinos years ago as way to fund government operations. But getting residents to gamble away their hard-earned money has not solved the state’s budget woes or improved education.

Now some lawmakers want to double down on gambling by legalizing a lottery in Mississippi. That would be a bad bet. Studies show the poor and working class bet a much larger percentage of their income on lottery tickets. Essentially lotteries prey on the most vulnerable, making such games of chance one of the more regressive taxes around.

Sure, there are winners. But the line of losers is much longer and gets no attention. Lotteries do not create jobs or economic spin off, and mostly strip wealth from residents. If anything, the lottery takes money out of the economy leaving gamblers with less disposable income.

Some argue there is nothing wrong with any occasional $1 bet on a lottery ticket. That may be true, but the large majority of lottery players make multiple bets every day. Many states even often day and evening lottery drawings so gamblers can get twice as much “action” daily.

More gambling in Mississippi is especially acute since it is one of the poorer states in the country. The casinos are already a major source of wealth stripping. Adding lotteries to the mix will only add to the state’s economic woes over the long term.

Baltimore casino will take from the poor

October 16, 2012 3:29 pm

Sometimes it seems like readers are more informed and insightful on the real issues surrounding casinos than the lawmakers or even the media.

Consider a recent letter to the editor that appeared in the Baltimore Sun. The reader is responding to an op-ed – a poorly argued propaganda piece, really - by the mayor of Baltimore touting the benefits of a casino in the city.

The reader points out that the state may generate more tax revenue, but the money will come mainly from poor residents in Baltimore. More to the point, the reader rightly argues the casino will do little to improve education in the city, as the mayor argues, let alone boost other basic services designed to help the less fortunate. As the reader points out: “Building a casino to curb poverty is like building a strip club to cure sex addiction.”

Read the full letter here. Another reader also made some excellent points. Read that letter here. Recent polls and this reader response signals that most Maryland residents do not support the push by lawmakers to allow more casinos.

Poll: No to another casino in Philly

October 15, 2012 11:12 am

A recent poll found the majority of residents were opposed to a second casino in Philadelphia. But since the will of the people doesn’t matter to elected officials when it comes to gambling, the poll results are unlikely to stop the state from moving forward with a plan to award a second casino license in the city.

The Inquirer Pennsylvania Poll found 45 percent of likely voters in the city and the four surrounding Pennsylvania counties opposed building another gaming hall, while 33 percent support it. The poll shows that many voters understand that insidious gambling is not a smart public policy when it comes to funding government operations.

There are two money quotes in the story, both by Paul Boni an attorney and board member of the national group Stop Predatory Gambling:

1. “With casinos now so pervasive, Pennsylvanians are experiencing firsthand the
damage of this government program: state-sponsored gambling houses preying on
human weaknesses,” Boni said. “People realize these aren’t the entertainment and
tourist destinations the politicians described.”

2. “This isn’t simply a matter of not in my backyard,” Boni said.  “Pennsylvanians are saying they’ve had enough of casinos, anywhere. When Mayor Nutter sings the praises of a second casino here in Philadelphia, who exactly is he representing?”

Recall that Nutter, who opposed casinos in Philadelphia as a candidate, now supports casinos. Boni’s point underscores Nutter’s transformation from representing taxpayers to representing the casino interests. Sadly, that is a well-traveled path by many elected officials who lack ideas when it comes to smart economic policy that actually generates wealth for residents rather than strip it away.