Marketing to gambling addicts

November 25, 2013 9:30 am

Oregon is one of many states in search of ways to raise revenues through increased gambling. The problem is there are only so many people who gamble. As such, the state is becoming more and more dependent on marketing to problem gamblers.

In 2011, Oregon officials hired a consultant to learn more about the gambling habits of residents. The consultants examined the habits of gamblers who play video slot and poker machines in bars and restaurants. The consultants found something very disturbing: the majority of gamblers sat in front of the machines alone and played until their money was gone.

Essentially, the bulk of the players had a gambling problem. But rather than do something about the problem the state had created, Oregon officials embarked on an aggressive marketing plan designed to increase play on the machines, according to a report in The Oregonian. The findings should raise a red flag for other states – like Pennsylvania – that are moving to allow video gambling machines in bars and taverns.

Many gambling experts have said that such video gambling machines are among the most addictive. Rather than curb problem gambling the state is looking to feed the addiction.

The Oregonian reported the five-member state Lottery Commission approved spending $250 million over five years to replace the agency’s 12,000-plus video machines with state-of-the art models. The first 3,000 machines are expected to be in taverns, restaurants, strip clubs, bowling alleys and gambling-oriented “delis” by late spring.

The job of elected officials is to protect citizens, not enable policies that destroy lives and ruin families.

Gambling spreads to Pennsylvania bars

November 20, 2013 9:47 am

First it was slots to help the horse racing industry. Then full-blown casinos to supposedly reduce property taxes. Now, Pennsylvania is set to legalize gambling in bars and taverns.

It won’t be long before the state is pushing Internet gambling, online lottery sales and slot machines at airports. In case you haven’t noticed, Harrisburg lawmakers have become one of the biggest gambling addicts in the state.

The state is hooked on the tax revenue that comes from gambling. That explains the latest push to allow gambling in bars and taverns. The move produces little to no economic value and just makes it easier for residents – especially the poor, minorities and working class – to gamble away their paychecks. It is just an extension of the bad public policy that began with the push to legalize slot machines – not to mention the lottery.

Elected officials should look for ways to protect citizens, not strip wealth from them. They should also look for ways to grow the economy rather than push more and more regressive gambling policies.

The African American leaders who endorsed a casino on Market Street in Philadelphia should be ashamed of themselves. The developer claims the proposed casino would benefit African-Americans and Asians, when in fact its location near a public transit hub and Chinatown will only ensure more minority gamblers leave the casino poorer, and many will become addicted to gambling, leaving families even worse off.

Studies show casinos create more costs than benefits. Studies also show there is a decrease in property values and an increase in crime, divorce, suicide and bankruptcy in the areas where casinos locate. To argue otherwise is either disingenuous or ignores the facts. This report here details the many studies that show casinos do more harm than good to a community.

Adelson takes on Internet gambling

November 18, 2013 9:24 am

For once, Sheldon Adelson is right.

The billionaire casino mogul opposes legalizing online gambling because of the danger to children, the poor, elderly and others who could be exploited by easy access to betting via the Internet. (Oh, and another unmentioned reason: Adelson wants his Las Vegas Sands casinos to remain one of the main places to exploit gamblers.)

But this time at least Adelson’s self interest is in line with smart public policy. (There’s a line I never thought I would write.) The Washington Post reports that Adelson is using his deep pockets and lobbying influence to get Congress to ban Internet gambling.

Three states are gearing up to allow Internet gambling and the federal government is considering getting in on the action. As a result, online betting is shaping up to be one of the heaviest lobbying battles in 2014. Most of the major casinos support Internet gambling, provided, of course, they operate the betting sites.

But Adelson is fighting the effort. He has begun hiring lobbyists and public relations experts in Washington and in state capitals to press his case, The Post said.

Adelson has begun hiring lobbyists and public relations experts in Washington and in state capitals nationwide to press his case in what is shaping up to be one of the most heavily lobbied debates of 2014. He plans to launch a advocacy group in January called the Coalition to Stop internet Gambling. (A possible subtitle: And to keep all the gambling money in casinos).

Adelson is correct that Internet gambling could be even more destructive than casinos. Customers will be able to gamble anywhere and anytime from their home or mobile phone. It will be especially difficult to prevent children and teens from gambling. The ease of access is expected to create even more gambling addicts.

So for now at least, welcome Mr. Adelson to the efforts to raise awareness about the dangers of more legalized gambling.

Fahrenkopf’s casino spin: “Mostly False”

November 13, 2013 9:25 am

The gambling industry’s longtime lobbyist and mouthpiece Frank Fahrenkopf was paid millions of dollars annually ($4.6 million in 2011 alone) to spin tales about the wonders of ”gaming.”

In June, Fahrenkopf stepped down from his post as chief executive for the American Gaming Association, the influential lobbying organization (read: money). But he has not stopped spreading inaccurate information about the benefits of gambling.

Only this time PolitiFact Florida, the Pulitzer-winning fact-checking organization, called Fahrenkopf for his truth-stretching. See here: It began after Fahrenkopf wrote an op-ed for the Miami Herald last month claiming that many of the visitors that travel to casino resorts do not gamble.

“The majority of people travelling to these destination resorts are not going for the primary purpose of gambling,” he wrote. “They are visiting to dine at five-star restaurants, watch incredible live shows or participate in business meetings or conventions. Every year, thousands of people flock to these resorts to watch golf tournaments or tennis matches and never set foot in a casino.”

Yo, Frank, if that is the case why not just build the resort and not the casino?

PolitiFact dug into Fahrenkopf’s claim and found that it was “mostly false.” That was putting it nicely.

Fahrenkopf based his claim on a 2012 study by the Las Vegas Convention and Visitors Authority that found 47 percent of all visitors said their primary reason for visiting Las Vegas was vacation or pleasure. Eight percent said they came primarily to gamble. But PolitiFact said the survey questions were open-ended and only asked the “primary” reason for the visit. For example, the survey did not ask if people would have come if the casinos did not exist.

Also, Las Vegas is a different animal from other casino markets in the country, which cater mainly to locals who primarily go to gamble. Indeed, a 2013 study by Fahrenkopf’s own organization, AGA, found that 53 percent of people who frequent casinos across the country always or almost always, gamble.

There is no evidence that Florida casinos would attract mainly tourists – and not gamblers. In fact, residents, not tourists, account for 93 percent of the $2.4 billion in estimated revenue collected by existing casinos in Florida, according to a recent report commissioned by the state Legislature.

New York’s real casino games begin

November 11, 2013 10:37 am

Now that Gov. Cuomo and Albany lawmakers have rammed through the constitutional amendment to legalize commercial casinos, the real games begin as operators maneuver to land a lucrative gambling license.

If history is any guide, the players with the most political clout and deepest pockets will receive a casinos license. Just look at Pennsylvania where the biggest campaign contributors and best connected friends of then-Gov. Ed Rendell and other key influential leaders in the House and Senate were awarded casino licenses – including many who had no casino experience. The winners included two convicted felons.

In New York, it is a safe bet that Cuomo & Co. have a pretty good idea who is going to get the four initial casino licenses. In fact, Albany has already earmarked the geographic areas where the casinos will go and can’t go. That decision was based more on politics than thoughtful economic analysis.

James Featherstonhaigh, a gambling industry lobbyist, part-owner of a Saratoga racino and longtime Cuomo family friend told Crain’s New York he did not know who would get a casino license.

“I don’t have any idea,” Featherstonhaugh said, apparently with a straight face.

The reality is Featherstonaugh is almost assuredly a lock to get a casino license in Saratoga. Other connected players likely to get a casino license include Jeffrey Gural, the owner of the Tioga Downs racino. Gural contributed $400,000 toward a group that purchased ads urging residents to vote to legalize casinos. He will be looking for a return on his investment.

Another likely winner will be Genting, the Malaysian-based casino giant. Genting controls Empire Resorts, which owns the Monticello racino. Genting also owns the lucrative Resorts World racino at the Aqueduct racetrack in Queens. Genting led the casino push shortly after Cuomo was elected and was a major donor to a nonprofit created to back Cuomo’s legislative agenda.

That leaves the rest of the less connected players to fight for the fourth casino license, including Caesars, the Las Vegas operator whose bid for a casino license in Massachusetts was rejected because of its $24 billion in debt and alleged ties to organized crime in Russia. See The New York Times report here.

Days after getting turned away in Massachusetts, Caesars pumped $100,000 into Cuomo’s efforts to pass the casino referendum. Caesars knows how the game gets played. Casino licenses usually go to the best connected and biggest donors.

Once that wheeling and dealing ends, look for Las Vegas operators like Steve Wynn, Sheldon Adeslon’s Las Vegas Sands and MGM to push for casino licenses in Manhattan.

Casino measure approved: Cuomo wins; NY loses

November 6, 2013 5:58 am

New Yorkers voted to change the state constitution to legalize up to seven casinos across the state.

The controversial measure was approved by 57 percent of voters. The vote likely would have been closer if the Cuomo administration had not rigged the ballot to place rosy wording in the referendum that touted potential benefits of casinos without mentioning any of the costs. Polls showed voters were evenly divided over casinos, but support increased after voters were given the misleading language.

Gambling interests also raised $4 million to promote the measure largely through TV ads. Another $59 million has been spent by gambling interests since 2005 on lobbying and donations to lawmakers, including more than $1 million to Gov. Andrew Cuomo. (See The New York Times report here.)

As a candidate, Cuomo never discussed casinos. But eight months into his term, he suddenly championed casinos and later cut a series of deals with Indian casino operators and racetrack operators in order to reduce opposition from gambling interests. He said the casinos could generate “$1 billion in economic activity” for the state but failed to hold any public hearings or conduct a cost-benefit analysis into more gambling. Cuomo’s $1 billion figure came from an interview a gambling industry lobbyist gave to a Albany business publication.

Cuomo also said the first four casinos would be built in upstate New York. This also helped to mute opposition in and around New York City, where polls showed more residents were opposed to casinos. But now that the measure has passed it will only be a matter of time before casinos are built in and around the city.

Cuomo said casinos would generate jobs and economic development for the state. However, the jobs that come from casinos do not outweigh the many costs that will come from having more residents gambling more often. (At several casinos in and around Philadelphia, customers come an average of three to five times a week.) More broadly, casinos do not generate new spending but merely divert it.

Studies show that casinos generate anywhere from 30 percent to 55 percent of their revenues from repeat and problem gamblers. Studies also show that where casinos locate there is an increase in social costs, including more crime, bankruptcy, divorce and suicide. One study found that for every $1 in casino revenue creates $3 in costs.

So Cuomo may have won the casino vote, but New York lost.

NY voters confront rigged casino ballot

November 5, 2013 11:59 am

After more than two years of backroom negotiations and Albany-style deal making, voters in New York will decide if the state should change its constitution to allow commercial casinos.

The wording on the ballot has been rigged in an effort to trick voters into believing that more gambling will provides benefits but no costs. As this CBS report shows, not all voters are buying it.

James Cahill of the New York State Building and Construction Trades Council dismissed evidence that shows casinos produce little new spending and are essentially a regressive tax that strips wealth from communities and hits the elderly, working class and minorities the hardest. Casinos also lead to increased crime, divorce, suicide and bankruptcy in the areas surrounding where they locate.

One study found that every $1 in revenue generated by casinos leads to $3 in social costs - that all taxpayers will pay whether they gamble or not. Other studies have found that anywhere from 30 to 55 percent of casino revenues come from problem gamblers.

Promises of jobs and economic development have done little to reverse the economic fortunes of other areas that have legalized casinos. See Atlantic City, Detroit and Mississippi.

In Illinois, the casinos have helped to create more problem gamblers than jobs.  That explains why one New Yorker said she intends to vote against the casino proposal: “I’m voting no. I’m a gambler and I want to save me from myself,” said Vida Antoinette.

What the smart money says about casinos

November 4, 2013 11:34 am

In a hotly contested race like legalizing casinos in New York, it is worth noting what the leading newspaper editorial boards have to say about the issue.

The New York Times makes the most compelling case against casinos.  Interestingly, the New York Post agrees with The Times: It is not often those two papers are on the same page, which is telling. This must be a bad idea on all fronts.

A number of other leading newspapers urge residents to vote no against casinos, including The Albany Times Union, The Syracuse Post-Dispatch and The Watertown Daily Times. Each paper makes a thoughtful and well-reasoned case against casinos.

What is even more compelling are the papers in support of casinos. Those editorials struggle to make the case for casinos and lack common sense and logic. In doing so, the editorials actually underscore why commercial casinos would be bad for the state.

The New York Daily News said casinos are a lousy way for government to raise money and will lead to more addiction, but vote yes anyway. Uh?

The Poughkeepsie Journal called the casino ballot language “one-sided” and said the state played “fast and loose with this issue,” while failing to mention the “legitimate concerns.” Keep in mind, this is an editorial in support of casinos.

Newsday actually praised Cuomo’s crass politics and secret deal-making. But then added this gem as part of its, ah, casino support: “It’s not that there isn’t plenty to oppose in both the gambling expansion and the way it’s been handled. The casinos may not provide as much upstate revitalization as hoped. They would inevitably increase the number of problem gamblers where they are located.”

With casino supporters like this, who needs an informed opposition?

New York casino vote all about money

November 4, 2013 10:54 am

Gov. Andrew Cuomo talks a good game about casinos creating jobs and tourism. But the real motive behind his push to change the state constitution in order to allow up to seven casinos in New York is money - for gambling interests and state coffers.

That money ultimately will come mainly from the pockets of New Yorkers who would be the losers in this zero sum game.

For some insight into how much money plays a role in the casino vote just look at Tioga Downs, a dumpy harness track and slot parlor in upstate New York. Tioga Downs owner Jeff Gural has spent more than $400,000 to influence the vote for casinos. Gural is not even guaranteed a license but he is expecting a return on his investment.

If Gural gets a casino license, he plans to spend $90 million sprucing up his slots joint. But what about all those great jobs Cuomo has been touting? If Tioga Downs gets a casino license, Gural plans to add 200 permanent jobs paying about $10 an hour or $20,000 a year. That’s about the equivalent of opening a Wal-Mart, not counting the costs that come from casinos. (See The New York Times story here).

In short, about the only person in Tioga County who will see a major economic boost from the casino in Gural. That’s why he has shelled out $400,000 to win the casino vote. That’s also why gambling interests overall have spent $59 million on lobbying and campaign contributions in Albany since 2005. That’s also why Cuomo is acting like the gambling interests’ puppet on a string.

Boston casino vote up in the air

November 4, 2013 9:45 am

Voters are expected to decide on Tuesday whether to approve a casino plan with a partnership between Suffolk Downs in East Boston and Caesars Entertainment Corp.

Except there is one problem: the Massachusetts Gaming Commission rejected Caesars as a partner in the deal, arguing it was unsuitable to do business in the state. The gaming commission cited the Las Vegas  casino company’s $24 billion in debt, alleged ties to organized crime in Russia and a scandal involving a high-roller who racked up a huge gambling debt but now claims Caesars encouraged him to gamble while intoxicated, the New York Times reported.

Heavy debt, mob ties and inducing customers to gamble too much: Sounds like standard operating procedure at most casino companies. Indeed, Caesars complained that the Massachusetts standards were “arbitrary, unreasonable and inconsistent with those that exist in every other gambling jurisdiction.”

Translation: Most state gambling commissions are rubberstamps that look the other way when it comes to red flags and rogue behavior. (See Pennsylvania where two casinos were awarded licenses even though the owners were convicted felons.)

With Caesars gone, Suffolk Down lacks a deep pocketed partner to build and manage the casino. As such, it is unclear what voters will be voting for or against on Tuesday.