January 30, 2007

To Casino Opponents

In response to Lefty’s comment, I thought I’d post some data rather than just my feelings about the prospect of a casino.

A casino is not the same thing as a high stakes BINGO establishment. It’s hard for me to imagine high stakes BINGO being much of a draw off the highway. I was against that, too.

Money is already going out of the state to the tune of 890 million dollars a year. That amount grew over 6 percent between 2004 and 2005.

Very pointedly, economic theory and the preponderance of evidence indicates that the aggregate direct and indirect impacts of construction, operation, and taxation of casinos are significantly positive. Broader economic costs relating to factors such as the use of government services and changes in property values are not trivial, but they do not come close to canceling out the more conventional output, income, and employment gains. Moreover, these broader negative impacts might be offset by some longer-term positive impacts stemming from increased spending on education, infrastructure, and redevelopment. Social costs of gambling are beyond the scope of the study, but they warrant careful study. The preponderance of empirical studies indicate claims of the complete “cannibalization” of pre-existing local restaurants and entertainment facilities by a mere shift in resident spending is grossly exaggerated. The substitution effect is not insignificant, but it is offset somewhat by empirical verification of a recapture effect. These two effects vary on a case-by-case basis, but we have enough evidence to place bounds on their size if we know the proportion of casino patrons who are tourists and the distance of the casino to its nearest competitors elsewhere. Casino construction usually represents an infusion of capital to a region, though profits are not necessarily reinvested in it. However, taxation of casino revenues and profits are usually high, and their recirculation in the region is complete. - THE REGIONAL ECONOMIC IMPACTS OF CASINO GAMBLING: ASSESSMENT OF THE LITERATURE AND ESTABLISHMENT OF A RESEARCH AGENDA by Adam Rose and Associates

Last year, the CFPA did a study on all the money leaving MA and RI to go to CT casinos (that’s where I got the 890 million figure). That’s already money that isn’t being spent on local businesses. People who used to go out on weekends to local establishments are already taking their money elsewhere. I know many of these people. I know some would rather stay local.

I don’t have a reference, but I know that there were votes in the early 00’s in Iowa about whether to retain the gaming establishments there after having had them for 8 years. The measures to retain them overwhelmingly passed. That speaks to their perceptions of the impact after nearly a decade.

“What else comes along with a casino?” I say, ask these people in Iowa.

It seems to me like there is research and history to go by to make this decision.

On the site of a National Casino Impact Study Commission I found this table which lists 27 studies of overall economic impact of casino gambling. Out of the 27, only two reported an overall negative impact, and one of those was in Florida where the reason cited was that it was inconsistent with local tourism. 7 of the studies reported neutral to slightly positive impact. The 18 remaining ranged from significantly to highly positive overall impact.

Opponents to casino gambling can find supportive studies if they choose very carefully, but there is no shortage of reports showing benefits, nor of residents or officials saying they’re glad to have casinos in their areas.

As the CFPA report shows, our residents also want a casino. In Rhode Island there were a number of reasons it made less sense for them to build theirs. They already have a gaming industry would overlap with casino business, even though a lot of money leaves Rhode Island as well. And I sensed an element of opposition to the Native American ownership of the casino that was waiting on the heels of the amendment.

At this point in Massachusetts it makes more sense to build a casino. It may be only a matter of time whether it is the right thing or not, considering the way opinions are running. No doubt there will be more questions, more studies but I can’t say if opponents will change their minds.

Be that as it may, I have a wish for casino opponents. Instead of wasting their energy fighting one of the few and possibly only things that can stem the hemorrhaging of nearly 900 million dollars a year and rising, please adopt a new cause. Read the report recommendations of commissions that have studied casino gambling impact and urge legislators to legalize casino gambling with appropriate protective laws.

For instance:

3-5 The Commission recognizes the difficulty of campaign finance reform in general and an industry-specific contribution restriction in particular. Nonetheless, the Commission believes that there are sound reasons to recommend that states adopt tight restrictions on contributions to state and local campaigns by entities—corporate, private, or tribal—that have applied for or have been granted the privilege of operating gambling facilities.

No doubt we will soon be hearing opponents characterize casino supporters as believing that a casino is going to be the savior of the region. [Edited: What I mean is that a common argument against something like this is to overstate the predictions of supporters. Of course not all opponents will take this position. I’m merely anticipating its use by some people.] I will deny that strawman right off the bat; a casino is going to bring both benefits and new challenges. Now is the time to switch focus and start making sure that we are planning to do this right. Because if a casino is just a matter of time, it is in all of our interests to make sure the region is successful with it.

Posted by James at January 30, 2007 12:43 AM
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Comments

As someone who has three? casinos within spittin' distance, it's a Catch-22. Sure, you want to keep the money being spent in YOUR state, but you are also adding local venues for addictive behavior to flourish. That's what gets me the most.

I guess the same argument can be made about having a liquor store on every corner, but it gets me seeing the amount of money that casinos make.

Posted by: pippa at January 30, 2007 6:26 AM

Massachusetts is small, as states go. MA and RI are uniquely affected by their neighbors. You're never too far from Connecticut here.

I sympathize with the addictive behavior aspect. But unfortunately there's no way to move Massachusetts farther from Connecticut, so there's no way to keep people away from the casinos. For those who don't want to drive, there are buses leaving all the time.

And, of course, for the people who can least afford a casino, there's the lottery anyway. We've got the addicting behavior well-covered.

Posted by: James at January 30, 2007 7:23 AM

I feel exploited. lol

I was tired..if I had known I would inspire a post I would have done some research instead of writing a gut-feeling comment.

Anyway looking at the report you link to there are still points of concern. Casino's that fail, admittance that this report's scope doesn't cover the social ills of gambling, etc. etc.

I understand the need of an economic engine but my fear is that we embrace the idea to such a degree that we ignore that hazards, don't anticipate or plan for them.

I also wonder how many casinos can this part of New England support?

I think if it was done right; placed perhaps east of New Bedford, (to get Cape tourists and still be close enough to RI and Boston) a Casino could be an engine, but if done wrong it's not going benefit the existing 'engine' and it's going to hurt instead.

The last time around most everyone felt that the bingo hall was simply a first step, a foot in the door, to a casino, there were all sorts of promises and not nearly enough specifics. What I'm saying is before we go and build this thing let's see the specifics.

If it's something that is good for the state but bad for area..screw the state, if bring casino to this area is going to stall the efforts of bringing high-tech industry this way, I vote no. But if it is done right, and helps the area and makes it the area more attractive to other industry AND we plan for the ills..I guess it's worth looking into.


Posted by: Lefty at January 30, 2007 9:31 AM

On Freeport, Long Island (NY,) gambling boats pull out three miles into the ocean into international territory (I don'tknow whether New York derives any revenue because the boats are docked there.) Does Massachusetts have boats like these, too? Would it be possible to charge docking fees/taxes that were a percentage of gross revenues?

There are all sorts of ways to get around the gambling prohibitions, and things are getting even more creative.

In the state where I live, which doesn't even allow lottery tickets and has only approved church bingos two months ago (yes, I kid you not--sigh....) a developer bought riverfront land that belonged to an Indian tribe 100 years ago and announced his intention to give it back to them!!!!!

So that they could do what they wanted to with it.

And, of course, he will build hotels and shopping adjacent to whatever they decide to build there.

There were protests,but it couldn't be stopped.

Does Massachusetts have any land they can give back to a tribe?

Posted by: frazzledspice at January 30, 2007 9:54 AM

I fully admit that my first post was a gut-feeling post; I didn't mean to pick on you. But you called for more info and I realized that I hadn't provided anything like that earlier, just my opinion.

Lefty, I agree!

Specifics, and plans for success are important, which is why I'd rather see the opinion you're expressing, and see some discussion.

The reports I looked at last night did have recommendations and warnings about the pitfalls of a casino. As talk about this possibility progresses, I expect (hope) to hear actual details that convince me this is being done right. (That political contributions bit is particularly important, I think)

I will be disappointed if those don't materialize. But this is part of why we should now be focused on the recommendations given by past studies. These ideas need to be built in to casino plans and laws. If a vocal opposition is merely against the casino, they won't be able to lend their voice to that of the people who want the casino done right.

If we don't have loud discussions that let our lawmakers know that we are aware of what we want as protection (campaign finance laws, the option to review and vote again later, limits on marketing, equitable taxes, local jobs, gambling addiction assistance, youth education vs. gambling abuse, etc.) we might well get a raw deal.

So, let's be smart about it.

Posted by: James at January 30, 2007 9:57 AM

Doc,

I didn't really feel all that picked on..I'm actually flattered that my comment was worthy of your response.

I'm very 'gut-feeling' on this and I really don't have the time to really research this the way it needs to be.

I do have concerns about pegging our hopes on gambling and exactly what the long term ramifictions are.

I look forward to seeing what response you get to this.

Posted by: Lefty at January 30, 2007 10:49 AM

Unfortunately, none of the facts seemed to matter when RI voted on a Casino. BLB poured millions into a group fronted by some conservative Republicans and local restaurant owners and their entire strategy was to say "Harrah's" every 2.4 seconds. They convinved the voters that the casino had nothing to do with the Narragansetts and that Harrah's was getting a special backroom deal where they would pay no taxes and suck all of the money out of the state.

I find the last argument the most interesting since the other gambling ventures in the state are owned by foriegn companies, and most of the new development for the last decade has been out-of-state chain stores and chain restaurants moving in. Yet somehow when the Narragansetts want to build a casino we then start worrying about money going out of state.

Posted by: DG at January 30, 2007 10:50 AM

Frazz:

I don't think we allow "Cruises to nowhere" in Massachusetts, and I know that some of the reports I read recommend against the practice. I'm not certain why, but it may be that there is less local benefit in the case of such cruises.

There is definitely land that could be used for a casino, and over the years there have been plans. I am not familiar with any of the plans in the past, or any current plans, but I'll be keeping my eyes peeled for details.

Along with the fears Lefty expressed, and I agreed with, I have another fear. That Massachusetts will change the gaming laws and plans for a casino will progress, but local opposition in the SouthCoast region will bee a deterrent and Western MA and/or in Boston will build casinos.

You snooze, you lose. Our local representation and citizenry had better get educated about this quickly, attract proposals and make sure that we take advantage of a change in the laws rather than sit on the sidelines and accept the consequences.

Posted by: James at January 30, 2007 10:52 AM

DG:

Yep - I noticed that, and I couldn't believe it when Rhode Island voted that down. Of course, I was thinking that Southeastern Mass had screwed itself again, with the help of Boston, by not being able to get MA law changed and build a casino in the area. And once RI had built a casino, I thought SE MA would have less motivation and leverage to make a deal.

I thought we'd still eventually get a casino in MA someday when the laws changed, but that we'd get a lot less benefit from being so late in the game.

So, when RI didn't pass it I was shocked, because I thought they were looking at the same situation.

The local opposition here may be different. We don't have as much gaming in state already. I think our political opposition is the lottery. Not that I'm an expert on the subject, but if thee are politicians who have a stake in that lottery money, I don't imagine they favor a casino (even though the demographics are slightly different).

I don't know if we'll see lots of local gaming money poured into anti-casino ads. Maybe we'll see the same people who launched those ads in RI do the same here, if they think a casino here will hurt their gaming.

Posted by: James at January 30, 2007 11:04 AM

I can see where the dog track people might be against it... unless there is some way they can take advantage of it.

Who else would be affected? Do we have anything else state besides dog track and the lottery?

Posted by: Julie at January 30, 2007 11:20 AM

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