Rolling the Dice on Casinos
12 November 2009
5 Comments
Ohio voters recently passed a constitutional amendment that will allow for the construction of four casinos in the state for the first time.
One will be located in each Toledo, Cleveland, Columbus and Cincinnati.
Ohio voters have turned down ballot initiatives like this one before. But it seems this time the need for jobs and the pervasiveness of casino gambling in neighbor states helped sway the electorate.
Anyway, there’s been a lot of debate over whether this will ultimately be good or bad. I thought it would be interesting to hear from other Rustifarians about their cities’ experiences with casino gambling.
What’s the word Pittsburgh? Detroit? St. Louis?
-AS
I’ve been to all three casinos in Detroit. Having stood around and watched people down-on-their-luck rolling dice with their welfare checks and praying to hit it big, I am convinced it will be similar in Ohio cities too. I’m also confident that, had every Ohio voter been required to take a field trip to the Detroit casinos and see what they’ve done in that city, the amendment would have been crushed.
The Detroit Free Press recently had an article about the tax breakdown in Detroit, and noted that casino tax revenue now accounts for a significant portion of total revenue, and the city has become essentially dependent on it to continue to run the government. Once the Toledo casino opens, Detroit’s city government is likely to be, for lack of a better word, screwed.
The best research on casino gambling indicates that such businesses are beneficial to cities when greater than 75% of the visitors come from out of state. There is no prayer that Ohio’s casinos (or any of the rust belt states) can even come close. Further, there is pretty good evidence that Las Vegas has diversified its revenue away from gambling in the past two decades and now a little less than half of all spending on the Strip is on activities other than gambling. On the other hand, less glamorous cities (like Tunica, MS, East Chicago, IN, etc.) generate about 90% of their revenue from gambling operations, and prey on the people who typically cannot afford it.
The argument that casinos will create construction jobs is valid, but it misses the point that any construction will create construction jobs. Ohio’s cities have infrastructure that is literally falling down. As far as construction opportunities go, a casino is far from the only option.
I’m generally skeptical of the casinos-will-cure-all-our-ills thinking.
I doubt that many people will come from out of state to gamble in Ohio. Why would they? People in most of the surrounding states can already gamble at home.
Several years ago I interviewed Ohio Senator George Voinovich, a long-time gambling opponent. He made the point that any income that casinos get likely comes at the expense of other area businesses, restaurants and shops, as people spend money at the casinos they would otherwise have spent at another local business.
And I’m sure sometimes, as Rob said, people are gambling money they can’t afford to be spending in the first place.
I just don’t understand how we can gamble our way to prosperity.
I’m also worried about the marginal return, as eluded to in the Detroit and Toledo example. Every casino that gets built shrinks the market that other casinos are serving, and I would think that exacerbates the proportion of people visiting who are already local to the economy. In Cleveland, for instance, we’ll have a casino two hours to our southeast, one two hours to our south, one two hours to our west and three three hours to our northwest. Um, that’s a density of operations that even Ikea can’t support! Granted, if people were traveling out-of-region and out-of-state to spend that money anyway, I’m glad we get to keep it. But how many people, including people of limited means, will respond to the allure of a casino in their backyard more than they would one two or three hours away?
There have also been suggestions that Ohio is facing massive budget deficits in 2010 which are expected to peak in 2011 and further suggestions that those holes will likely get plugged by cutting state investments in local economic development and education. Some are suggesting that it will be an economic wash for the cities that host casinos and that the state will just break even. Ugh. Depressing.
[...] Ohio voters recently voted to allow casinos in their state. Does your city have them? What has your experience been? [...]
There’s a large anti-casino movement spreading quickly in Columbus, both on the grassroots and leadership levels. Every day it’s looking more and more like it’s not going to get built here.
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