Economic Impacts
Warren Buffett Speaks Out Against Government’s Gambling Program
Warren Buffet on Gambling – Transcript
Impact of Casinos on Retail Sales
Taxable retail sales in Iowa cities without casinos grew more than five times faster than sales in cities with casinos, leading researchers to conclude, “the operation of a casino in a mid-size city, far from contributing to economic development, creates a measurable drain on the economy of the city.” Lori Fairchild, PhD, “Impact of Casinos on Retail Sales in Mid-Size Iowa Cities,” Great Plains Business & Economics Conference, Omaha Federal Reserve Bank, Oct. 28, 2005
New Hampshire Study Finds Proposed Casino Would Take Away Local Jobs
In May 2010, an independent New Hampshire Gambling Commission study found that bringing one casino to the state would take away seven existing local jobs for every 10 casino jobs created – yet another example how predatory gambling operators willfully exaggerate the lure of jobs to mislead public opinion. The same report showed one casino would raise $219 million in state revenue but the total social cost would be $287.7 million: a net drain of $68.7 million. Who do you think pays that tab?
Casinos Failed to Bring Prosperity to Connecticut
Despite developing two of the largest casinos on the planet in the 1990s, the state of Connecticut is in dire fiscal shape. The New York Times piece below states that “Connecticut’s finances are among the most troubled in the nation: it is last or close to last in financing pension obligations and retaining reserves for emergencies, and near the top in per-capita debt…Moody’s lowered its outlook for the state’s bond rating to negative from stable.” This is just another example that casinos fail to provide the revenue promised by lobbyists of the predatory gambling trade. And what about jobs? The state has “an abysmal level of job creation and economic growth that has left the state with fewer workers employed now than in 1987.”
Beneath Connecticut’s Image of Affluence, Deep Fiscal Pain
Federal Reserve Study Finds Casinos Do Not Grow Local Economies
A 2006 study by the Federal Reserve Bank of Boston found that patrons who frequent casinos catering to local markets do not bring in any new money to the local economy and are simply substituting gambling for other goods and services. Nationwide the overwhelming majority of casinos cater to locals.
Federal Reserve Bank of Boston Study 2006
Mayor Testifies Foxwoods Casino Has Not Brought Economic Benefits to Town
The former mayor of Ledyard, Connecticut, Wesley Johnson, testified his town has not seen any positive economic impact since the Foxwoods Casino was built there. “There has been no economic development spin-off from the casino. Businesses do not come here,” Johnson said.
Looking Back, Lost Bid to Host a Casino “a blessing”
The English seaside resort town of Blackpool was relieved when it lost a bid to host a “super casino.” Blackpool will now focus its efforts on maintaining its family friendly reputation.
Blackpool’s Casino Loss ‘a Blessing’
Casinos Will Lead to Net Job Loss in Ohio
In the fall of 2009, Ohio voters were faced with a referendum to allow casino gambling in the state. Prior to the election, the Public Policy Analysis Group at Hiram College studied the social and economic effects that this form of predatory gambling would bring to the state. These researchers discovered that there would be a net loss of area jobs in the new casino locations. This would be due to the significant loss of non-casino jobs in these areas. Further, the policy analysts characterized the industry’s claim of creating 34,000 new jobs as “misleading.”
Report on Ohio Gaming Initiative – Statewide Economic and Social Factors
Casinos Wipe Out Local Music Theaters
Bringing casinos into a region severely hurts other cultural arts organizations. Unlike casinos, which thrive on gamblers, local arts and music theaters must make money on ticket sales. They sell tickets when they host popular shows. But popular musicians and comedians often end up playing at casinos, because casinos can pay them more. Casinos also set radius restrictions that ban performers from going to other nearby venues.
“It’s the fact that we can’t get the performer — that’s the problem,” said James D. O’Brien Jr., chairman of the Hanover Theater in Worcester, Massachusetts.
The Bushnell Center for the Performing Arts in Hartford, Connecticut — a 50-mile drive from Foxwoods and Mohegan Sun — provides a glimpse of what happens to theaters. The Bushnell used to attract dozens of pop and rock shows every year. Now, the theater is lucky to get six.
“When the casinos came, that really put the nail in our coffin,” said David Fay, the theater’s president and chief executive officer. “They absolutely take all of the major pop attractions. Luckily, we have not been challenged with Broadway products.”
The economic recession hit the Bushnell hard, eroding the theater’s endowment and leading to a loss of corporate donors. Those factors, combined with competition from casinos, have left the theater with a deficit of more than $1 million.
With casinos, theaters fear competition for big acts
Disney and Florida Chamber of Commerce Oppose Florida Gambling Expansion
The state of Florida often markets itself as a family friendly destination, attracting millions every year to Orlando’s Walt Disney World. That image could change if Florida lawmakers allow predatory gambling giants like Genting, Las Vegas Sands, and Wynn to bring commercial casinos to the state. The state’s tribal casinos oppose the idea because they don’t want the competition, but civic leaders and the Florida Chamber of Commerce fear the kind of economic development that casinos would bring. “The only reason they are even targeting Florida is that they are hopeful that desperate people will reach for desperate measures,” said Mark A. Wilson, the Chamber president. “There is never a good time to push a bad idea.”
In Florida Battle, Casino Cash v. Disney Image
“Destination Resort” Sees Large Growth in Poverty
While predatory gambling operators around the nation are still selling the idea of “destination resorts,” it is important for citizens to consider how one of America’s most well-known destination resort is faring. The 2009 article below from the Press of Atlantic City reports that the “city’s population fell slightly to 34,769 in 2008, down from 35,770 in 2007 – but the percentage of families living in poverty grew to 24 percent from 19 percent in the same period.”
Nobel-Prize Winning Economist Paul Samuelson on Gambling
“There is a substantial economic case to be made against gambling…it involves simply the sterile transfers of money or goods between individuals, creating no new money or goods. Although it creates no output, gambling does nevertheless absorb time and resources. When pursued beyond the limits of recreation, where the main purpose after all is to “kill time,” gambling subtracts from the national income.”
From Economics, 6th edition, 1970
Economist Testifies On the Negative “Spillover” Effects of Predatory Gambling
Economist Loretta Fairchild testified at a hearing in the Nebraska legislature in October 2011 to express her findings that the costs of predatory gambling significantly outweigh any benefits. She also notes that gambling “is one of a very small number of consumer items that economics considers as ‘special cases,’ because almost all types of gambling do have significant ‘spillovers’ on to people who don’t provide the gambling or use it, and these spillovers are mainly negative, harmful ones, on to families, friends and other businesses.”
Testimony of Economist Loretta Fairchild to Nebraska Legislature
Economists Find That Gambling Revenue Comes At the Expense of Sales Tax Revenue
Economists John Jackson and Douglas Walker published an article in Contemporary Economic Policy in early 2011 that showed that the increased revenue that comes from gambling often comes at the expense of sales tax revenue. The two also came to the conclusion that, in general, casinos and greyhound racing tend to decrease state revenues overall.