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Is The Gamble On Casinos Paying Off?

Do we now have a national casino glut? All the problems, less upside?

An artist's rendering of MGM's proposed resort-style casino in Downtown Springfield (Courtesy)

An artist’s rendering of MGM’s proposed resort-style casino in Downtown Springfield, Mass. (Courtesy)

Decades ago, Las Vegas and Atlantic City hit it big with casinos. The jackpot story lingered as gambling and casinos spread across much of the rest of the country, on riverboats and reservations and promises of endless new revenue for struggling states. Best of all, it was casino visitors from out-of-state who would feed your state’s slot machines and coffers. Now, casinos are all over. Two dozen within a hundred miles of Philadelphia. Shakeouts in Indiana and Mississippi. Near “saturation” in the Northeast. Locals now the players. And revenues, down. This hour On Point: the casino pinch.

- Tom Ashbrook

Guests:

Vin Narayanan, Managing editor at the Casino City Times.

Doug Walker, Professor of economics at the College of Charleston, expert on the economic and social effects of casinos and author of Casinonomics: The Socioeconomic Impacts of the Casino Industry, and The Economics of Casino Gambling.

Barbara Dafoe Whitehead, Director of the Center for Thrift and Generosity at the Institute for American Values, a New-York-based think tank focusing on family and social issues, and editor of Franklin’s Thrift: The History of a Lost American Virtue.

From Tom’s reading list:

The Wall Street Journal (Subscription): Casino Boom Pinches Northeastern States – Racetrack casinos used to contribute as much as $240 million a year to Delaware’s tax coffers. But as the Northeast becomes saturated with gambling venues, the state’s casino revenue has tumbled, prompting a new industry request—for a tax break.

The New York Times: Gaming the Poor – In recent years, 23 other states have legalized and licensed commercial (as opposed to Native American) gambling facilities. In the casino-dense Northeast and mid-Atlantic regions, where 26 casinos have opened since 2004 and at least a dozen more are under development, most adults now live within a short drive of one.

ABC News: Tunica Reels as Competition, Recession Hit Casinos – The Tunica Miracle — as boosters called the coming of gambling to what had been an isolated, economically moribund slice of the Mississippi Delta — is over. A boom that peaked with 13,000 jobs has slid into a struggle for survival.

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  • Matt MC

    We are a nation founded on gambling. If you work hard and do all the right things, you have a 1 in 150 shot of making a living for yourself. Roll them dice, America!

  • levigirl

    Yuck… whoever thinks that casino is a decent business is crazy. The only good it does is filling up pockets of execs. Turns neighborhoods into dumps and ruins people’s lives. Job opportunities? Cannot think of a worse place to work than casino

  • TFRX

    Saying “new casino” in 2014 is akin to saying “new video store” circa 1989, or whenever 7-Eleven started renting VHS tapes: The market is pretty much spoken for.

  • Chuck P

    Casinos = a tax on the poor who are hoping to magically make it rich.

  • Guest

    Living in Western North Carolina, it’s tough to go to the casino on the Cherokee reservation and yet still you walk a couple blocks away from the elaborate, shiny buildings and there are abandoned homes, drug busts and a false sense of success…

  • GarretWoodward

    Living in Western North Carolina, it’s tough to go to the casino on the local Native American reservation and yet still you walk down the road away from the elaborate, shiny buildings and there are abandoned homes, drug busts and a false sense of success…

    • Human2013

      I just left Greenwich, CT and it’s the same story. Aston Martin dealership five miles from abject poverty — welcome to America.

  • James

    Casinos-pseudo government organizations built to stuff government coffers….how could this have ever gone wrong?

  • J__o__h__n

    Why not administer a national math test and charge people who fail it a higher tax rate and give a randomly selected handful of them some prizes?

    • Red

      Bingo!

  • Human2013

    Casinos belong in the middle of the desert, not next to the neighborhood YMCA.

  • Red

    Casinos (and lottery) revenue to prop up state programs represent failed government and political cowardice. In addition to being a regressive tax on the least able to afford it, there are all manner of hidden costs which must be borne by the taxpayer. Disgusting.

  • Yar

    They really are simply drug delivery systems.

    A complex system of neurotransmitters, such as serotonin, dopamine, endogenous opioids and hormones, are responsible for what we feel, how we think and what we do.
    Imbalances within this system have been shown to influence both behavioral and substance addictions.
    http://www.ncrg.org/sites/default/files/uploads/…/ncrgmonograph6final.pdf

  • adks12020

    There are a ton of proposals for casinos in the capital district of New York where I live. The only cities jumping at the opportunities are the financially desperate ones. Even Saratoga rejected the proposal for one there and it’s not like Saratoga is opposed to gambling. They already have the race track and a racino. Schenectady, Rotterdam, Rensslear, they are all financially depressed and they are all fighting for a casino hoping it’s the magic bullet. Some cities can’t even afford to pay the fees and are hoping to get the state to waive the fees they are so desperate. Personally I don’t want a casino in my city (Albany) and I’m glad the offer is off the table for that.

  • hennorama

    Ahhh .. the good old days, when one had to travel to gamble, and when gambling was mostly illegal and immoral.

  • J__o__h__n

    I don’t get the appeal of slot machines. I went to Atlantic City once and spent $20 on Black Jack which was fun but I’d rather play it on the computer free. I spent $5 on a slot machine and couldn’t wait for the game to end as it was really boring.

  • hennorama

    Casinos aren’t built for the winners.

    • IHateFatChicks

      The table pull rate is approximately 94+%. This I know because they license my software, along with a significant portion of the Fortune 300. The fact remains that Casino’s are highly effective operators and business men. Nobody is being water boarded to gamble. They go there of their own free will.

      • hennorama

        LoathsomeLoather — thank you for adding nothing to the discussion, as usual.

        • IHateFatChicks

          That’s an ironic comment coming an uneducated, poor, fat, old, unattractive women like you.

          • hennorama

            HaterOfLargePoultry — your knowledge of the English language is obviously superior, and it combines well with your erroneous assumptions:

            “… an uneducated …women …”

            Well done, truly.

  • J__o__h__n

    I don’t want a casino in the Boston area to compete with local concert venues. I don’t want to see a shortened show to get people back to throwing their money away at the casino/

  • Duras

    I can see how gambling is necessary in a wasteland like Nevada. However, Governor Scott of Florida is working hard to make gambling completely legal. He sees gambling as a revenue source too.

    Florida doesn’t need an economic gimmick. Gambling is nothing more than a mathematical certainty that working class money would be lost to gambling corporations. The more poor and desperate people are, and with the increased loss of real social mobility, the more they will throw their money away.

  • adks12020

    I’ve never understood the appeal of gambling. I’ve gone to a few casinos with friends over the years and I’m always bored within an hour. How is it entertaining to just lose a bunch of money in a room with a bunch of flashing lights, annoying sounds and degenerates? I know there some people get excitement out of it, similar to the feeling others get from extreme sports, drugs, etc. I am really glad that doesn’t apply to me.

  • hennorama

    Casinos often encourage tax avoidance.

    The IRS requires that gambling winnings are reported on Form W-2G if the winnings meet various dollar thresholds, depending on the game: $600, $1,200, $1,500, $5,000, etc.

    Regular gamblers know these reporting requirements, so casinos routinely promote games with prizes that are one dollar under the reporting requirements ($599, $1,119, etc.).

    • Jeff

      Oh please, that’s like saying people shouldn’t take tax deductions…if that’s the rule then that’s the rule. Don’t attack someone for taking a normal tax deduction…unless they’re the one complaining about tax cheats.

      • hennorama

        Jeff — thank you for your response.

        1. You’re conflating income reporting requirements for tax deductions.

        2. Individual taxpayers are required to report all of their income, regardless of whether the payee sends a reporting document to the tax authorities. However, it’s much easier to not report one;s income if there is no documentation.

        3. There’s no other explanation for prizes that are exactly one dollar under reporting requirements.

        • Jeff

          As long as I can write off every dollar I lose at a casino in the same proportion as they tax my dollars I win while gambling then I’d agree with you…but we both know it’s not the situation.

          • hennorama

            Jeff — TYFYR.

            Indeed, the government is happy to share in all of your winnings, but not all of your losses, unless you are a professional gambler, of course.

            Regardless, it’s obvious that the casinos, racetracks, bingo halls, etc. are promoting tax avoidance, based on the dollar amounts of the prizes offered.

            Nothing you have written refutes that basic point.

  • Dab200

    This nicely links to your previous hour: society choices. And it’s so sad to learn that we prefer to give casinos $30 ml in tax cuts rather than put that money into schools, infrastructure, paid maternity leaves, etc

  • hennorama

    Yes! Let’s race to the bottom, and pay the casinos to come to different locations!

    (Notice how they use the jobs aspect rather than the tax revenue projections?)

  • DeJay79

    “Invite it in” -Tom ??? I disagree with the idea that we can keep Gambling out of society. If we lock it away it just goes underground and brings crime, real crime, with it.

    if it is out in the open then we can at-least try to help those who have a problem.

    • Godzilla the Intellectual

      AT HUMANITY’S CURRENT AVERAGE STANDARD OF CONSCIOUSNESS, YOUR STATEMENT IS TRUE.

  • nj_v2

    Gutless, immoral politicians, unable or unwilling to formulate economic and tax policy that serves the population as a whole, resort to gambling as a fake solution to economic problems that they, in part, have a hand in creating.

    Casinos, and state-sponsored lotteries, prey on and take advantage of vulnerable, desperate people. Those people are going to add to the demand on public, social services, so we all end up paying for the problems created by these predatory businesses, while owners and investors head off to tropical waters on their yachts.

    F*** casinos and the corrupt thinking they represent.

    • http://neilblanchard.blogspot.com/ Neil Blanchard

      Hear, hear! Well said.

    • Godzilla the Intellectual

      Unless you happen to be a big winner! Then they are awesome!

  • twenty_niner

    So if gambling is no good, what vices are the poor going to be allowed to have? Cigarettes are out. Alcohol is out. Pot seems to be OK. I guess it’s pot. Maybe, we just get a bus load of retirees on Social Security and get them all high.

    • mtoups

      We pay the reitirees their ss checks it comes out of our taxes and considering that the average in poor health retireee burns through their lifetime contribution to SS in the first few years of retirement ..if they are going to gamble it away 100% of it should go back to the state/local governments … not to corperate giants who just push wages down and provide less and less quality jobs.

      • twenty_niner

        If we’re going to control what people do with their money, why even write a check? Just issue vouchers (like food stamps) that can only be used to buy goods and services on a pre-approved list.

        • StilllHere

          That would never fly. You can’t take away people’s ability to spend other people’s money how they want.

    • http://neilblanchard.blogspot.com/ Neil Blanchard

      You are concerned wit “the poor”? Gambling only helps those running the casino. Casinos just cannibalize our economy – they produce nothing except problems.

      • twenty_niner

        “they produce nothing except problems”

        So do distilleries. I think it’s time to ban alcohol.

        • http://neilblanchard.blogspot.com/ Neil Blanchard

          That is not true. Alcohol is an actual product, it takes things and physically makes something useful with it.

          Who said anything about banning casinos? We just need to be realistic – they are not what they promise.

          • twenty_niner

            Movie theaters don’t produce anything.

            “We just need to be realistic – they are not what they promise.”

            What do they promise? They take the other side of a bet that generally has the odds in their favor. If they lose, they pay. If you lose, you pay. Or you can choose not to take the bet.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            Making a movie is a lot of work, and it is a real thing. The theater is required as part of that process.

          • twenty_niner

            “The theater is required as part of that process.”

            It is? Would be news to Netflix.

            Further, making a slot machine is a lot of work. The casino is required to house the slot machine.

            Further, who cares how much work is involved? There’s clearly a market for movies and gambling as forms or entertainment.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            You pay for Netflix, and you get your movies. Not the same thing as gambling, at all.

          • twenty_niner

            “Not the same thing as gambling, at all.”

            Good lord. The fee for your gambling entertainment is the house percentage.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            If you are addicted to Netflix, then you only waste your own time.

            Not even close to the same as gambling.

          • twenty_niner

            “If you are addicted to Netflix, then you only waste your own time.”

            And you probably lose your job.

            There are many activities that if done to excess will have bad consequences.

          • Lawrence

            No one I know of has had a house foreclosed on them for going to the movies.

            Gambling is addictive and is extractive. It has been illegal for a reason and now we have to make a decision. That decision should weigh all of the facts like the millions who lost everything to it.

          • Godzilla the Intellectual

            Making fiat currency that passes for the real thing is also a lot of work!

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            That is a crime of a different sort.

        • Maenad

          Look, banning casinos or a gambling prohibition is not the topic. We have government and the political class actively working hand in glove with money-laundering casino mafioso to dump these schemes on the public and specifically target the poor and job-hungry peasants when they clearly know casinos do not create healthy vibrant communities; they suck out resources to an elite few.

  • mtoups

    Casinos look for places with the lowest income and then move in and take advantage of the poor workforce while the tax money they produce goes into the sand beach in front of hte casino and not to the local infastructure after katrina our roads where badly dammaged the casino got new raods and we still have yet to see any in our neiborhood 9 years later…

  • Fungi2bewith

    I called in but the screener didn’t like my question. Maybe you will like my question.

    For every one million dollars in tax revenue, how many additional suicides take place as a result?
    I have tried to research this myself and the answer is not readily available.

    • tbphkm33

      That is an interesting question. In this case, there is a direct correlation between the two.

    • http://neilblanchard.blogspot.com/ Neil Blanchard

      That is certainly not the only problem with casinos.

  • tbphkm33

    I wonder what percentage of the population actually go to casinos. Maybe I am atypical, but off the top of my head I only know one couple who infrequently will go to a casino. Appears they go for the food in a different environment and don’t really gamble.

    Seems that when casinos broke out of Atlantic City and Las Vegas 20 years ago, it got to be a fad for a few years, but now, it is a dying industry. Even Las Vegas is working hard to re-brand itself as family friendly with leisure activities not directly tied to gambling.

    • Kyerion Printup

      It also became a way for a state to raise revenue to fund programs, without having to raise taxes to pay for them. Raising taxes is so hard politically, but revenues obtained from gambling to contribute to higher education costs is much easier. Plus, casinos “create jobs”, as their supporters like to point out. It’s an easy way out from having to make difficult decisions, among other crutches.

  • http://neilblanchard.blogspot.com/ Neil Blanchard

    Gambling is the ultimate *extractive* industry. It is only good at separating a fool and his money, and there is a zero multiplier.

    There is no public benefit – and there are plenty of public costs.

    Gambling opens the door wide for organized crime, and for prostitution.

    We do not need casino gambling! We will be far better off without them.

    • Steve_in_Vermont

      While I agree with what you say, it appears (as a society) we’re unwilling to tell fools what to do with their money.

      • http://neilblanchard.blogspot.com/ Neil Blanchard

        We do not have to oblige them. We have lotteries, and they are virtually the same thing.

        • Steve_in_Vermont

          And television is full of ads for products to do everything, keep us alert, help us sleep, sexual dysfunction, indigestion, increase energy, and on and on. Most people who buy these products have no idea what they are ingesting, who makes them, or side affects. Fools and their money…..and I don’t have the time or inclination to tell them what to do with their money.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            Different discussion. I cannot stand watching commercial TV. Ads are a huge turn off – and I almost always mute them and ignore them.

          • Steve_in_Vermont

            There is a connection. Watch the ads for state lotteries and casinos. They are selling dreams and, from the results, lots of people are buying.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            Ya, lotteries are like casinos – without the public risk. But TV … is not really related to casinos.

    • twenty_niner

      “There is no public benefit – and there are plenty of public costs.”

      There are lots of vices with no public benefit. What is the public benefit of smoking?

      • http://neilblanchard.blogspot.com/ Neil Blanchard

        Are we talking about smoking?

        • twenty_niner

          Yes.

          Gambling and smoking can both be vices or harmless forms of entertainment if done responsibly.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            You’re talking about smoking, I’m not.

            Smoking is fine is the facts are known. Tobacco companies lied, and they manipulated the nicotine content, and they put accelerants in cigarettes – that have killed thousands in the resulting fires – and then we have poisonous fire retardants, to boot.

            Cigarettes without accelerants last much longer and they go out if you stop puffing on them.

          • twenty_niner

            The larger discussion is about adult activities that constitute harmless entertainment if undertaken responsibly and devastating vices if abused. The categories include: sex, drugs, smoking (both tobacco and pot), alcohol, and gambling. All have large potential costs to society but previous attempts to legislate behavior have failed because people do what they do.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            I heard a discussion about casinos and gambling.

          • twenty_niner

            It’s called extrapolation to reach deeper understanding.

            This may be difficult, but as an exercise, use your imagination. and try to draw parallels between different activities that have little to no benefit to society but are nevertheless widely popular and thus hard to regulate.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            Could you be any more condescending? Please …

          • Godzilla the Intellectual

            You usually get free drinks when you gamble. LOL

          • Lawrence

            Gambling is already illegal. The choice is to allow more of it to spread like a disease.

    • Lawrence

      Exactly. You are well read, well informed.

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