Wednesday, March 24, 2010

"Getting Slots and Casinos Right"

There are a number of people who have the mistaken impression that it's possible to create the perfect casino, or incorporate slots in Massachusetts through the perfect plan. Many other states have been down the same road, of course, and all of them failed -- but we're the Hub of the Universe, so certainly, we can get it right. Right? Well, for people who "just" want to capture the revenue we "lose" to Connecticut, or for the people who think we can "mitigate" the effects and build the "perfect" casino, I thought I'd design one which would a) only aim for the revenue of Massachusetts citizens already playing in Connecticut or those who would play in that sort of casual fashion and b) create jobs and tax revenue without irreparably damaging regional businesses and communities. Sound difficult? It is, but this is an academic question, so let's do it.

First and foremost, the slot bill would have to include a provision which would limit the amount of money players could spend on slot machines and gambling tables, say $50 a week, which would allow players to play casually while mitigating the worst effects for problem gamblers, but capping their damage to $2,600 a year -- a lot of money, but even for the most addicted, much less than they'd otherwise spend. Doing so would allow all those Massachusetts-to-Connecticut gamblers to spend the money they were spending in Connecticut here, while "mitigating" the damage done to families and communities by problem gamblers who often spend many magnitudes more than that. (No doubt the Massachusetts Teachers Association, who's accountant from a few years ago who embezzled $800,000 from the union to pay for his gambling addiction, would appreciate this proviso.)

Then, as Martha Coakley already stated, we'd need to create a state-run gambling commission that would oversee slot parlors and casinos, an entirely new state bureaucracy with around 1,000 employees (the Pike would have only wished they could have had it so good). In addition to regulating the casinos and collecting the state's tax dollars, they'd also have to ensure each slot parlor and casino joined a network that would keep track of who's reached their weekly cap, so they don't just head to the next casino to circumvent it. That's neither a pretty nor inexpensive thing to do, and would require a lot of work, not to mention make players less inclined to gamble because of privacy issues. I'm sure the casinos can come up with a Magical Pony to solve that potential hiccup, right?

So, we've now successfully captured those Connecticut dollars and mitigated the worst of the effects on potential problem gamblers (though, certainly, we'd need to shoot off at least 5-10 million a year from our tax revenue to pay for addiction services, but that's just slim pick'ns, right?). Now we just need to protect our regional and local small businesses, as well as nonprofits, within at least 50 mile zones surrounding each casino. How do we do that?

Well, first we ban any theaters inside the casinos larger than roughly 200 seats -- the state's theater nonprofits are being overly generous and pleading for a 350-seat cap, but that's just because they're so desperate that there be a cap at all. Even a 350 seat theater at a casino will lead to many nonprofits around the state to combust, as well as many restaurants, pubs and cafes nearby them. Additionally, casinos and slot parlors would have to be banned from including any non-competing clauses in their contracts when they book any musicians or comedians.

Second, we need to target retail and restaurant space within the casino. There would have to be much less restaurant and retail space within those casinos than there would be demand, otherwise there would be no reason to actually leave the casinos. Of course, the casinos know that -- which is why they build their casinos in the way they do. Premium restaurants and non-gambling entertainment venues (ie dance clubs) would have to be outright banned or severely capped, while only allowing for a few places to grab a quick bite and some small retail space for, perhaps, a gift shop for anyone staying at the hotel (if we should even allow it to have a hotel). Additionally, casinos and slot parlors would have to conform to all state and local business practices, as well as banned from practices that other businesses couldn't compete with -- ie smoking would have to be banned, drinking hours would have to conform to local and state standards, and we'd have to ban free drinks, because there's no way local businesses could compete with that.

We'd also have to show the casinos that Massachusetts means business. We'd need to create massive penalties for violating any of these rules, so casinos don't decide to just ignore them and pay any minor fine they accrue along the way. Give a free drink to slot players and get caught? You lose your liquor license. Allow someone to exceed the $50 gambling limit? The gambling license is suspended for a month. Additionally, the casinos would have to know that they couldn't just accept these provisions to get their foot in the door, then use their massive influence later to get things changed the way they'd want it. That's a very tough task to do -- likely, the most practical way of doing it would be to make these provisions a part of the license. Changing the terms of the deal then would have to necessitate buying an entirely new license, which Massachusetts would have to charge tens of millions of dollars for.

Think any racino, casino or slot parlor would want to build one of those casinos in Massachusetts? I doubt it. No such casino could ever be profitable. Let's face it, folks, there is no magical pony here -- we can't have our cake and eat it, too. And if ever these problems could be solved, then we'd have to start talking about how many hundreds of millions to charge them to offset losses to the state lottery and additional expenses they'd cause to regional cities and towns. There is no perfect casino, except if perfect is defined by "the House always wins," because, no matter what, if the state legislator votes for the special interests who have the Speaker on speed dial, Massachusetts loses. Our communities lose. Our people, our families and our neighbors will suffer.


Middleboro Remembers said...

Pretty funny, Ryan!

Before the ink is dry the Industry knows how they're going to get more.

If you don't give it them, they'll get it in bankruptcy court, oh, like, maybe Twin Rivers got 24/7 365 gambling that the host community strongly opposed.

Or like Steve Norton of Centaur/Northeast Realty filed for bankruptcy in 2 states.

And many others.

You don't control them.

They control you.

They've overstated jobs and revenue, understated costs.

When the fiscal mud hits the fan, Beacon Hill will be left with no choice but to add a chicken to every pot and a slot on every corner.

Professor Goodman, who himself gambles, wrote about the "Ladder Approach" long before I discovered his book explained it. Simply watching the Industry it is presented clearly - and we have seen it already.

It's not simply SLOTS to save the tracks, it is already full blown casinos at each of the tracks to make Slot Parlor sound less cheesy.

Before the incorrectly named Destination Resorts get built, they'll become like Parx, MacDonald's Slot Parlors, the Junk Food Alley of Gambling.

It's no longer simply 2 or 3 falsely labelled Destination Resorts, it's really -

2 or 3 mega slot parlors
4 slots parlors at tracks
2 slot parlors for recognized Native American Tribes
6 for Native American Tribes that have recognition pending

1 slot parlor at Logan Airport was included in Senator Pacheco's legislation submitted last year

That's 15 or 16 by my count.

It would be funny, except people actually believe this.

Thanks for adding some reality.

Anonymous said...

Oh, please!

So now you want to tell me how much $ I can spend a week --- $50?

I like sushi. Are you going to mandate I can only spend $50 a week dining out on sushi?

How about Carlsberg Beer. I'm a great fan of Carlsberg since my college days meandering across Europe. It's an expensive beer by U.S. pricing standards. Am I limited to $50 a week on Carlsberg?

Get a life and stop trying to impose your ridiculously uninformed insights on people.

Middleboro Remembers said...

Oh, No, Ryan!

Mr. Anonymous is back posting same old, same old and still doesn't get IT !

Sorry, Mr. Anon!

But when you fail to attach your name, it says A LOT !

What is pretty bizarre is your comment: "...stop trying to impose your ridiculously uninformed insights on people."

NGIS, that you have surely read, indicated that for every $1 in tax revenue paid by the Industry, the cost to taxpayers - that's you and me, is $3.

NGIS also found that gambling addiction doubles within 50 miles of a casino. A Canadian study found that radius was 35 miles.

Harrah's found that 90% of their profits originated from 10% of their patrons. The industry has never denied it.

In fact, when asked about that statistic in Gardner Auditorium, Jennifer Lindler feigned ignorance.

Gary Loveman and the "propellor heads" targeted, marketed, promoted, befriended, and did what they had to to get that 10% to visit and remain loyal.

Gary Loveman is salivating to take advantage of the gullible and stupid suckers in Massachusetts.

That 10% of patrons exhaust their resources, borrow from families and friends and progress to commit crimes. They are gambling addicts without which the industry couldn't exist. (Cristina Binkley, "Winner Takes All," page 184)

It's their business model.

Uninformed? You sure won friends with that one!

A recent study indicated that 21% of American now believe the best way to achieve long-term financial security is to use state-sponsored gambling products. Casino capitalism didn't work before. It won't work now.

Most people don't gamble, so most people don't pay attention to the issue.

Many of us in Middleboro knew nothing about the predatory industry until we found ourselves as prey, denied any public discussion.

Many of us have read volumes, written volumes and spoken endlessly about the impacts that you so easily dismiss after comparing to sushi.

What many of us find particularly offensive is the prospect of community destruction because of the costs that Beacon Hill refuses to examine - public safety, increased investigation, prosecution, court costs and incarceration, costs for a regulatory agency to provide oversight, auditing, regulation and prosecution, the cost of child abandonment and domestic abuse, the cost of suicides by gambling addicts that leaves families needing services, the cost of gambling addicts who end up in public housing that you're paying for and much else.

No one has ever asked the Mass Chiefs of Police Association for input and consideration of the costs.

Who has asked the Attorney General about the costs of regulating these monsters?

New Jersey's AG employs 1500 state employees dedicated to casinos. What's the cost including pensions, benefits, healthcare, state owned vehicles, training, office space?

Do you have a problem with the Massachusetts Hack-O-Rama? This sure looks like another one.

This isn't your sushi dinner, in case you haven't noticed, unless your sushi means a regulatory agency of 1500 people.

This is being discussed, negotiated and determined behind closed doors in secret meetings by typical Beacon Hill arrogance and insulation.

Do you have a problem with that?

The CT DOR report prepared by Spectrum Gaming, an industry mouthpiece, was released last year. Have you read it?

It addresses the issues of crime, particularly embezzlement in CT.

It also discusses hot bedding and other costs.

Have you read the report that originated in Australia? Pretty interesting stuff that simply mirrors the experience in the US.

Most of this information can be found of the United to Stop Slots in Massachusetts web site.

Uninformed? Think not! You need to do some homework.

Apologies for the length, Ryan.
I don't like sushi!

Ryan said...

Anon, I'm not trying to control how much you spend. I'm just saying that if this effort to get slots legal in Massachusetts was *strictly* about recapturing Connecticut dollars and *not* about creating an industry in this state that preys off the backs of a relatively small number of regional players, the policy proposals would reflect that. Of course, they don't. This *isn't* and *has never* been about recapturing Connecticut dollars -- this is about expanding slots to addict small groups of players and devour local communities throughout the state. "Resort casinos" are the Walmarts of the entertainment and tourism sector, with the one major exception that they get to sell an addictive product. When we talk about resort casinos, we should be thinking of them as if they were Walmarts that could legally sell crack cocaine.

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