Wednesday, March 10, 2010

What Casinos Do to Local Businesses

This was a great write-up about what a casino would do to Downtown Worcester and other Downtown areas like it, written by the founder and exec director of The Hanover Theatre, which is largely seen as the spark that gave Downtown Worcester a rebirth in recent years.
Today, The Hanover Theatre, and other wonderful venues like it, face a critical threat from resort casinos. The performance venues that are an integral part of the casinos will almost certainly deal a fatal blow to The Hanover Theatre if they are placed anywhere in Massachusetts, save possibly the far western edge of the state.

What’s the threat? First, because of radius restrictions, we will lose to casinos our top headline performers — such as B.B. King, Aretha Franklin, David Copperfield, Bill Cosby, Miranda Lambert, Ian Anderson, Mandy Patinkin and many, many more. We already have evidence of this, as we have been prevented by Connecticut casinos from booking Jerry Seinfeld, Jackson Browne, Denis Leary and other popular icons.
The writers also note that they'd be hit just as hard with their Broadway shows, which would also be banned by the radius restrictions.

But, of course, the problems don't stop with the theatre.

It is ironic that the case being made for resort casinos in Massachusetts is based on the economic benefit they will purportedly create, when so much evidence points to exactly the opposite effect. The casino’s business model is built around keeping people from leaving the building. No windows, no clocks, nothing to remind gamblers that there’s anywhere they might want to be other than at the blackjack table or slot machine. How can we possibly believe that this model will bring one dollar to the economic activity of the surrounding area?
The writers correctly note that, unlike with local businesses, any revenue the casinos bring in will go right out the door again to the casino's national and international investors. With local businesses, the profits each business earns ends up being spent locally, which essentially means those profits are recycled and spread around. They also note that any jobs that will be "created" will have represented jobs that were destroyed in the local economy. There is no net growth -- in fact, there's almost certainly a net loss. Just think about it: if the average restaurant, pub or club has a 2-5% profit margin at the end of the year, but most businesses in the area lose 5-20% of their profits to the casino, that means all those businesses are wiped out, with fewer jobs, revenues and choices for the surrounding economy.

They make that point in real terms.
We urge you not to be distracted by all of the noise about casino gambling in Massachusetts and do your own research. Look at New London, Conn., where more than 30 restaurants closed following the opening of Foxwoods and Mohegan Sun. Look at Cripple Creek, Colo., whose once-thriving downtown went from 66 restaurants to less than 10.
When we ask our state politicians to help make economic policy for our state, we need them to do the research and look for ways that help local communities, that help create net growth -- and aren't just rabid attempts to go after a few headlines, or succumb to the powerful and well-oiled lobbies powering the push for slots year in and year out.


Mark Belanger said...

Whenever I think of a casino in Fall River, I think of what it might do to the Narrow Center - my all-time favourite live music venue.

Every penny that goes into the casino is discretionary money that will not be spent at the Narrows, your theatre, restaurants, and so on.

I know that pro-casino people read that statement and go "yeah, yeah, blah, blah" but it's true and it will hurt local businesses.

No question about it.

Anonymous said...

Just wondering what your thoughts are on what effect sales taxes have on business. Specifically what effect does a sales tax on alchohol have on border communities like Methuen? My guess is that people drive 2 miles North and avoid the tax.

Ryan said...

The sales tax was not my first choice at all, but I do think we generally overestimate the amount of people willing to hop across the border.

In some areas, there are tolls that would cost more than the tax, but in all areas, it's more expensive in terms of gas and in terms of time, with a major expense in the opportunity cost of what you could have spent if you didn't take that trip to NH to save a couple cents on the dollar.

For a few people *right* on the border, it may make a difference, but probably not enough to offset the needs of that extra revenue... even if that's not at all where I would have picked to get that revenue.

Anonymous said...

Cut the hacks and get rid of the patronage. Until then the Dems are screwed.

Anonymous said...

I'm not sure where you get your numbers or information from on the local effect of casinos. Atlantic City had a 40,000 population before the casinos came in. The town was dying. The casinos now employ more than 50,000 people.

I was in Cripple Creek the year before casinos. I was a ghost town. There couldn't of been 15-20 stores open and most had few customers. State law dictated that casinos could only be opened in existing structures, so most of the restaurants and hotels sold out to the casinos.

Anonymous said...

Why do liberals want to tell everyone how to live their lives when their own lives are pretty fucked up. Tax the rich you say. Well I say get a fuckin job and start contributing instead of bitching.

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