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.