Wishful thinking.
In today's Globe, we get to hear all about the largest shareholder of Suffolk Downs (it's a 6 page story!), how bad the horse racing industry is doing and why it would be such a great location for a gigantic resort casino. I mean, come on, it's only making $141 million dollars a year! Instead of hearing about whether or not counting license plates in Connecticut - I'm sorry, "patron origin analysis" - is really an accurate way to measure the money Massachusetts is "losing" to its New England neighbor, we get to hear about Hot Dog stands and how the largest shareholder of Suffolk Downs used to be a pal with the Trump (but they had a falling out). Whew, I bet Matt Viser had to work really hard coming up with the facts for that story!
When the only investigative journalism surrounding this casino issue has come out of Boston's EDGE newspaper, a real alternative's alternative paper, it's disgrace for the supposed Paper of Record to publish anything that isn't a serious look at the issue at hand. Does the Paper of Record even know how to do journalism anymore, or is it going to print whatever is emailed their way in the form of a press release? The shocking lack of any serious journalism on this issue almost makes me believe either the Globe is afraid of hitting on serious journalism, wants to validate its editorial page or its reporters can't wait for the slots and an open bar. I think I'm getting woozy here.
Sadly, if anyone was willing to read between the lines, Viser's story wasn't completely useless fluff. There was a bit toward the end that could have made for an excellent story, had the Globe been worth its weight in ink.
Part 1 of Connecting the Dots that the Globe missed:
If Fields is the engine behind Suffolk Downs, O'Donnell has provided the roadmap for navigating Boston's clubby political culture. O'Donnell, who has been one of the top shareholders at Suffolk Downs for 18 years, now is the second-largest shareholder behind Fields. He is also one of Menino's closest friends and advisers, particularly on development deals. "Joe O'Donnell is probably the most well-respected guy in the state," said state Representative Brian Wallace, a South Boston Democrat who is helping lead the effort in the House to legalize casinos. "Having him at Suffolk Downs helps them a whole bunch."Part 2:
He met with state senators, city officials, and the chief of staff for House Speaker Thomas M. Finneran. But all the meetings scheduled with Menino were canceled. The mayor says now that he doesn't remember even hearing Fields's name. "I'm not going to spend time on casinos for the city of Boston," Menino told the Globe at the time.But now that Menino's Best Bud is connected with Fields, it's a rush to the slots. There's a story there, the Globe just decided not to pursue it.
Here's another interesting blurb from the paper, one that could have been a story too. Menino's newest Casino spin is exactly like Barrow's spinmeistering.
"Look at what they're doing down in Connecticut, and how many of those cars are Massachusetts cars," Menino said in an interview last week. "Why can't we do something at Suffolk Downs?"EDGE has been the only paper to have yet called the license-plate "methodology" of counting how much money Massachusetts residents are spending in Connecticut into question. So far, that's the only way people have come up with a number, any kind of a number. There hasn't been a single story on that in the Globe yet, analyzing whether its accurate or if there are even other ways to come up with numbers. They haven't investigated Barrow or anyone who's influential surrounding this subject.
But why bother investigating such trivial matters? Casinos are obviously cash cows that save states and make it so no one ever has to pay taxes again. That's why Las Vegas, Reno and Atlanta are so well known for being safe cities, with no real problems and great public school systems. Clearly, casinos will single-handidly save Massachusetts (quite possibly by drying up even more revenue for cities and towns). Wishful thinking, again - but this time on the front page of the Boston Globe. If anyone's still getting the Globe's dead trees, it's time to cancel the subscription.
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11 comments:
I'd say you are indeed getting a bit woozy, Ryan.
In fact you are beginning to sound like a Massachusetts Republican.
Congratulations, but remember to drop your Globe subscription. That is the only message that matters to Pinch and Company.
A nit.
I wish you would be more precise with your language, Ryan. Usually, when people refer to a corporate entity as "making" "X" number of dollars, they are referring to the entity as having "X" number of dollars in profit.
It is evident from your cited Globe article that Suffolk Downs is having revenues of US$141million from wagering. That does not translate into a profit of US$141million from wagering.
--raj
True, but if they're making $141 in revenue from gambling, that doesn't count concessions, bookings, etc. - all of which likely amount to millions as well. Suffice it to say, the horse tracks may not rake in what they used to, but I doubt Fields invested his millions into Suffolk Downs if he didn't think it profitable. Furthermore, part of investing as an entreprenuer in the free market is that there is and should be considerable risk. Horse racing seems to be a passing fad; it's not this government's resonsibility to save an industry like that, especially given the negative impacts any gambling can have on society.
Irrespective of that...
True, but if they're making $141 in revenue from gambling, that doesn't count concessions, bookings, etc. - all of which likely amount to millions as well.
...the relevant figure to an investor is not revenues, but return on investment (RoI). The obvious example is grocery stores. They have huge revenues, but their RoI is not significantly different than other industries. And, they have concessions as well.
--raj
What's your point, Raj? Honestly?
I pointed out that their profits - Return on Investments, as you like to call them - are likely considerable. While I'm sure Suffolk Downs has sizable expenses, individual horse owners are responsible to pay for many of those costs out of their own pockets. Furthermore, I pointed out to you that at the very least Suffolk Downs has multiple revenue streams, which all promise very large RoIs. I don't know what Suffolk Downs brings in personally, after deducting their expenses, but as I've already illustrated it's enough that guys like Fields jumped to invest.
Finally, I don't really give a crap what it's earning. Whether it's making tens of millions in RoIs (which it probably is) or not, that's not my concern. Just because race tracks are now a failing business model doesn't mean society has to bail them out by allowing them to construct mega resort casinos which, ten or fifteen years from now, could end up as failing models too - if society swings the pendulums too.
Suffolk Downs has investors that are worth millions and taking big risks: if those risks fail, sucks for them, but I'm sure they'll get by. It's part of the risk of being entreprenuers. Maybe it's just me, but I don't think society has a duty to bail out those who've had it best, but were so stupid that they managed to lose it all. And, quite to the contrary, I doubt Fields will be in that catagory anytime soon. I just don't give a damn either way (this conversation is pointless!! who cares?!?).
I agree Ryan people who make stupid investments shouldn't be bailed out by the govt. That's why I don't want to bail out the stupid people who bought houses they couldn't afford. Let'em foreclose.
I pointed out that their profits - Return on Investments, as you like to call them - are likely considerable.
No, actually, you haven't made your case. And that was the point of my grocery store example. A high turnover (high revenues taken in) does not necessarily translate into high profit. If Suffolk Downs takes in US$141m/yr in wagering, query how much it pays out to the wagerers. SD has to pay out some substantial portion, otherwise nobody would wager there.
From what I have read, the odds in casinos in Las Vegas are stacked--in the house's favor, of course--on the order of 3-4%. That is effectively their profit from wagering, and figuring in their other expenses (rent, utilities, and so forth) it would not produce an RoI that is particularly dissimilar to RoIs of other industries.
I have an idea why Field wanted to invest in SD--he probably believed that he could make a more profitable use of the property than the then current owner. Regarding society has to bail them out by allowing them to construct mega resort casinos tell me again why society should inhibit usage of property that is (I presume) in an industrial area by its owner. And further, regarding which, ten or fifteen years from now, could end up as failing models too just to remind you, some business models fail, and some don't. Apparently, you don't recall that MA had more than a few minicomputer manufacturers along Rt 128 in the 1980s, virtually all of whom are gone. Irrespective of that, the MA state government did not try to inhibit those industries.
So, let's understand this. What is your real objection to casino gambling? That it is non-productive? Neither are the movie megaplexes in Framingham, Burlington, Chestnut Hill, etc. etc. etc. The Red Sox, Celtics, Patriots and Bruins aren't productive either.
So, what is your real objection? Is it this? Suffolk Downs has investors that are worth millions and taking big risks: if those risks fail, sucks for them, but I'm sure they'll get by. If so, you really should consider why you are so envious of the investors.
--raj
"A high turnover (high revenues taken in) does not necessarily translate into high profit."
No, Duh.
If you think people are willing to invest millions in a business model that's completely failing, with no hope but the longest of longshots that a casino could be built there, you're out of your mind.
I'm well aware of the Super Market model. You can say the same thing about chains such as Dunkin Donuts, etc. All the reason why Dunkin Donuts was bought out and taken off the public market; it wasn't earning enough RoI to please shareholders, but plenty for a privately-held entity. These are concepts that aren't altogether unfamiliar; I did get an A- in Macroeconomics =p
"If so, you really should consider why you are so envious of the investors."
Oh that's right, Raj, I'm against casinos because I'm so jealous of the casino owners. ROFL. Seriously, you should stop this line of argument before you hurt yourself. If I were concerned with exorbant wealth, I wouldn't be persuing the fields I've persued and I certainly wouldn't be spending all this time blogging (or talking to you, as dense as you're being).
But I will answer your question as to why I'm against Resort Gambling. Large casinos will:
1. Take money from other sectors of the economy.
2. Create a new tax system where those tax dollars, now redistributed to taxes from gambling, won't be going to cities and towns (per Deval's plan).
3. The state lottery will likely lose millions - money that also goes to cities and towns.
4. Resort casinos can wreak havoc on local economies, also terrible for cities and towns (noticing a theme here?).
5. Casino gambling doubles the rate of gambling addicts, to almost 5% of the total population.
Are those enough reasons for you? Have you even been reading other casino posts on my blog - or any others?
Re #4: and the effects on the locals, what about how they estimate 5,600 full-time jobs, paying on average more than $40,000 per year, being created? That's not an insignificant number.
Casino jobs will be created, local community jobs will be lost. I can't say which will be more valuable, because there hasn't been a significant nonpartisan study, though I look forward to finding out that answer one day. I have my gut instincts, of course.
yes, local jobs will be cannibalized, but I think there will still be a net gain on jobs.
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