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Saturday, July 13, 2013

On Casino Politics and Ethics

Interesting article online at the Times the other day about Ellenville, NY, one of the towns up in the Catskills with a site vying for a casino. The Nevele was once a booming resort there, and a group is trying to revive it as a gambling palace.  Already bills itself as The Nevele Resort, Casino, and Spa.

I'm rather surprised to see that they link to the article (which will appear - perhaps a longer version - in the print edition of the Sunday Magazine section) because it's mostly skeptical.

Chad Cotti, an economist at the University of Connecticut, who has studied the effects of legalizing gambling in numerous counties, found that [pro- and anti-casino groups] overstate their cases. Cotti told me about two significant observations he made from his data. When a casino was built in a rural area with little employment, there would usually be a sudden spike in jobs, partly because casinos tend to have more workers per guest than other forms of recreation, like movie theaters or ball parks. But those jobs were unlikely to lead to ancillary businesses that could lift the prospects of the greater economy. At the same time, placing casinos in remote areas seemed to increase the number of fatal car crashes. “It’s not that people drink more at casinos,” he said. “It’s that the miles driven after drinking is so much higher.” These two effects — more jobs and more crashes — create something of an economic riddle. To lower instances of drunken driving, it would make sense to put casinos closer to dense population centers. But casinos in big cities have no noticeable impact on overall employment. They don’t add jobs, they just switch around the jobs that already exist.
The Nevele’s developers project 1,600 new jobs once the casino is running, in around 2016. That would represent around 1 percent of the work force of Ulster County. And unlike a new factory, which can encourage subsidiary investment from suppliers, an isolated casino, Cotti’s research has shown, has virtually no multiplier effect. [New York Times]
State Senator John Bonacic, the Republican Chairman of the Committee on Racing, Gaming and Wagering, was in the Catskills area this past week trying to rally support for the referendum.
"It's critical for us in upstate, in the Catskills, to get the vote out," Bonacic said, noting that the major roadblock may come from New York City, where the mayor's race is likely to be the most hotly contested November election. []
Therein lies the twisted politics and ethics of the upcoming vote.  Voters here in the city will not be affected either way by the outcome of the referendum for seven years (or so we're told).  Personally, I'm dead set against it, both as a racing aficionado who sees the competition as a threat, and as one who believes that states shouldn't be balancing budgets on the backs of problem gamblers.  However, I know someone with a place in Ellenville and have been there, and I feel for the people. As the Times piece reports, it's a depressing place. People there need jobs, and they need them now.  So, who am I, down here in the city, to determine their fate?

It's not something I take lightly; don't want to be cruel towards communities that have been begging for casinos to try and help them out of their morass for years. Decades even. Then again, I look at Ozone Park, and we see what the Aqueduct racino has done for that community. Not a hell of a lot.


steve in nc said...

Building the facility will create jobs in the short term, but the key observation on long-term impact is that casinos shift jobs around, rather than creating them.

Unless you're adding value, as with a factory, or operating something that will buy lots of things which spur production in other sectors, you're just taking money people would spend somewhere else, so there shouldn't be net job creation in the wider economy.

And since profits are funneled into one owner/ownership group that is probably already wealthy, likely money will be siphoned out of the NYS economy to foreign places as with Genting, be put into the market to help build another bubble, used to buy luxury items built elsewhere, or to invest in real estate, driving up rents and home prices, which hurts working people.

The best way to create jobs is to put money directly into the hands of the people who spend the highest percentage of their income - paycheck-to-paycheck folks. Businesses can then be built selling them more things.

Most of the other "job creation" rhetoric about giving money to businesses, whether through tax cuts or aid, whether in casinos sales or political campaigns, is false advertising.

jk said...

AEG is the gift which keeps on giving.

As the state evaluated the billion-dollar proposals for the Aqueduct Racetrack racino in 2009, principals for the shadiest bidder gave thousands to a political committee controlled by Assembly Speaker Sheldon Silver — money that nobody today can account for.

And months later, just before that scandal-plagued bidder was picked, Silver solicited “campaign dough” from Hank Sheinkopf, a friend who was lobbying for the company, the Aqueduct Entertainment Group.