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Tuesday, August 12, 2014

Bad Publicity is Bad Publicity for Casinos

I've seen some really bad press for casinos and their supporters over the last week or so.  There were three articles that I read that ranged from damning to depressing to describing something downright demonic.  They are rather comprehensive, so I'm not going to attempt to recap all of the points here.  They're all recommended reading.

The titles of David Frum's article in The Atlantic, A Good Way to Wreck a Local Economy: Build Casinos, and the NY Times front-page article, Albany Doubling Down as Casino Boom Fades, pretty much speak for themselves.  They serve as excellent summaries of mostly familiar arguments regarding over-saturation, problem gambling, benefits exaggerated by the developers, and the potential negative effects to host communities that the casinos gloss over.  From the Atlantic:

The impact of casinos on neighboring property values is “unambiguously negative,” according to the economists at the National Association of Realtors. Casinos don’t encourage non-gaming businesses to open nearby, because the people who most often visit casinos do not wander out to visit other shops and businesses. A casino is not like a movie theater or a sports stadium, offering a time-limited amusement. It is designed to be an all-absorbing environment that does not release its customers until they have exhausted their money.
And from the Times:
And while the new casinos are “intended to attract non-New York residents and bring downstate New Yorkers to upstate,” according to the state’s request for applications, a recent report from the state comptroller’s office warns that many players will be from nearby communities — posing the risk of an economic wash, rather than a net gain.
Casino jobs are also unlikely to lift many New Yorkers into the middle class. Federal labor statistics show that many gambling-related jobs — cashiers, cage workers, card dealers — average less than $30,000 per year. Casino industry data suggests wages are closer to $40,000. Some jobs also earn tips.
But the creepiest of the three pieces I saw is definitely the one in Vox, whose title also speaks for itself: Slot-machine science; How casinos get you to spend more money.  The source material for the piece is a 2012 book by Natasha Dow Schull, a cultural anthropologist who "spent 15 years in Las Vegas tracking the evolution of slot machines, exploring how and why they've become so addictive," entitled Addiction by Design, Machine Gambling in Las Vegas.  The book is extremely well-reviewed and sounds fascinating.  I should probably read it, so if anyone wants to buy me an early Xmas present...

Again, it's a long article that is well worth the read.  Here's a highlight or two:
The gambling industry has realized that the biggest profits come from getting people to sit at slot machines and play for hours and hours on end. (Schüll says the industry refers to this as the "Costco model" of gambling.) As such, slot machines are designed to maximize "time on device."
Modern machines now have ergonomic seats that don't cut off circulation and allow you sit for hours. Buttons and bill acceptors are placed so that they can be reached with minimal arm movement (and minimal disruption to play).....Advances in payment systems have also been crucial — players no longer have to feed coins into the machine. Bill acceptors or player cards with magnetic strips allow people to play for longer and not think about the money they're spending.
Schüll isn't convinced by industry arguments that responsibility for problem gambling belongs solely on individuals. "The whole modus operandi of the industry is to approach the human being as something that's manipulable. So I find it disingenuous that they then turn around and argue that 100 percent of the responsibility for any harm is on the person."
Here again is the link.  These companies have developed a whole new perverse science of mercilessly squeezing money out of their vulnerable gambling customers.  There's more in the article - ways to make gamblers feel like they won even as they lost.  Curved hallways without 90 degree turns so as to eliminate choice and preclude engaging the parts of their brains that make decisions.  It's chilling and perverse.  And, as somebody who celebrated the coming of Resorts World because it would generate big purses that enhance the racing and make New York competitive with the surrounding slots states, it makes me feel even worse than I already do.  It was easy for all of us to say, yeah, we need VLT's, and then you walk through the place and realize that the money isn't being manufactured out of nowhere.  Makes me think 'what have we done?'  And now, the industry in New York and the other slots states is just as addicted as the people sitting in their ergonomic chairs at the machines.  So, to me the idea of NYRA being able to stand on its own as a profitable entity is - the threat of VLT funds going away for whatever reason, be it due to politics or over-saturation, aside - important as an ethical mandate more than anything else.

 - Empire and EPR Properties, the developers of the proposed Adelaar resort at the old Concord site, are under fire for backtracking on their previously-stated intention to proceed with some form of the project whether they got a casino license or not.  They affirmed that notion fairly recently.
In March, the president of EPR told some 250 people at the public debut of Adelaar that it would still build a resort, even if the state didn't select it as one of the maximum two Hudson Valley/Catskills casinos.  (Adelaar) will still proceed "in some manner, but it won't be as compelling," said David Brain, noting his company had already invested hundreds of millions of dollars in the project. [Times Herald-Record, limited free access]
I find this to be a pretty interesting situation.  It's easy of course to point the finger at Empire/EPR, and say they pulled a bait and switch in order to garner the necessary local support resolutions that they need.  As the Herald-Record pointed out in an editorial: "These were the plans and the promise long before the state started on this latest plan to license casinos." The precedent is certainly there - they told the Monticello horsemen that they would relocate the harness track at the Concord, but now a track is nowhere in sight.

However, Empire's statement came after, and apparently in reaction to, some comments that were made last Wednesday by Mitchell Etess, the CEO of Mohegan Sun, hoping to get a license for a casino on the portion of the Concord property owned by Louis Cappelli.  He suggested that the two projects could compliment one another if they got a license and Adelaar did not.
At Wednesday night's presentation of his project, Mitchell Etess said that Mohegan Sun guests could use Adelaar's Monster golf course and proposed water park — both of which were featured prominently on a poster of the projects.

"They're going to build anyway," said Etess.
Well, once Etess said that, he essentially made the amenities at Adelaar part of his proposal; indeed, as one of his selling points.  I think that Empire/EPR really had no choice then but to clarify that they won't build without a license, even if they really were still planning to. "To be clear, development of Adelaar's Water Park and redesign of the Monster Golf Course is contingent upon Empire Resorts obtaining a Class III license." They just about had to say that; and they can conveniently blame the state for including Orange County.  I wonder if Etess was being clever; whether he knowingly backed his rival into that corner.

 - Tuxedo is floating a trial balloon of Genting's proposed casino.  Literally.
The Town of Tuxedo will conduct a balloon test Aug. 14 and 15 to approximate the height of the proposed Sterling Forest Resort and to determine from which areas the casino would be visible.  The project, proposed by Genting Americas, would be built on a 240-acre lot and would include 75 structures. The largest building would be a seven-story hotel, which would rise to a height of 122 feet with additional 104 feet of spires and ornamentation. [Times Herald Record, limited free access]