“Job Creation” by Casinos not a Net Boon

“ JOB  CREATION ”  BY CASINOS  MAY NOT BE A  BOON  FOR THE COMMUNITY

"School Buses in the Fall"   found on  flickr  commons

Building a new casino complex opens job lines in the locality.  This is often trumpeted  as “job creation.”  Job creation is widely desired at a national level.  On a local or regional level, however, it may be more job substitution.  Persons newly hired at the casino complex will often have quit another job nearby for what they hope will be better conditions.  In a rural area a new casino complex will abruptly have hundreds more openings than there are ready able and willing workers in the community.  It will have to import staff, many of whom have left their jobs elsewhere.   The check list below refers to a medium-sized non-tribal casino complex in a mostly rural area.  Opening and filling job titles novel to  a community is not necessarily  True job creation, widely desired at a national level,   is not necessarily a net benefit to the community or county .

YES MAYBE N0
Construction jobs building  casino complex   ●
New construction or renovation outside casino complex    ●
Local skilled unionized work force enough for construction
Non-resident skilled workers needed for construction  ●
Most new job lines can be filled by local unemployed
Most new lines can be filled by local people who switch jobs
Some local workers will switch job to casino complex  ●
All casino job lines can be filled by local residents
Interest in hiring disabled persons  ●
sales local gas stations  ●
sales local stores and restaurants  ●
Net in total property tax roll due to devalued businesses    ●
Casino employees in rental housing will pay school taxes  ●
Casino will pay  school taxes
School  budget  overall  definitely bettered by casino  ●
Existing stock of rental housing for casino employees good    ●
 County-wide unemployment definitely decreasedOpinions in this piece are those of the writer, Stephen Q. Shafer MD, MA,MPH and are not necessarily shared by any or all members of CAGNY.  Photo of schoolbuses in the fall from flickr commons 5111493374_ca620e7837schoolbuses  ●

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Five Arguments against Legalizing Casinos in NY

 

The Great Seal of the Sate of New York

The Great Seal of the State of New York

Five current arguments about legalizing non-tribal casinos in New York State in the light of the keystone estimate for casino revenues shown in bold below. 

52% of revenues at the average casino are from problem or pathological gamblers. (Grinols and Omorow 16  J. Law and Commerce 1996-97 p. 59)  Together, these types of gamblers are 4% of adults,  about 7%  of casino  clients.

 PRO: Would send new revenue to Albany without raising tax rates.

CON: Half that revenue would have been diverted, to their lasting harm,   from the families and associates of addicted and problem gamblers, or would be proceeds of outright crime. 

CON: If quantifiable social costs are considered,  raising $1  via tax on casinos costs the private  sector twice what it costs to gain that $1 by a step-up  in a conventional tax rate.  (*Grinols pp. 180-181)

 PRO: All or nearly all that revenue would be dedicated to “education.”

CON: Simply allows $$ that would have gone to education to be spent elsewhere in state budget. 

CON: Creates a pretext for annual increases. Who’s against “more money for education?”

 PRO: Would be regulated to cut out underworld and instructed to “prevent problem gambling.”

CON: See keystone estimate.  Casinos get 50 % of revenues from < 7 % of clients.  Steering those clients into lasting recovery and halting their replacement would ↓↓ high profit margins.  What for-profit business wants to cooperate in drying up the 7% of customers that leave half its take ?   No business.

CON: Promoting “responsible gaming” is a sham.   Seriously-affected gamblers seldom benefit by government-sponsored treatment programs until terrible damage has come to them and those close to them.  

 PRO: “Creates jobs.”

CON: May hurt other businesses by taking workers from them (“cannibalization” ).

CON: Importing workers can burden host community (housing stock, schools).

 PRO: “Economic development”

CON:  Increased local cash throughput  (does not equal)  economic development.

CON:  Local property taxes promised by casinos economic development.

Then what is economic development ?  “The creation of greater value by society from its available resources”  (*Grinols p. 57) 

*footnotes refer to Gambling in America: Costs and Benefits by Earl L. Grinols (Cambridge University  Press, 2004). Earl Grinols is Distinguished Professor of Economics at Baylor University.

 The opinions in this piece are those of the author, Stephen Q. Shafer MD MPH and are not  necessarily shared by any or all members of CAGNY.  Permission is hereby granted to quote from this piece at any length if the source is cited using the permalink.

 

“Sorry, So Sorry”

quickDraw_playcard 

 

 

 

 A real-life narrative about Quick Draw

 

 

 

 

 

 

In describing certain measures the  nascent  Responsible Play Partnership proposes to police gambling by under-age persons, the RPP states  tamely “violations could result in fines, suspensions or revocation of an entity’s license.”  The verb is “could,” not even “may,”  much less “will.”   The url for the press release about the RPP is shown below. http://www.gaming.ny.gov/pdf/press_022013.pdf 

     The following true story instances  a  shocking lack of  oversight  circa 2002-2008 of the  lucrative New York State Lottery “game” Quick Draw in one small city.  It could be entitled “ ‘Regulation’  In Action;”   alternatively,  “Regulation  Inaction.”  Considering that legislation is pending as of March 2013 to relax rules about Quick Draw,  more stories like this – if not quite as infamous – may be expected unless regulatory policy can get out of the conditional mood.

 

Summary: a Quick Draw addict with unfettered access to his stepdaughter’s earned fortune gambled away a large part of it “playing” at a favorite bar.  The local  newspaper  investigated how the bar’s owner  could have permitted this abuse of trust to run  for years. The owner then  surrendered the QD license. This ended official enquiry.   Three years later he told the Lottery Licensing authorities that the newspaper had maligned him for political purposes.  The license was restored without investigation.

 

      From mid-1998 well into 2002 the Speak Easy Bar at 557 Pearl St. Watertown NY had an habitué who played Quick Draw there  over and over and over – and over.  A real estate agent, he was locally famous as the stepfather of a high-paid supermodel who had grown up in Watertown.  Not everyone in town, however,  knew he had induced her in 1998 to have him replace the outside financial manager she had recently taken on.  

     In 2002, after four years of near-daily multi-hour “play” the Quick Draw aficionado started to bounce checks.  According to the local  newspaper, instead of warning him to stop playing or (within their rights) prosecuting him, the owners of the Speak Easy Bar and of other Quick Draw locales in town borrowed money from their friends to let him keep “playing”  until he could cover the bad checks. They of course were profiting from his losses.  In fact the owner of the Speak Easy had received a “Top Agent Award”  from Lottery in 2001.

     In January 2003 the Quick Draw addict told his stepdaughter that he had been using her money to “play” and had lost a lot of it.   He was prosecuted for writing bad checks.  When he pled guilty to that charge and others in October 2004, his stepdaughter’s  losses 1998-2002 were estimated in documents submitted to the court at 7 million dollars, nearly all of her assets.  In early 2005 the  stepfather was sentenced to prison. After the newspaper ran a story on the bar-owner’s role in enabling the stepfather’s addiction and consequent abuse of entrusted funds, the bar owner “opted to surrender” his Quick Draw license as of March 2005.  This ended  investigation by Lottery. 

     In May 2005, the model brought suit against her stepfather and the bar owner.  After more than a year, the latter was removed as a party.  Later, he changed the name of the bar  and applied to get the Quick Draw license back.

     Writing in  2007  to the Licensing Director of the NY Lottery, the owner of the Speak Easy Bar said that all published charges of his enabling the  gambler’s addiction after bad checks began were false.   His letter, published in the Watertown Daily Times of May 18 stated  “I cut him off  [from Quick Draw at the Speak Easy].”  He did add a sort of apology (quoted below) which implies in the passive voice that someone had failed in a duty to “cut off service.”   This contradicts his assertion that he had refused to allow the habitué to continue Quick Draw at his establishment.

 “Clearly there is a lot to be learned from such an incident, including the need to impose restraint on customers in the same way we would cut off service of alcohol to the obviously compulsive drinker.  There is also a need for those who sell tickets not to get caught up in playing such games.  I understand that. “ 

After no investigation Quick Draw was re-installed at 557 Pearl Street  in early May 2008.  Just ask in town for “The Mayor’s Bar.”

Notes: For a description of keno (the generic name of  Quick Draw) go to http://preview.tinyurl.com/awf3yvb

The opinions in this post are those of the writer, Stephen Q. Shafer MD MPH, and are not necessariy shared by any or all other members of CAGNY.  Permission is given here to quote from this piece at any length as long as the source is made clear using the permalink address above. 

 

Risks to Self and to Others: Where is the Line?

The Marshalsea Debtors' Prison, image from google

Gambling is the only personal behavior with high potential for harm to self and others actively encouraged  by civil government.  Why the anomaly?   Revenue

Most Americans say government  should  not legislate  behavior  any more than speech.  Risky or self-destructive actions  internal to an individual  are personal  freedoms when  they don’t infringe  on the rights or the welfare  of others.  That line, however,  is hard to define.  

Some smokers chafe at laws to ban smoking in indoor public places.  There, sensitivities  more than cancer-causing potential of second-hand smoke are detriments to others.  No laws limit smoking in a home with young children,  though  beating and starving are prohibited.  Inference: society considers domestic second-hand smoke relatively low-hazard.

Take  money. Most people say that government should not decree what individuals may do with funds to which they have access  (not necessarily  really theirs).  By this philosophy,  there should be no laws that one cannot literally burn money,  or spend it on valueless objects, or run up credit card debt or take out loans with no intent to repay.   There aren’t.  Even when others (close or remote) lose by these behaviors,  society  allows them. Inference: society considers wasting someone else’s money tough luck for that someone.

Recently I  heard  this  “personal freedoms”  theme from a friend about  legalized  gambling.   My first response was to point out that active pathological and problem gamblers always abuse others around them, psychologically and fiscally.  No problem gambler is an island.   Those in recovery have always left  mayhem behind.   Even if launched with millions,  like ex-Mayor Maureen O’Connor,  they will all if active  go broke eventually and start taking from others who trust them.  My friend is too conservative  or  too libertarian   to be swayed by the harm-to-others  case as I put it. 

He could not, however, refute the observation that no laws are made on purpose to encourage behaviors like heavy smoking around children at home.  In contrast, changing laws to expand gambling so the state gets money from it encourages gambling. Addiction and Problem Gambling follow in too many people, despite “preventive” nostrums.  

My friend acknowledged  that in legalizing  gambling  government  is not making irksome laws to curb personal  behavior.  Quite the reverse.   By licensing gambling  to get revenue (via lottery or tax on casino),  government actually legislates  in favor of  personal behaviors some of which are bound to hurt trusted others.  Those who say “legalized” gambling  entitles  anyone  to use available  money any way  he or she wants  deplore  a ban such as New York  has on non-tribal casinos.  A ban, though, is to buffer gamblers and innocents around them, not to draw them in, not to exploit them.   In granting license for gambling to raise revenue,  government becomes an exploiter.    This is plain wrong. 

 

Note : The picture (from Google.com) shows the Marshalsea  in 19th C. London.  Charles Dickens knew this prison well. His father, though not a gambler,  was usually  in debt.  Debtors were locked up, unable to earn money, until someone else sprang them.

The opinions in this post are those of the writer, Stephen Q. Shafer MD MPH.  They do not necessarily reflect opinions of any or all other members of CAGNY.  Permission is granted for reproduction in whole or in part as long as the source is acknowledged with the permalink above.

No Place for Casinos

Dawn over Hudson River 12/25/2010DIGITAL CAMERA

 

 

 

 

 

 

     Every week CAGNY (courtesy of our anti-gambling allies  at NYCF) distributes a one-page handout to the offices of all legislators.  In the  bulletin to legislators of March 5 (posted last week on this site as “Central Statistic”), we stated that it is the practice of the casino cartel, which gets  35-50%  of  its profits from out-of-control gamblers,  to foster  irresponsible gambling while pretending not to.  To learn how the fostering is done, read Addiction by Design (Natasha Schull, 2012, Princeton University Press). 

     This post, which will be the  CAGNY bulletin for March 12,   is not on that crucial topic.  It is  about the façade that gambling promoters (private and governmental) put up to look sincere and caring. Part of the act is token sums for research (e.g. to National Center for Responsible Gaming); also for secondary* and tertiary**  prevention to  good, small  advocacy agencies like the National Council on Problem Gambling.  [Most tertiary prevention in this country is provided by GA and Gam-Anon, both all-volunteer organizations.  Neither accepts any outside support. ]

     In New York State most of the meager (near-zero, now) funding to prevent problem gambling has come from legislative appropriations to agencies like Office of Alcoholism and Substance Abuse Services (OASAS).   Lottery and tribal casinos don’t contribute directly to statewide treatment and prevention. 

     If the constitution gets amended,  a legislator will surely  ask on behalf of OASAS and the NYS Council on Problem Gambling that some money coming  to the state from the new casinos go to “treatment and prevention of problem gambling.”   Likely some would, at least for a while.  How much, who knows?  Consider, though, that the revenues projected from casinos for 2016 have a much nobler-sounding destiny than treating gambling addicts.  They are supposed to be 90% “to support education”  and 10% to relieve property tax burdens.  If legislators must choose between allocating (say) $5M of the projected $150M  to counseling for problem gamblers or to “education,”  the addicts and their families will lose.  They always have.  Massachusetts announces intent to spend more than any other state. http://preview.tinyurl.com/ckkhy8p  Good luck, Bay State!

     Even if a huge revenue stream dedicated forever to treatment and prevention of problem gambling could be legislated, it would still be too little and too late to undo the mayhem of gambling. When do addicts enter treatment if not compelled by a judge?  When  they’ve  lost  everything.  Lives can be improved by treatment of  problem  gambling, but the clock does not run backwards.

     The best prevention of problem gambling is primary  prevention . A practical facet of this is an ecological strategy — no new casinos.  We have too many “slots”  now.  Vote  NAY on second passage.

     * This writer defines secondary prevention as keeping someone experienced in gambling who is not yet a problem gambler from turning into one (e.g. “Responsible Gaming” education, HOPEline signs). **Tertiary prevention is defined as steps (e.g. private counseling with or without 12-step program) to begin and sustain recovery from situations that meet at least some criteria for pathological or problem gambling.

    The opinions in this post are those of the writer,  Stephen Q. Shafer MD MPH,  and do not necessarily reflect those of any or all members of CAGNY. Permission is granted to reproduce in whole or part while acknowledging the source using the permalink above.