Can We Really Gamble Our Way To Prosperity
The Rhode Island Senate has approved a measure that would add the Newport Grand to an upcoming November ballot asking voters if Twin River should be allowed to add table games such as blackjack and poker. Passage in the House is expected.
Add to the many good reasons for resisting casino expansion in Rhode Island this one — casinos around the country are struggling to stay in the black. We may be reaching critical mass in a zero sum game and the customers are aging out and not being replaced. According to the March 18th New York Times “Foxwoods Is Fighting for Its Life,”
Millions of younger Americans who like to gamble are playing online poker, hosted on offshore sites. They may never become casino habitués. So at the same time that brick-and-mortar casinos are proliferating, the demographics may be working against the industry. The A.G.A. [American Gaming Association] is lobbying for legalization of online poker in the United States and for strict regulation of it — a rare case of an industry’s seeking regulation. The strategy would likely put those who already own casinos in a favored position in the new online world.
The big buzzword in the business right now is “cannibalization.” It refers, in this context, to casinos’ gobbling up one anothers’ customers, which for some of them may be the only route to survival.
So how bad is it? Foxwoods is $2.3 billion in the hole. (Continued after the jump.)
Las Vegas revenues “still lag far behind 2007 levels” and the city can expect further competition from the several California casinos in the pipeline. (The Las Vegas unemployment rate is 12.7 percent.) Atlantic City has been clobbered by the Pennsylvania casinos, “casino revenue is down 37 percent since 2006 . . . at least four casinos have been in bankruptcy.”
One letter to the Times editor last week put it so simply — “A casino is an economic “win” for a region only if most gamblers come from elsewhere. If most come from nearby — as is now common, with casinos in so many places — then as one gambling scholar said, “You simply cannot grow an economy by taking money out of it.” You drain local wallets while shifting the tax burden to the lower-income folks who are hurt most by their losses.”