FACTS














Economic Impact

Here's sobering news for those who think casinos would jump-start the local economies: "Even using conservative estimates of costs and generous estimates of benefits, we still find the costs exceed the benefits." (Casinos and Crime, 5/11/06)

 

ARE CASINOS GOOD FOR THE LOCAL ECONOMY?

Some have said a casino is good for the economy of a town. It is hard to see how this has been the case for three casino towns in Oregon, all of whom have had casinos since 1995.

In 2000, Florence - without a casino - had a lower unemployment rate and fewer
families living below the poverty level. Since 1990, Florence - without a casino -
has consistently experienced higher population growth rates than any of the three Oregon casino towns surveyed. (Census Comparison of Oregon Casino Towns)



  • OREGON IMPACTS

  • "The opening of the casino has now caused a drop of over 69% of the (Elks) Lodge income from video machines, keno, scratch-it, etc. And a lesser amount from the dining room." The members of the Florence Elks lodge support the Casey Eye Clinic, Meadowood Speech and Hearing Camp by Children, scholarships, The Elks National Foundation, local Food Share and many other charitable activities. (January 2008, The Elks Spike, Florence B.P.O.E. Lodge #1858)

  • Elma Magkamit, the former West Linn finance director who stole $1.4 million from the city to support a gambling habit ... As a result of the thefts, the city's bond rating tanked -- making it more expensive for West Linn to borrow money. ... She used most of the money she stole to play the video poker and slot machines -- which Boise called "the crack cocaine" of gambling -- at Spirit Mountain Casino. (11/18/06 - Oregon embezzler sentence: 8 years) Magkamit gambled away much of the stolen money, according to investigators. The missing money is equivalent to about 14 percent of West Linn's annual $10.1 million operating budget, officials said. Magkamit resigned last year after four years as West Linn finance director. She had worked for Clackamas County since 1994. (4/28/06, http://www.kgw.com)
  • We've estimated that even a small casino such as that in Florence, Oregon creates a cost to taxpayers of at least $6.3 million per year. Another way of looking at the situation: Taxpayers are subsidizing the operation of this casino to the tune of $6.3 million per year. (Taxes lost from casino in Florence, Oregon)

  • The former Shilo (Lincoln City, Oregon) property owned by the casino resort collected $421,038 in transient room tax revenue in 2003, approximately 18 percent of the city's total transient room tax revenues that year, the letter said. For the 2004-05 property tax year, which ends June 30, the city anticipates receiving a total of $49,104 in general fund revenues from the former Shilo Inn property, based on the city's property tax rate of $4.0996 per $1,000 of assessed value, as well as $4,868 from bond fund revenues to pay the capital costs of public infrastructure projects. From four other tax lots owned by the resort and not in trust, the city expects a total of $106,990 of urban renewal fund revenue. Thomas expressed concern in the letter that losing all this tax money if the properties go into trust would have a "negative impact" on the city's urban renewal program. "The loss of tax revenues over time becomes crippling, unless the tribe makes payments to the city to help ameliorate the effect of the lost tax revenues," (Lincoln City Comments on Casino Tribe Property Purchase, 4/27/05) (Casino - putting property in trust, eroding tax base, 04/21/06)

  • (Regarding Seven Feathers Casino in Canyonville, Oregon) "While there are differing opinions on whether there are more vehicles on the town's streets than in the past, there's been a definite decline of foot traffic along the four-block business district. Occasional log trucks still rumble past vacant storefronts and businesses with "for sale" signs along Main Street en route to distant sawmills. " "From an economic standpoint, it has surprised me that it hasn't had more impact," says Roger Shafer, 59, a government and economics teacher at Canyonville Christian Academy, which was started by his grandfather 80 years ago. "I thought it would impact the local businesses more, but the impact has been negligible even to somewhat negative. My impression is that you have a lot of people that come to Seven Feathers (casino) and that's that. Canyonville is not a destination." (12/29/04, Mail Tribune, Jackson County, Oregon)

  • "Host" to the Seven Feathers Casinos, Canyonville lost its medical clinic in 2005. "Mercy Medical Center plans to close its Canyonville health clinic on Jan. 1. Hospital officials said the clinic has consistently lost money, including $66,000 since July 1. The Roseburg hospital's board of directors said Mercy's financial troubles stem from declining revenue because of cuts in state funding, and the hospital's increasing debt and free-care costs. The clinic, which opened in 1991, has averaged about 10,000 visits per year, or between 700 and 850 visits per month." (11/17/04, Money woes lead hospital to close clinic, Register Guard, Eugene, Oregon)

  • Many have questioned the true value of a casino to the casino tribe. One Oregon casino reportedly made a $64 million net profit in 2002 - yet the casino tribe which owns that casino was still eligible for over $17 million in federal aid. Many have asked, "If casinos are such a great financial boon to casino tribes, why are all casino tribes in Oregon still receiving federal subsidies?" Casinos were promoted in communities as vehicles whereby tribes could gain "self sufficiency." However, even after almost 10 years of operation, ALL casino tribes in Oregon still receive millions of dollars of federal funding each year. (Federal Funding for Oregon Casino Tribes) (Also see NPR interview below, "Indian reservations without gambling see rising incomes")

  • One can surmise the true cost to a community by the agreements which were negotiated between a casino in North Bend, Oregon and another in Lincoln City, Oregon, and their intended "hosts". (Siletz Casino Tribe agreement with City of Lincoln City) (Coquille Casino Tribe agreement with City of North Bend)

  • Casino-subsidized business cannibalizes local businesses. How can local gift shops and restaurants compete with similar non-taxed, non-regulated casino-subsidized business which offers: "... the slots will notify players when they've racked up enough for a free gift. The machines will even talk: "Welcome, Bob. How are you doing? Would you like a free meal at the buffet?" (Article re: plans for casino in Florence, Register Guard newspaper, 4/2/04)

  • The Florence Community had plans for a hotel across the street from the Florence Events Center. The city council believes that this development must occur for the center to succeed. The city council asked the tribes to not develop a hotel because of this. Now that there are plans for a casino-subsidized hotel and 1,000 seat theater, the FEC's survival is greatly jeopardized.

  • Documents filed in U.S. Bankruptcy Court indicate that Timothy G. Rose (Florence casino developer) was President and Director of Windsor Woodmont Black Hawk Resort Corporation in Colorado - which filed for bankruptcy protection under Chapter 11 on November 7, 2002. ( 2004 U.S. Bankruptcy Court, District of Colorado)

  • The Oregon Liquor Control Commission, Oregon's hard-liquor monopoly, sells alcohol to bars and restaurants at markups ranging from 103 percent to 108 percent. Casinos in Oregon pay only a 5 percent markup. The OLCC's justification for putting Oregon's non-casino businesses to such a huge competitive disadvantage? In return for the cheap liquor, the casinos agree to abide by state liquor laws -- such as not serving under-age children alcohol.(PACT Research - OLCC Subsidy to Casinos)
NATIONAL IMPACTS
  • Atlantic City, after three decades of having casinos, was described by the Economist as a place where "multi-million dollar casinos are steps away from crime-ridden neighborhoods. A quarter of the 40,000 residents live below the poverty line." The Associated Press described it a year ago as a place where "A stone's throw from the glittering, billion-dollar casinos, thousands of people live in grinding poverty in rundown houses surrounded by drugs and prostitutes. These are the neighborhoods that the state requires casinos to help by setting aside a portion of their revenue for development projects." It was exposed last year that the state allowed the casinos to take a significant portion of money that was supposedly meant to clean up such neighborhoods and funnel it back in their own projects. The New York Times wrote, "Atlantic City continues to grapple with blocks of dilapidated buildings and seamy motels that draw drug dealers and prostitutes, all within the shadows of towering, brightly lighted casinos." (3/4/08 - The ills casinos bring)

  • Foxwoods and Mohegan Sun each roll in an estimated $1 billion dollar a year, tax free. Despite all their riches, the federal government continues to pay them millions in grants. (2/26/08, Millions in taxpayer funds go to casino tribes)

  • NY - ... it’s hard to see much of a spillover effect if you walk outside the casino two blocks in any direction, where houses are boarded up and businesses are struggling to survive. ... The blocks north of the casino are marked by boarded-up storefronts. A row of vacant buildings on Niagara Street sits in front of houses with crumbling porches, broken windows and condemned signs. To the east of the casino, weeds grow tall along the emptied pools and winding slides of a splash park built mostly with federal funds in the 1980s. For the better part of a decade, aside from a brief reopening in the summer of 2005, the park has lain dormant in an expanse of concrete parking lots. A block away, a vacant Nabisco plant towers over an empty, fenced-off parking lot. The building — and more than 100 acres of land to the east - are owned by a private company, Niagara Falls Redevelopment. The firm came to the city a decade ago with grand plans to rebuild downtown that banked on a casino being located in the city. It has pieced together parcels of land and razed derelict structures, but in the five years the Senecas have run a Falls casino, NFR has yet to build anything but a cement foundation. (Casino no jackpot for neighborhood, 12/29/07)

  • In addition to the public safety concerns, Floridians should consider the impact widespread casino gambling would have on one of our most valuable commodities - family-friendly tourism. Wider legalized casino gambling in our state would drastically change the nature of Florida's tourism market. It could give many parents second thoughts about bringing their children to our state for a family vacation. ... The potential for revenue enhancement has been cited as an appealing benefit to the expansion of gambling, but Floridians should consider the cost of doing so. For every dollar gambling would bring in, research shows three more dollars are spent on increased social costs for criminal justice and social welfare.
    (10/4/07, The Statistics are Sobering , Bill McCollum, Attorney General, Tallahassee, Florida)

  • A 2007 survey of casinos in other states was raising serious doubts about the high expectations gambling supporters have voiced about the economic spinoff from casinos. A wide-ranging survey by New York Times reporter Gary Rivlin, published Sept. 22, showed that the American Indian tribes with casinos in Connecticut and other states have invested little in the states where they are located. Indeed, after a few failures, such as the ferry-building business in which Foxwoods’ Mashantucket Pequots invested, the report found, the tribes are sticking to casinos, “scouring the nation” for new gambling opportunities. (Report raises doubts about casino spinoff claims, 10/15/07)

  • A 2007 Kansas study shows a regional casino in Sedgwick Co. would have a negative $1.4 billion impact on the local region over a 20-year period, when benefits are compared to costs. Furthermore, the casino would drain $176 million from retail businesses in Sedgwick County, Ks. (June 2007, Fiscal and Economic Impact of Casino)

  • When casinos rise up on Indian lands, traffic increases, infrastructure is strained and a battle begins over who should pay for the fallout. But not much of the money from visitors trickles down to the county, DiVeronica says. "They park their cars in the Oneida parking lot, gamble their money away and drive back out to where they came from," he says. "They do very little shopping, and they do very little tourism." Large casino developments affect traffic, air quality, water, sewage, property and sales taxes and more." (Feature: Tribes, Governing Magazine, August 2007)

  • The New Jersey city is often used as a shining example by casino developers. But after 29 years of casinos - invited originally to 'revitalize' the town - Atlantic City is still not a desirable place to live. "It’s still a dump."
    ...     the town still grapples with blocks of dilapidated buildings and seamy motels that draw drug dealers and prostitutes within the shadows of towering, brightly lit casinos.
    ... Crime in the city is about three times the US average, and the murder rate is twice the national average
    ...     recent census figures show that nearly 24 per cent of the city’s population lives under the poverty line
    ... pawn shops, where compulsive gamblers desperately swap their worldly goods for cash, are a common sight
    ... While profits pour into the casinos, restaurants and bars struggle to compete with the cut-price hotel rooms, free drinks and food used to lure in punters.
    ... Violent crime is nearly four times the national average in Atlantic City
    ... “People come looking for work but they don’t realise they will be drug tested and their background checked. “If they don’t get work, they simply end up on the streets. When the first casinos opened we’d have 50 people every night sleeping at the mission. Now we have 350. (A warning to Manchester, 2/1/07)

  • "People on their way to casinos don't stop and buy coffee," Simon points out. "People on their way to casinos don't stop for anything. They go to the casinos. On their way out they don't buy anything either because they don't have any money." During the first half of the 20th century, Atlantic City was the nation's most popular middle-class resort--the home of the famed Boardwalk, the Miss America Pageant, and the board game Monopoly. Today the city doesn't have a single movie theater and its one supermarket is a virtual fortress protected by metal detectors and security guards... (States want something for nothing, 6/17/06)
  • An analysis prepared for opponents of a proposed 5,000 slot machine Indian casino in the city of San Pablo concluded that the casino would result in a regional economic loss of $138 million a year, not taking into consideration social, public health, or safety costs. Money lost to the local economy, which would otherwise have been spent on local goods and services, was estimated to have a multiplier effect on the regional economy resulting in 7,219 jobs lost (compared to an estimated 2,000 employed at the casino). (6/2/06 - Casino Report released by California Attorney General)

  • Here's sobering news for those who think casinos would jump-start the local economies: "Even using conservative estimates of costs and generous estimates of benefits, we still find the costs exceed the benefits." (Casinos and Crime, 5/11/06)

  • "We found no evidence that a casino has ever been a stimulant or a catalyst for the revitalization of any neighborhood," Mr. Ford said. (Pittsburgh City Planning Director, Pat Ford, comments to City Council, 5/22/06)

  • "I'm convinced casino gambling is a significant factor in the tremendous increase we've seen in bankruptcy cases." Carl Bucki, U.S. Bankruptcy Court judge ."There's no question in my mind," Bucki said. "After handling thousands of bankruptcy cases, I'm convinced casino gambling is a significant factor in the tremendous increase we've seen in bankruptcy cases."
    (Hidden costs of gambling, 4/17/06)

  • Every dollar coming into the city from the casino will come from someone else's misfortunes. We are forfeiting sales tax and real estate tax receipts for casino revenue funded by people's losses, and then paying higher social costs also. The primary functions of a city are to provide basic safety needs (such as police and fire) and basic utility needs (such as water and sewer). A city's secondary functions include economic development and creating an environment for growth. It is important for the city to be involved in secondary functions, but never at the expense of the primary functions. (Grand Forks Pastors' Group opposes casino 2/27/06)

  • Local communities can often be impacted twice - first by the erosion of their revenue base to which tribal businesses are generally exempt, and second when faced with increased municipal costs for local law enforcement to respond to increased traffic and crime. These communities are generally powerless to stop new tribal casinos from establishing a casino once a tribe has been recognized and has land in trust. Reforms in the tribal recognition process and tribal gambling operations would empower communities and provide an opportunity for Congress to look at the unintended consequences of IGRA and address the gaping loopholes in the law. (Rep. Wolf asks President for moratorium on tribal casinos, 1/12/06)

  • California County Impact Analysis - There is no standard reporting format, some costs are annual, some are one-time. In every case reported, the costs to the county outweigh any reimbursement received from the casino. See the full report for details. (Testimony before Committee on Indian Affairs, U.S. Senate, of Solano County Supervisor, Duane Kromm, Attachment C, 2/1/06)
    • Amador County - law enforcement, courts, roads - $7,332,572
    • Butte County - transportation, law enforcement, fire - $376,500
    • Imperial County - roads, solid waste - $20,100,000
    • Kings County - roads, fire - $4,440,700
    • San Bernardino County (existing casino)- transportation, fire, law enforcement, courts, infrastructure, social services - $2,366,884
    • San Bernardino County (proposed casino #1) - fire, law enforcement - $731,000
    • San Bernardino County (proposed casino #2) - law enforcement - $130,000
    • Santa Barbara County - transportation, transit, roads, law enforcement, fire, housing, air quality, outdoor recreational - $7,876,275
    • Yolo County - law enforcement, courts, land and recreation, roads, general government, health and human services, other - $5,270,733
  • After 59 years in business, restaurant can't compete with casino. There are many reasons, say Bob, Chuck and Ron Caniglia, but the major one is this: They can't compete with the Iowa casinos. "It's not the food," Chuck said, with evident pride in the family recipes that have made the restaurant an Omaha institution. "That entertainment dollar they take is the key." (Omaha Institution to close its doors. 7/11/05)

  • Gambling addiction rates doubled in the 35-mile zone surrounding casinos, with an average cost to society each year of $13,586 per affected individual for lost wages, counseling, crime and other social problems. (Gambling is a social failure 3/8/05)

  • "While some Indian tribes have benefited from the passage of IGRA, local communities in which casinos have been built have been profoundly impacted. The quality of life in many local communities forced to host casino operations has seriously eroded, despite in many cases passive tribal contributions to the state coffers.""The strain Indian casinos place on the surrounding communities is tremendous. For non-Indian casinos, it is estimated that for every dollar a community collects from gambling taxes, it must spend three dollars to cover new expenses, including police, infrastructure repairs, social welfare and counseling services. Because local communities cannot tax Indian operations, the strain is even more acute." (Guy Martin, International Municipal Lawyers' Association, 2003)

  • And where does gambling revenue come from? Overall, it's not the casual gambler who keeps the money flowing. About 80 percent of the money comes from 10 percent of the gamblers -- the people betting the grocery money and the mortgage because they are addicted. All that "free" money coming into the state will soon enough get recycled into social programs and welfare to pick up the pieces of broken homes and broken lives. ("The costs of new casinos far outweigh any benefit" Star Tribune, David M. Strom, President, Taxpayers League of Minnesota)

  • Casino developers almost universally justify their predatory practices with claims that tribes "need" gambling to raise their standard of living - claims which fall short of the facts. A recent National Public Radio interview describes results of a study done by Joseph Kalt (co-director of the Harvard Project on American Indian Economic Development): "Using census data, he (Kalt) found that tribes with gambling operations showed a 36-percent increase in incomes between 1990 and 2000. But Kalt says what he didn't expect was that the non-gaming tribes saw almost as big a jump--30 percent." "So much attention has been put on the gaming tribes, I think the people forget that hundreds of American Indian reservations--the tribal governments have decided not to have gaming. And those tribes are also on average growing very, very rapidly." ("Indian reservations without gambling see rising incomes", All Things Considered, National Public Radio, 1/31/05)

  • " ... New York Assemblyman Sam Hoyt (D-Buffalo, " Casino gambling is not a means to economic prosperity. Niagara Falls was a struggling city when the casino was built, and it's in even worse condition now." (1/11/05 - NY Gaming Group)

  • Española Mayor Richard Lucero said gaming is taking its toll on the community. The city spends $500,000 a year responding to emergencies at Santa Clara's Big Rock Casino because it is located within city limits. (1/7/05, Albuquerque Journal, Dark side of gambling)

  • A recent economic impact study found that the "total fiscal loss" to Marysville (caused by nearby casino) - lost taxes and additional public service costs - will hit $2.1 million in 2006 and grow to $5 million by 2016. (Spokesman Review, Washington, 8/30/04)

  • "Counties that legalized casinos ... suffered individual bankruptcy rates more than 100% higher than counties that remained “casinoless." (03/12/04 - Impact of Casino Gambling on Bankruptcy Rates: A County Level Analysis)

  • ... you may find that local shoppers will avoid the high traffic area created around the casino contributing to the decline in local business and economy. Then comes the decrease in residential property value. Residential homes on main road or alternate roads leading to casinos tend to decrease in value 10 percent. Making it harder to sell and reducing the tax basis for the area. (Casino Impact on the Town of North Stonington, CT)

  • The strain Indian casinos place on the surrounding communities is tremendous. For non-Indian casinos, it is estimated that for every dollar a community collects from gambling taxes, it must spend three dollars to cover new expenses, including police, infrastructure repairs, social welfare and counseling services. Because local communities cannot tax Indian operations, the strain is even more acute. (The Impact of the Indian Gaming Regulatory Act on Gambling in the United States and the Role for State and Local Governments, 68th Annual Conference, International Municipal Lawyers' Association, 10/13/03)

  • $1 worth of casino profits costs taxpayers at least $1.90 in cost creating activities such as crime, suicide, bankruptcy and other expensive social problems. (Earl L. Grinols and David B. Mustard, "Business Profitability versus Social Profitability")

  • "In 1998, Americans spent more money on gambling (approx. $50 billion) than on recorded music, theme parks, video games, spectator sports, and movie tickets combined ($39.9 billion)". (National Gambling Impact Study Commission Final Report)

  • "... the character of towns surrounding Connecticut's two casinos 'has been irreversibly changed . . . property values near the casinos and on the roads leading to them have declined and other types of economic development have been stymied.'" (5/25/04 - Providence Journal, RI, )

  • "... the town of Preston, Conn., saw -- as the casinos developed -- its medical emergency calls increase from 204 in 1988 to 955 in 1996." (5/25/04, Providence Journal, RI, )

  • The large number of "low-wage casino workers," Hines said, has resulted in a severe shortage of affordable housing, with workers "hot bunking" -- sleeping in the same shared bed at different times by working different shifts. (5/25/04 - Providence Journal, RI)

  • The supplier that sold $1,000,000 worth of carpet to a huge casino on a tribal reservation cannot sue in the courts of the US when the casino refuses to pay the bill. Any action would have to be brought in a tribal court, where chances of success would be small. The risk, as can be seen, is enormous. (Doing business, Laworld, Dec. 2003)
  

 

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