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Dicey Propositions

Local casino opponents view the region’s casino bids as a bad bet with hidden costs

by Ann Morrow on May 30, 2014 · 2 comments


“Casino gambling has literally become America’s new national pastime, with higher attendance than professional baseball, football, and every other professional sport combined,” said Bob Steele, the keynote speaker at an anti-casinos forum held last week in Albany. A former congressman from Connecticut, Steele is a noted authority on the impacts of gambling casinos, and is the author of a critically praised book on the subject titled The Curse: Big-Time Gambling’s Seduction of a Small New England Town. Steele spoke at length about what Albany and other communities can expect if they are selected to be the site of a casino complex when the locations are decided for upstate casinos this fall.

Bob Steele photographed by Ann Morrow

Based on his experiences as a representative and resident of southern Connecticut, home of two of the earliest and largest casinos in the country, Steele cautioned that those expectations are considerably less beneficial than the outlooks presented by the various developers and operators vying for a chance to open similar casinos in Albany, East Greenbush, Rensselaer, or Schenectady. Steele described casinos as a predatory industry that depends on problem gamblers for its huge revenues, and that its effects cause a range of social ills, from pathological gambling addiction to bankruptcies among local businesses and increases in crime.

As result of the two casinos in his former district, Foxwoods and Mohegan Sun, the area became known as the “embezzlement capital of America” due to a 400-percent rise in arrests for embezzlement, along with a spike in home foreclosures, a drop in property values, and a rise in residents seeking treatment for gambling addiction and its attendant woes such as divorce and family dysfunction.

The No Casinos Town Hall forum, held at the First Unitarian Universalist Society in downtown Albany on Thursday (May 21), was presented by Occupy Albany, Bethlehem Community Voices, and No Casinos in the Capital District, an informational effort by Stephen Hayford that began as a Facebook page to counteract the “slanted and manipulative ballot language” of Proposition One, which amended the state constitution to allow gambling casinos last November.

“The purpose of the Facebook page was to create a free and accessible information resource for local efforts to prevent casino development in the Capital District,” said Hayford, an attorney from Albany who lives in Watervliet. “Casinos promote addiction and damage communities. They get governments involved in a predatory enterprise that often fails to yield the fiscal benefits it promises.”

Local presentations and advertising by casino prospects have centered on bringing jobs and revenue to the region. But as Steele described at the Town Hall, those jobs will mostly be low-paying service jobs, and the anticipated tax revenue is likely to plummet after the initial novelty of the casinos wears off. Meanwhile the industry will continue to act as a regressive tax, appealing to low-income customers, including senior citizens, much more so than to “whales”—the term for well-funded big spenders who can afford to lose big.

“These ‘destination casinos’ for out-of-towners are really ‘convenience casinos’ for nearby neighborhoods,” said Steele of the upstate New York bids. “While high-rollers will continue to travel to glamorous destinations like Las Vegas, how many of them are going to travel to Albany or Schenectady?”

Still, as many public officials concede, it’s hard to argue against an industry with the potential to bring in jobs and generate revenue. To the Thursday town hall’s audience of about 100, Steele asked, “How closely have your public officials looked at the downside of what happened in Connecticut, and more importantly, what is happening recently?”

Steele’s cautionary tale from Connecticut described how in the early 1990s, Foxwoods Resorts and Mohegan Sun were the first casinos in the Northeast outside of Atlantic City, and with no other competition, they drew half their customers from out-of-state, creating 20,000 jobs and sending hundreds of millions of dollars to the state treasury. This boom time is often used to convince other communities—including those in New York—of the economic value of casinos. However, Steele continued, the good times stopped rolling when the two casinos began facing competition from newer casinos in nearby states. There are now about 1,000 casinos in 39 states, and as more of them opened, revenues plummeted, full-time jobs became part-time jobs, and today, both Foxwoods Resort and Mohegan Sun are heavily in debt and have downsized their staffs.

Massachusetts is in the process of selecting sites for four new casinos. New Jersey has plans to build casinos in the Meadowlands. New York already has eight Indian casinos, and plans for more electronic slot racinos in addition to possibly as many as seven new casinos across the state.

An especially spectacular example of the failure of more-is-more in the casino industry is the Revel Casino in Atlantic City. The opulent, billion-dollar, 42-story complex went into bankruptcy less than a year after opening. Instead of filling the coffers of New Jersey, the Revel required a $260 million bail-out from the state, while obliterating over a billion dollars in outside investment. Casino revenue in Atlantic City is down 40-percent overall, with an estimated job loss of over 14,000.

Despite billions in shared slot machine revenue over the last 20 years, Connecticut today, Steele said, is in the worst financial shape of its history, with the highest debt and unfounded liabilities of any state. “Casinos did little to encourage spin-off businesses in the community,” Steele added.

What hasn’t diminished, he said, is a pervasive casino culture that skewed the local economy, with pawn shops replacing popular restaurants as one example. And so the state is doing what many states are doing: seeking to replace lost revenue by promoting more and more casinos, further cannibalizing the existing customer base and local businesses, and “leaving residents with less money to spend on other goods and services,” Steele said. “Casino customers tend to stay within the casinos for meals and drinks and shows, and when they are through, they fill up their tanks at casino gas stations and drive home.”

“It’s hard to believe your experiences here will be any different than ours,” Steele added. also

Stephen Hayford, Bob Steele, Dan Plaat and Pam Skripak, photographed by Ann Morrow

Albany’s casino bid is also being touted as a destination casino. Dubbed “E23” for its proximity to Exit 23 of the NYS Thruway, the $300-million-plus complex has plans for indoor and outdoor horseback riding rings and a large-scale water park. A partnership between the Capital District Off-Track Betting Corp and Rochester-based developer David Flaum, who has been the focus of allegations regarding improper lobbying (Flaum has donated $400,000 to local and state political campaign funds), the casino is promising to create 1,800 jobs and, according to the Albany Business Review, generate over $11 million in yearly taxes.

These numbers, however, don’t take into account some of the information garnered by a new, non-partisan study out of New York City by the Council on Casinos called “31 Evidence-Based Propositions From the Health and Social Sciences,” including an estimate that 30- to 60-percent of regular casino customers have gambling-addiction issues. The study also examines how modern slot machines differ from the one-armed bandits of the past; sophisticated, computerized new slot machines are designed to get people to play as long as possible and to lose as much money as possible. That casinos can double the rates of gambling addiction within a ten-mile radius is not disputed by the industry.

Casinos have also been found to reduce volunteerism, civic participation, and family stability, and other social values that are at the heart of a community. “Over time, nobody wins,” Steele said.

“It gave me the specifics to form my own judgment,” said Gloria Desole from Albany of the Town Hall presentation. “I was surprised by the eventual devastation of casinos.”

“I don’t see a casino being safe for children in a residential neighborhood,” said Joanne Kathleen Farrell, who lives near a proposed casino site on the waterfront Rensselaer and is the mother of a 17-year-old. She also mentioned her concerns about street crime.

The Albany Common Council vote on casino resolution is scheduled for June 30, with decisions on siting expected in the fall. Councilwoman Cathy Fahey spoke at the town hall meeting, and encouraged attendees to contact their representatives to voice their opinion. “This is not a done deal,” she said.


UPDATE: In paragraph 2, “North Greenbush” has been corrected to “East Greenbush.”