Thursday, June 24, 2004

Connecticut Casino Reality vs. Rhode Island Casino Promises

Richard A. Hines of the Advisory Board of Citizens Concerned About Casino Gambling has a piece in today's ProJo comparing the reality of casino's in Connecticut with the promise of one in Rhode Island.
Two assertions by casino promoters -- that Connecticut's treasury is being enriched by the millions of dollars gambled away at Foxwoods and Mohegan Sun and that residents and businesses in the communities that host these casinos are happy to have them -- fail under even the most cursory examination.

The 25-percent tax on slot-machine revenue imposed by Connecticut -- the percentage that Harrah's wants to pay in Rhode Island -- brings Connecticut about $400 million a year. This sounds like a lot of money compared with the $200 million Rhode Island collects from its 60-percent tax on video slot machines in Lincoln and Newport.

But on a per-capita basis, Rhode Island actually collects more from Lincoln Park and Newport Grand than Connecticut collects from Foxwoods and Mohegan Sun. Per-capita revenue from these sources in Rhode Island is $186, compared with only $115 in Connecticut.
So if gambling revenue is the objective, we're already doing 60 percent better than Connecticut. This should end the argument that we're losing out on millions of gambling dollars flowing out of state.
Now, perhaps some won't buy this sort of per-capita breakdown and prefer to deal in whole numbers. That's fine, but, to me anyway, the social costs have always outweighed any purported financial "gains" that a gambling casino would bring to the state. Hines further explains that the Conneticut communities that host the casinos have seen "increased traffic, demand for emergency services, crime, and need for affordable housing, schools and other municipal services have driven public expenditures far higher than any increased revenue from the casino taxes" and he provides figures to support his claims. (I note that he doesn't make apparent all of his sources for these figures, though many appear to be from various State of Connecticut studies.) Some of the more alarming examples he cites include the fact that
State Police Troop E, responsible for the areas including Foxwoods and Mohegan Sun, must contend with the highest drunken-driving rate in the state. North Stonington has closed two houses of prostitution. Ledyard reported a 300-percent increase in its crime rate during 1990-98, at the same time that the New London-area crime rate dropped more than 10 percent.
The communities aren't making any money on the deal, either.
Yearly expenditures by the 21 towns in New London County jumped by $58 million more than they would have without the casinos, reported the Southeastern Connecticut Council of Governments. These costs, offset by only $14 million from a state fund maintained by slot-machine revenues, were necessary to educate the casino workers' children, to deal with increased traffic, and to provide other municipal services. Increased taxes and debt made up the difference between the extra $58 million cost and the $14 million received from state taxes on the casinos.
Oh yes, and about all of those jobs that a casino creates?
The jobs created by casinos -- and touted by Harrah's and its lobbyists as a benefit to Rhode Island -- are mostly low-wage service jobs, which put an extra burden on communities that lack housing that the workers can afford. To accommodate the Connecticut casino workers, single-family residences have been converted into multi-family units -- resulting in a near epidemic of housing-code violations and "hot bunking," in which casino employees working different shifts share beds.
Sounds like a real high quality life, huh? These jobs are fine, for college kids, but I wouldn't say that one should aspire for this to be their ultimate career goal, would you? Perhaps worse is the increase in gambling addiction in the state, particulary among those who can least afford it.
Some 52 percent of the people phoning the Helpline of the Connecticut Council on Problem Gambling in 2002 earned less than $32,000 a year but had losses of more than $23,000 a year -- with an average lifetime loss of $115,000. The University of Connecticut Health Center found that problem gamblers who can ill afford it spend an average of $2,000 a month. Their troubles, the study reported, spill into their families, affecting the lives of 8 to 10 other people.
Does this sound like the kind of "economic development" we want in out state? Casinos are a quick fix that aren't a fix at all. To me, they are not worth the money just based on the social costs. Apparently, not all agree, and the General Assembly, despite confusion over the exact nature of the casino legislation they just passed and the noise being made by GTECH that their interest wasn't protected in the new bill, is going to put the question on the ballot for the voters to decide. The Governor seems to be against this and has threatened to veto the measure. Despite my opposition to gambling in Rhode Island, I would have to say that he should just let the measure come to a vote. I understand his reluctance, but this is one of those situations where the voters should be able to voice their opinion. Ultimately, the citizens of this state will get what they want, and I fear that, consequences be damned, a casino in Rhode Island is on the horizon.

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