Truth or Consequences:
casino dreams, casino reality
By Anna Geronimo Hausmann
Scenes from Detroit’s MGM Grand Detroit Casino.
Photos courtesy of the MGM Grand.
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Milwaukee has a brand new Native American casino
and bingo hall with table games and eight hundred slot machines in a former industrial area adjacent to its downtown. |
So, the question now is which of these scenarios is realized once a casino is up and running in a city? One thing we can do is to look at communities that have gone down this road before us to learn how the advent of a casino has changed their urban landscape. When the dust has settled on the pros and cons, when the fierce arguments have given way to the bright lights and jangling slots, what is life like once the doors open? What is a casino’s impact on a city’s psyche? How far do its affects infiltrate into the daily lives of residents? Do the promised benefits outweigh the feared negatives?
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One thing that did become crystal clear to me is that the benefits and negatives of casinos in a city are relative to scale. In a much larger city, a casino can be just one more attraction and its effects are diluted. In a small city like Buffalo, those effects are more like the little girl in the children’s rhyme: when they are good, they are very, very good and when they are bad, they are horrid.
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Casino Boogie
Here’s a bulletin from Hallwalls Contemporary Arts Center, which has chosen the timely theme of casino gambling for their upcoming Member’s Exhibition, held Jan. 12-Feb. 1: As those who have participated in the past know, the annual Hallwalls Members Exhibition is a non-juried exhibition open to all current members of Hallwalls. For the 2002 edition, a specific topical theme is proposed: Casino Boogie. Members are encouraged to consider and comment upon the encroaching specter of casino gambling in Western New York. Though perhaps “encroaching” is a serious misnomer—according to the August 26th edition of The Buffalo News, residents of New York State spent approximately 7.5 billion dollars, dreaming impossible dreams in every possible way, from lotteries to horse racing to Native casinos to bingo. Gambling is already right here, right now. However, the last several months have seen considerable debate over the development of a downtown casino in Buffalo. So, do we build it because there’s a handy metro line to ferry the masses to a gaping pit into which they can throw their money? Do we build it because government is unable to devise any more effective ways to raise money? Do we build it to feed a compulsion as old as mankind? Do we build it because Niagara Falls is just too far to go? Or do we build it because there are so many churches in Buffalo, we need more sin to level off Western New York’s ratio of good vs. evil? It is a big, civic question with no easy answers. As we note, gambling is already here. Does it become a question of degrees? How much gambling do we tolerate? And if we were going to tolerate the sin of gambling, why not a red light district that tolerates the sins of vice? And as topical as the theme of Casino Boogie is, there are deeper reverberations to the idea. It is proposed to you that, in artmaking, you are rolling the tumbling dice each and every time you create or present your work. Is the compulsion to gamble so different from the compulsion to create? Isn’t there similar risk involved? If you produce a work of art and take it anywhere out in the world, is this not a roll of the die, the hoarse cry of “C’mon seven!” reverberating from the pit of your stomach? Are you not unrepentant gamblers, one and all? Please discuss. -quoted from the November, 2001 Hallwalls calendar Regardless of whether any of these deep questions are actually addressed, the opening reception of the Casino Boogie Members’ Exhibition—like all of the yearly Hallwalls’ Members’ Exhibitions—is a sure bet for a great time. January 12, 9-11 p.m., Hallwalls, 2495 Main Street (TriMain Center). Scenes from Detroit’s MGM Grand Detroit Casino. Photos courtesy of the MGM Grand. |
The example of Detroit, our southwestern neighbor on Lake Erie, is especially instructive for a number of reasons. For one thing, Detroit only began to think seriously about casinos after the hugely successful Casino Windsor opened just over the border in Canada. In fact, city voters four times rejected referenda allowing casinos before finally approving one in 1994, four months after the opening of Casino Windsor. Just like Buffalonians, Detroit residents watched with jaws agape while their dollars streamed over the border and Casino Windsor began ringing up more than $300 million in revenue per year. They debated all the same issues we in Buffalo have been struggling with—people are gambling anyway, at least we would get some revenue from a casino, at least we would get some jobs out of it. Finally, the first of what would be three privately owned casinos in downtown Detroit opened in July 1999. Now the three, the MGM Grand Detroit Casino, Motorcity Casino, and Greektown Casino, collectively take in around $850 million per year—an enormous sum, when you consider that Casino Windsor is holding its own at roughly $300 million per year.
To be sure, there are differences between the situation we face here in Buffalo and the one in Detroit. We will not have three downtown casinos and they won’t be privately owned ventures generating tax revenue. In addition, Detroit, with around a million residents, is more than three times the size of Buffalo and as such has more in the way of economic opportunities. It is a more diverse and broad-based economy with more corporate headquarters and capital. Still, as an aging manufacturing city afflicted with white flight and a relatively decrepit downtown, the similarities are significant enough to make the comparison relevant for what we will face, should casinos become a reality for Buffalo.
On the surface, you’d think that the advent of casinos in Detroit would make a huge difference in the city. Three enormous casinos opened in the city in the space of one year. They collectively attract 60,000 people each day to the city and added eight thousand new jobs to the area. They are pumping roughly ten percent of their take into the city’s coffers in the form of tax revenue—approximately $85 million per year. How could this not make a huge difference?
But according to most observers and officials, their impact on the city is minimal at best. Of the jobs created, Yvette Monet, public relations manager for the MGM Grand, says that as part of their deal with the city MGM agreed to hire Detroit residents and that currently 54% of their workers are city residents. Tina Lam, a reporter for the Detroit Free Press who has written extensively on the casinos since their openings, notes that in a city of one million people eight thousand jobs is a drop in a bucket. And though the salaries paid by the casinos are slightly higher than in other industries, they are only marginally so, ranging from $6 per hour plus tips to $13 per hour without tips. In fact, one effect of these new jobs has been that it is harder to find workers in industries such as nursing homes where workers have shifted over to work at the casinos. In terms of jobs, “it’s pretty much a wash,” says Lam.
As for the second main economic argument for casinos, that they generate dollars for local businesses, the reality is somewhat mixed. One big positive of the Detroit agreement is that it obligates the casinos to utilize Detroit and minority vendors for at least thirty percent of their goods and services. Monet notes that in 2000 the MGM Grand spent more than $50 million with Detroit vendors, a not inconsiderable sum, though, again, the issue here is scale, $50 million spent in the community out of the more than $300 million in revenue.
But as for the argument that casinos draw from out of the area and are a boon to local restaurants, theaters, hotels, and other attractions, it is nearly impossible to get any hard figures. The Detroit Metro Conventions and Visitors Bureau did a study of casino visitors in December of 2000, just prior to the opening of Detroit’s third casino, Greektown. That study shows that eighty percent of the visitors to the casinos came from the metro Detroit area. Even Yvette Monet at the casino admits, “if you walk through the parking garage, you’ll see all Michigan license plates.”
The CVB study shows that overnighters spent roughly $10 million in Detroit area hotels, though it also shows that sixty percent of that was spent on suburban hotels, likely because the casinos have not yet built their permanent homes, which, when completed, will have hotels attached. Those new hotels will add 800 new rooms to Detroit’s downtown, which, according to Michelle Fusco, spokesperson for the CVB, will likely impact on convention bookings. “Right now, the casinos don’t really have much of an effect on conventions; casinos are way down on the list for meeting planners. They care much more about numbers of hotel rooms close to the convention center. When (the casinos) build their hotels, that will impact bookings.”
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The Milwaukee Riverwalk, cited by some city
officials as a revitalization effort with more vision than gaming-related initiatives, has generated 200 million in accompanying development. |
Karen Schrock, of Adult Well Being Services, a not-for-profit social services agency catering to the needs of seniors, agrees. “Analyses have shown that our casinos draw locally,” she notes. “Without a hotel attached, they are certainly catering to the local area.” Schrock points out that relying on locals causes the additional problem of targeting seniors. “Our primary concern is that seniors are targeted because they have time and money. We see coupons in the paper all the time, three dollars gets you a ride to the casino and lunch. That’s very attractive for isolated seniors.”
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Patricia Ellis, public relations manager for the Detroit United Way, notes that each of the casinos has played a major role in the United Way’s annual campaigns since their openings. She characterizes the casinos as “good community partners in many ways.” Yvette Monet points out that the MGM has donated more than one million dollars to more than seventy local charities since their opening in July of 1999. But if you consider they’ve pulled in more than $750 million in that time and donated less than one half of one percent to charity, the philanthropic image fades. I’m not sure I’d call that being an great corporate citizen.
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So, essentially, the casino money is just making up for state money. In fact, having an efficient revenue generating engine like casinos has not insulated Detroit from the effects of the recent economic downturn. In October 2001, then Detroit mayor Dennis Archer announced that the city was facing a $50 million dollar deficit for the current fiscal year, largely due to decreased income tax revenues. Layoffs and reductions in services were announced to offset the deficit. As Tina Lam puts it, “(the casinos) are not a drain, but they’re not making a difference, either.”
If casinos aren’t making a difference, one is really left with the question, why bother with them? Why go through all these moral and ethical and economic contortions so a few people can make some money?
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A situation with even more resonance for Buffalo exists in Milwaukee where the once-aging but recently revitalized city of 500,000 has a brand new Native American casino and bingo hall with table games and eight hundred slot machines in a former industrial area adjacent to its downtown. Although the bingo hall existed with only a handful of slots for more than a decade, it was the Potawatomi tribe’s $120 million expansion, which opened just over a year ago, that has made the most impact—and ruffled the most feathers. Because, as in Detroit, Milwaukee’s casino isn’t making a huge difference in that community.
Prior to the opening of the expanded Potawatomi casino in November 2000, casino advocates trotted out all the usual rosy scenarios for its impact on the city. Mary Denis, vice president of tourism, sales, and marketing for the Greater Milwaukee Conventions and Visitors Bureau, predicted in an article in the Milwaukee Business Journal, “We think (the casino) will be a demand generator that will be key to the overall Milwaukee tourism product.” Denis outlined plans to partner with the casino in marketing campaigns targeting meeting planners, and tour operators. The article also detailed Potawatomi plans to work with hotels in the Milwaukee area, creating special deals including coupons for the casino. At that time, hotel and business owners in Milwaukee had high hopes for the casino’s spinoff effect. Pat Donelly, chairman of the Hotel and Motel Association, told the Business Journal, “I think there’s going to be some positive impact for all the hotels.”
One year is, of course, not much time to gauge that impact, but so far, according to the Convention and Visitors Bureau, things don’t quite seem to be working out that way. When I asked Vanessa Welter, director of public relations for the Bureau, how those hopeful predictions were panning out, she emphasized the casino as one among many attractions. “The casino has been a wonderful addition to Milwaukee’s already outstanding nightlife,” she said, “It’s a whole new entertainment venue, a kind of ‘Las Vegas in Milwaukee’.” Welter noted that the casino is a draw for group tours and events, but conceded that these are by and large “day-trippers,” that is, people within driving distance coming for the day or evening.
In fact, though the casino boasts three million “visitors” per year, those numbers are a bit misleading. According to Linda Sowell, public relations manager for the Potawatomi Casino, three million is essentially a turnstile number, the number of people passing through the gates, and it certainly could include repeat customers. Of that three million, Sowell says, roughly 60% come from within a fifty mile radius of Milwaukee with another 30% coming from the Northern Illinois area, a two hour drive away.
In terms of direct economic contribution to the city, the Potawatomi casino, like the ones in Detroit, has been a bit underwhelming. In 1999, the Potawatomi tribe signed a five year compact with the state of Wisconsin stipulating that the casino pay in lieu of taxes a minimum of $6 million to the state, $3.3 million to the city and $3.6 to the county per year. In addition, the tribe pays property taxes on all non-trust lands it acquired, which includes ten acres adjacent to the casino, and federal, state, and payroll taxes. The compact also stipulates the creation of the Forest County Potawatomi Community Foundation into which the tribe must donate a minimum of $3 million per year, which then goes to local charities, focusing on economic development and youth programs in the downtown Milwaukee area. In 2000, for instance, the tribe donated $4.6 million to this fund. Finally, the tribe must give $27 million to the Indian Community School, a local private school for Native American children.
According to Robin Magill, public relations director of the Milwaukee United Way, the Potawatomi have been excellent community partners. “They contribute directly to many of our member organizations from their Foundation and they have been very, very supportive,” she says. But while their contributions to charity are indisputable, it is unclear whether the $3.3 million that the city receives makes much of a dent in a city budget of just over a billion dollars. Like Detroit, Milwaukee is beginning to feel some of the effects of the nationwide economic slide and the proposed budget for 2002 includes pay freezes for managers, higher garbage fees, and (get this, folks!) a new snowplowing fee.
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Under Norquist’s leadership Milwaukee has developed a downtown plan based on a walkable grid that integrates arts and entertainment, theaters, and mixed use residential, retail, and office space—all the things that people value in an urban lifestyle. Filmanowicz points to the city’s riverwalk as an example. A working river, the Milwaukee River used to face the backs of buildings and parking lots with chain-link fences. Working with landowners, the city acquired public right of way along the river to create a riverwalk that stretches through the downtown are north to residential and south to festival grounds and the Lake Michigan. Since they began building it in 1994, the riverwalk district has generated $200 million in new development with old buildings turned into loft condos, new residential, restaurants, retail, and office space. Property values in the district have increased by thirty percent, more than $100 million. Now the river faces restaurants, storefronts, and droves of people.
Filmanowicz suggests that initiatives such as these have had more of an impact in revitalizing Milwaukee than the expanded casino. “Casinos are pretty much self-contained with their own concert halls and restaurants inside them,” he explains. “Most urban attractions, like the riverwalk, are designed to interact with one another. They work together. A casino doesn’t function as a catalyst in that way.” Essentially, he says, though the casino is an impressive building and attracts big acts to the performance hall, “it’s just one more attraction.”
A predatory business
These are only two examples of the dozens of areas throughout the country with casinos, but these two clearly demonstrate that having a casino in your community is a mixed blessing at best. The hoped for bonanza just doesn’t seem materialize while the human toll is undeniable. While neither Detroit nor Milwaukee has experienced the feared increases in gambling’s nastier side effects—crime, prostitution, pawn shops—there are marked increases in compulsive gambling.
Virginia Pieroni, who runs the Problem Gambling Program for Neighborhood Service Organization, a not-for-profit agency in Detroit, says that gambling addictions will always be a problem for communities with casinos. “It’s an ongoing problem and it’s not going to go away,” she says. “It’s a legal activity, but for a certain segment of the population, generally gauged at around five percent, it’s going to be a pathological, addictive, and therefore problematic activity.”
There is a lot of anecdotal evidence of people losing their homes, their cars, their pensions. In Detroit, there have been three deaths related to gambling in the casinos since their openings in mid-1999, one an off-duty police officer who shot himself at the blackjack table after losing thousands of dollars.
Part of the law allowing casinos in Detroit stipulated that the state would fund a statewide twenty-four hour gambling hotline and gambling treatment programs run by Neighborhood Service Organization. Social service agencies in both cities stress that prevention and treatment programs are an important part of bringing gambling to your community. Says Pieroni, “There’s a community responsibility, and we’re fortunate in Michigan to have the state-funded programs that we do.”
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Jobs. Savings. Homes. Lives. It’s a high price to pay just to get a couple thousand more just-over-minimum wage jobs in your community. If everything else is a wash, the few million dollars added to the city’s general fund, the few thousand new jobs, is it worth opening your community’s doors to such a predatory business?
The hard facts are, these promises of economic spinoff, increased tourism, bringing people from outside the region to stay in our hotels and eat in our restaurants and go to shows at Shea’s, are just that, only promises. The possibilities of a windfall are so much slimmer than the casino advocates would have you believe. It all depends on how diverse your community is already, how many other development projects you can generate, how much synergy you can get going.
So, once we take the idea that a casino is a windfall off the table, what other arguments are left for putting one in our downtown? It took me only a few days to come up with more than enough evidence from other cities to convince me that these promises are pretty empty. The governor must have much smarter and more resourceful researchers in his office—so how come he’s still peddling these pie-in-the-sky schemes? That’s what I want to know.
Anna Geronimo Hausmann is a frequent contributor to Buffalo Spree and teaches writing at the University at Buffalo.
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