Yes, casinos hurt local businesses

The Boston Globe’s Jenifer McKim today reports that Robert Goodman, an expert on casino gambling, believes a proposed casino and slot-machine emporium at Suffolk Downs would harm local businesses.

“No serious economic impact analysis has been done in Massachusetts,” Goodman tells McKim. “More money is going to be sucked out of the local economy.”

But aren’t casinos supposed to be good for the economy?

In fact, the negative effect described by Goodman is so well-known that Glenn Marshall, the disgraced former chairman of the Mashpee Wampanoag tribe, reportedly promised business owners in Middleborough that he would give them money to offset the harm that would be done by the casino the tribe had proposed for that town. (The tribe recently dropped the long-dormant Middleborough scheme in favor of a site in Fall River.)

According to a story by Alice Elwell in the Enterprise of Brockton in September 2007, Marshall had promised local business leaders that he would “help” if the casino harmed restaurants in town. Selectman Wayne Perkins was quoted as saying this would have taken the form of “comp points” — scrip given to casino visitors that could be used at Middleborough businesses, which in turn could trade them in for cash. (The original link seems to be broken, but I wrote about it at the time.)

A casino is a self-contained economic machine that sucks money out of customers who might otherwise spread it around at local businesses, a fact Marshall backhandedly acknowledged in promising “comp points.” It then funnels the cash to high-rolling investors — and, of course, to the state, which is why Beacon Hill is now on the verge of approving this monstrosity.

The Globe’s corporate cousin, the New York Times, editorialized on Monday:

Casinos are a magnet for tainted money and promote addiction, crime and other ills….

The state’s politicians should also stop chasing gamblers. At a time when casino revenue is slumping across the country, it doesn’t even make economic sense. They need to make hard decisions on taxes and spending, and focus on developing stable industries, improving education and working their way to growth. If they keep holding out for a false jackpot, everyone will lose.

The Globe editorial page, by contrast, has been consistently if cautiously pro-casino. Too bad. As the region’s dominant media player, the Globe could exercise some real leadership on this issue.

Photo (cc) by Jamie Adams via Wikimedia Commons.

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4 thoughts on “Yes, casinos hurt local businesses

  1. Yup. I was there in the auditorium when Marshall promised local businesses that he’d personally ‘write them a check’ if they lost business. He also said he’d write a check to homeowners near the proposed casino if they lost property value – also a nasty habit of casinos. Towns with roads leading to Foxwoods and Mohegan Sun have lost millions in the last decade in property value.

  2. The way Mary reports what was said, by Marshall, and the way you do, Dan, make it sound like two different things. One is a person saying he will compensate for losses he expects will happen, while Mary’s phrasing suggests it was a person saying IF losses occur, which he does NOT expect to happen, then he will compensate for those losses.

    Do we have a direct quote of what was said, including the surrounding verbiage (so, one way or the other, we know for sure it’s not out of context?)

    By the way, my own concerns are more about what sort of gambling opportunities are presented, should casinos come to pass. The hurt to surrounding businesses (if it does happen) can be mitigated via giving those who gamble a fair break, thus not sending them to pauperville overnight.

    I went into that in more detail over at the “Lovers, Muggers, And Thieves” site, so I won’t take up all of your space here. If you wish to read it…

    http://lmt.foxedproductions.com/2010/07/hit-me-massachusetts-casino-update.html

    1. Dan Kennedy

      @Jim: No, we don’t have Marshall’s quotes. We don’t even have the original Enterprise story online anymore as best as I can tell, which is too bad. That might have answered the question. But I don’t see that it makes much difference. It’s well-established that casinos hurt local businesses, especially restaurants, and Middleborough’s restaurateurs were well aware of it. That’s what led Marshall to make his promise.

      This isn’t rocket science. Do malls hurt downtowns? You betcha. Who cares what Marshall’s opinion was regarding the effect on local business? He was a con artist headed for prison, not a casino expert.

      By far the best way to mitigate the damage caused by casinos is not to build them in the first place.

  3. May 2007, Nichols School, Middleboro: Restaurant owners, home owners, etc. stood up at microphones and phrased their concerns regarding potential lost business, property values, etc. Marshall stands up, and says he’ll cut ’em all a check. In fact, he said he would hand deliver a check to a local, well known restauranteur.

    Of course, several months later, in the language of the Intergovernmental agreement between the Mashpee Wampanoag Tribe, no such promise existed.

    However, this little gem of a clause got in:

    The Town will support the Project and agrees to actively work with and assist the Tribe and its contractors and agents to obtain any and all approvals, legislation,
    liquor licensing or other enactments required for the Project from governmental entities and officials of the United States, the Commonwealth and the Town.

    A local selectman, a lawyer who helped negotiate the agreement, was quoted by the Enterprise as saying he “trusted” Marshal, even after he was arrested. He then went on to lie about that clause at a selectman’s meeting, downplaying it’s meaning, and also decided that the vote on article 3 at the July 2007 town meeting – that the town didn’t want a casino – was irrelevant – when composing the town’s letter to the Secretary of the Department of the Interior. Oh yeah, and he wanted to stop much needed, long-awaited safety improvements to a major local thoroughfare, because they didn’t coincide with the Tribe’s time line.

    I could go on. Everything about the process was corrupt. Marshall’s empty grandstanding about intending to help out locals in the event that they lost money meant nothing. If a casino would have been so great for Middleboro, these underhanded tactics and meaningless promises would not have been part of the mix.

    The people who voiced their concerns that night were right all along. They would lose business and property value if a casino came to town. Of course, after Marshall also declared a man who opposed him a racist on stage that night, people were a little tepid about voicing their concerns publicly again.

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