Meetings & Information


Saturday, October 31, 2009

Growing Business Opposition To Gambling

Experience Columbus switches gears, opposes Issue 3

Days after saying taking a stance on a four-casino proposal in Ohio wasn’t in its best interest, the city’s convention and visitors’ bureau has joined the opposition.

Experience Columbus in a statement issued late Thursday said its board voted to oppose Issue 3, a proposed constitutional amendment that, if approved, would allow gambling facilities to be built in four Ohio cities, including one in Columbus on the edge of the Arena District. The organization’s board last Wednesday decided not to take a stance on the $1 billion proposal, a spokesman telling Columbus Business First the board decided “there wasn’t a complete, concrete belief in either side of the coin.”

The board said it reconvened to consider the casino issue “in light of ongoing concerns of business, hospitality and civic leaders.” A number of influential business groups in the city, including the Columbus Partnership and ColumbusChamber, are against the $1 billion proposal, while Mayor Michael Coleman cast his “no” vote this week. Coleman is the only mayor of a city eyed as a casino site that is publicly against the proposed amendment.

“The Experience Columbus board’s specific concern about Issue 3 primarily relates to the lack of sufficient state and local government controls over casinos,” the statement said. “Furthermore, the Experience Columbus board is concerned about the proposed location of the Columbus casino site under Issue 3 and feels that any site chosen for this purpose should be a community-led decision.”

Friday, October 30, 2009

This Is Not The Time For Expanded Gambling!

Interesting gambling comments:


Just what we need: Low wage, low skill, dead end jobs!

With: High unemployment. Declining discretionary income.

Manna from Heaven will fall to fund slot parlors!

Kudos to Jim Braude!

Thursday, October 29, 2009

Steve Norton and Centaur and Another Bankruptcy

After an exciting day on Beacon Hill, listening to the glistening promises of the Predatory Gambling Industry and watching elected officials with their eyes glazed over simply visualizing piles of money from a predatory industry and hearing few facts, I raced home for yet another RACINO DEFUNK story!
Thanks Steve for not disappointing!
Steve Norton, who has been posting what might appear to be innocuous little blurbs, from Alton, Il, is none other than this Steve Norton ---
H. Steven Norton
Diamondhead Casino
Largo , FL
Sector: FINANCIAL / Real Estate Development

75 Years Old
H. STEVEN NORTON was elected a Director of the Company on August 6, 2002. Since 1998, Mr. Norton has served as President and CEO of Norton Management, Inc., a consulting company in Alton, Illinois and Las Vegas, Nevada. Mr. Norton also currently serves as a Director of Centaur, Inc., a privately held company which owns a casino in Central City, Colorado and owns Hossier Park, an Indiana race track, located in Anderson, Indiana. Mr. Norton is also a Director of Colorado Casino Resorts, Inc. in Cripple Creek, Colorado and North East Resorts, Inc., a privately held company pursuing gaming in the state of Massachusetts. Mr. Norton recently became a Director of 8th Wonder International, Ltd., an entity formed in Jersey, in the Channel Islands, which is involved in the concept design and development of casino resorts. Mr. Norton is also a major creditor of and has provided consulting services to Onnam Entertainment, Inc., a privately held Las Vegas based company, with contracts to develop and operate Native American casinos in various U.S. locations. Prior to Hurricane Katrina, Onnam received permission from the Mississippi Gaming Commission to develop a casino site in Biloxi, Mississippi. The casino, if constructed, would compete with any casino resort subsequently developed by the Company. From 1993 to 1998, Mr. Norton served as President and Chief Operating Officer of Argosy Gaming Corporation, a public company and operator of riverboat casinos. Mr. Norton also previously served as President and Chief Operating Officer of the Sands Hotel & Casino in Las Vegas, Nevada; as President and Chief Executive Officer of the Gold River Gambling Hall & Resort in Laughlin, Nevada; as Executive Vice-President of Resorts International, Inc. and Resorts International Casino Hotel in Atlantic City, New Jersey; and as Vice-President, Treasurer and Comptroller of Paradise Island, Ltd/Paradise Island Casino. Mr. Norton has also previously served as a founder and a Director of the American Gaming Association; as a founder, a Director and Vice-Chairman of the New Jersey Casino Association; as Chairman of the Indiana Gaming Association; as a Director and Vice-President of the Missouri Gaming Association; as a Director of the Illinois River Boat Association and as Chairman of the Casino Commission of the American Hotel Association. Mr. Norton has also served on the Board of Directors and Executive Committee of the American Hotel Association; as Chairman of the Board and President of the New Jersey Hotel Motel Association; as Director and Vice-President of the Bahamas Hotel Association; as Chairman of the Bahamas Hotel Employers Association; as Director and Treasurer of the Bahamas Employers Confederation; as a Board Member of the Nevada Hotel Motel Association; as Chairman of the Atlantic City Convention & Visitors Bureau; as Chairman of the Nassau Paradise Island Promotion Board; and as a member of the Advisory Board of the Governors Office of Travel and Tourism in New Jersey.
Options Exercised
National Council of Legislators from Gaming States
Steve Norton, Director, American Gaming Association, Alton, IL

Some might think that at 75, Steve would be content to sit back, collect Social Security and count his millions. Not so!

We should all be appreciative of Steve's efforts to save Massachusetts taxpayers money and protect our freedoms when he posts things such as his comments below because we know what great prosperity predatory gambling has brought to Atlantic City --

In today's article by Scott VanVoorhis, the question of NIMBY, not in my backyard, has a perfect example in New Jersey's gaming experiment. In 1976 a Statewide referendum would have allowed any community in the State to have gaming, subject only to a second County vote approving casinos. The vote was 60% to 40% against. But two years later, a Statewide referendum passes 57% to 43%, when gaming was restricted only to Atlantic City. [Sometimes, you just gotta wear 'em down before they vote your way!] I would expect similar results in Massachusetts. As several polls have indicated, a majority of State residents favor casino gaming, whether for their own enjoyment, to reduce the out flow of $1 billion to CT and RI gaming establishments, or just because of personal choice; where any Massachusetts adult ought to be able to decide how he spends his own earned income. [Wow! This man truly cares that we should be free to line his pockets!] What the State may want to consider is to have a vote in those communities that have an interested developer, before a special commission determines casion [sic] or racino locations. This step will save a lot of time in a State badly in need of new taxes, construction and employment.
And Steve is soooo anxious to create low wage dead end jobs, he promises --
...few positions would require even a high school diploma; unlike the bio-science industry the state is so vigorously pursuing.
In response to Mr, Norton's op ed, I sent the following letter to the editor, not expecting that the casino cheerleaders would print it --
I read with great interest the comments Kevin Thomas made about
the prospects of a casino in New Bedford and was impressed by
his research, his logic and his unwillingness to believe the one-sided
promotion of predatory gambling.
Steve Norton's response fails to fully convey his interest. He can't
honestly be labelled a mouthpiece for the industry because he
IS the industry and stands to gain from promoting fictitious numbers.
Forbes: Mr. Norton is also a Director of ... North East Resorts, Inc., a privately held company pursuing gaming in the state of Massachusetts.
Mr. Norton promises "...few positions would require even a high school diploma."
In other words, you are guaranteed low wage, low skill, dead end jobs.
We need jobs we can be proud of, where there's an opportunity for advancement,
promotion, jobs with a future that provide hope.
Even Bernie Madoff gave people jobs, better paying than a casino job, with his phony prosperity capitalism is the same rouse.
Predatory gambling sucks discretionary income out of the local economy.
Professor Kindt's research indicated that 1 slot machine permanently
removed 1 job from the local economy.
We need a fair and balanced public discussion about predatory gambling.
The more I learned about the experience of other states, the more
I understand how Mr. Norton accumulated his wealth by creating dead
end jobs that destroy the fabric of our communities.
Mr. Norton doesn't live here and can count his millions from afar.

Anderson, Ind. — Hoosier Park Racing and Casino’s parent company, Centaur LLC, missed an interest payment to its senior lenders Tuesday, causing the company to default on one of its loans.

The lending situation won’t affect Hoosier Park’s operations or number of employees, however, said Jim Brown, the racino’s general manager of gaming.

“Our customers can expect the same entertainment experience that they have come to expect from us, and there will be no impact on our employees,” Brown said. “It will be business as usual for Hoosier Park, regardless of how we go about restructuring our company.”
Brown said the slot machines will not be tightened and rewards will not be reduced in the casino.
With the missed interest payment, however, two of Indianapolis-based Centaur’s affiliated entities in Pennsylvania, Valley View Downs LP and Centaur PA Land LP, filed voluntary Chapter 11 bankruptcy petitions. Brown said the bankruptcy filings were designed to help Centaur keep its gaming permit in Pennsylvania, with which it plans to build another racino called Valley View Downs & Casino.
“We have the last gaming license in Pennsylvania, and we are deeply committed to building that facility,” Brown said. “This was the best mechanism to preserve it.”
In the meantime, Centaur continues to negotiate with its creditors to restructure its corporate debt. Brown said those negotiations would affect the company’s future actions.
“We have numerous options,” he said. “Chapter 11 for the entire company is a possibility. This is simply an effort to redo a debt structure and make your company healthy and ensure the possibility of long-term success.”
Centaur Chief Financial Officer Kurt Wilson said the company had been negotiating with its lenders since July. The company’s existing facilities, which include Hoosier Park and Fortune Valley Hotel & Casino in Central City, Colo., are healthy but not generating enough money to cover Centaur’s capital structure, Wilson said.
Weakness in the economy and a heavy fee burden — Centaur paid $250 million for its Indiana license — has contributed to the existing facilities not being as profitable as needed, Wilson said, as has a delay in the Pennsylvania project that has held up cash flow from that location.
The Pennsylvania project had been funded at the same time as Hoosier Park’s casino was built, but Centaur was unable to receive its Pennsylvania gaming license before credit markets froze and it was forced to give back the loan, Wilson said.
“It has been stymied and delayed since then,” he said. “Now there’s an opportunity with this credit market thawed, it clears the path to move forward,” he said. “We filed Chapter 11 to protect the status of that license so we can continue uninterrupted. We believe it’s the shortest route.”
Wilson said he believed Centaur could accomplish an agreement with its lenders soon. It is unclear how much the missed interest payment was for, as Wilson said Centaur’s finances are private, but the company does not have any principal payments on its loan until 2012.
Brown said he hoped Centaur’s loan default doesn’t affect whether customers come to Hoosier Park.
“Nothing will change,” he said. “I am optimistic that our customers will understand what this is. Everyone can expect a great time a Hoosier Park and for a long time to come in the future.”


Tuesday, October 27, 2009

Foxwoods Receives Reprieve on Debt

Foxwoods Receives Reprieve on Debt

The deeply indebted owners of Foxwoods Resort Casino said Monday that they have reached a deal with creditors that appears to offer some temporary relief.

The Mashantucket Pequot Tribal Council issued a statement saying that it "has entered into a forbearance agreement with its senior lenders" that extends through Jan. 20.

The Tribe did not say how much debt the forbearance applies to or offer any other terms, and said it would not comment further until discussions with creditors are finished.

The tribe, which does not publicly disclose its finances, has reportedly been trying to renegotiate more than $2.3 billion of debt, a situation that has led credit rating agencies to downgrade the tribe's creditworthiness.

In its statement, the tribe said it "remains committed to working with its lenders to reach consensual resolutions."

Last month the Pequots placed Michael Thomas, Chair of the Tribal Council, on administrative leave "pending the outcome of an internal review." Citing a memo from the six other council members to Thomas, The New London Day has reported the council ousted Thomas because he issued a letter Aug. 19 to the tribal membership in which he described his own plan and stated his own opinions about the financial crisis.

Foxwoods and MGM Grand at Foxwoods, which opened with a hiring spree in May 2008, employ a combined 9,000, down from 11,000 last October. The recession has hurt revenues at both Foxwoods and its nearby rival, Mohegan Sun.

Lost CityCenter Value Tops $2B

Lost CityCenter Value Tops $2B

LAS VEGAS-MGM Mirage said Tuesday believes the fair value of its 50% investment in the new CityCenter development on the Las Vegas Strip to be $2.44 billion. Double that for the total investment value and you get $4.88 billion. It was officially $2 billion higher earlier this year.
The revaluation was prompted by the company's decision to discount the prices of its 2,400-unit residential inventory by 30%. "This decision and related market conditions led to the conclusion that the carrying value of the residential inventory is not recoverable," MGM said in a statement.

CityCenter is a 50-50 joint venture of MGM Mirage and Dubai World. MGM said Tuesday it would take a $1.15-billion non-cash impairment charge in the third quarter related to its 50% portion of the lost value -- $955 million for the commercial portion of the project and $174 million for the for-sale residential portion of the development.

Earlier this year the original total investment value was $8.7 billion. Back out $1.8 billion in debt, which was restructured and lowered from $2.5 billion in May, and there's $6.9 billion of investment value for MGM Mirage and Dubai World. Due to the lower value of the real estate as estimated by several third party experts, MGM Mirage believes that investment value has fallen to $4.88 billion, or $2.44 billion each. As of June, MGM Mirage had invested $3.5 billion in the project.
Concurrent with the write-down announcement Tuesday, MGM majority shareholder Tracinda Corp. said it is "exploring the possibility of strategic partnerships or other alternatives with respect to its investment" in the company because it “believes there is substantial unrecognized value in MGM Mirage and CityCenter that is not reflected in the market value of [the] stock," which is trading in the $12 range, down from $100 in late 2007 and up from just $2 in early 2009. Tracinda, led by billionaire Kirk Kerkorian, said it would not initiate any such transaction until after CityCenter is mostly up and running in December, and may ultimately do nothing at all.

Sales revenue from the planned 2,600 condos was initially expected to total $2.7 billion. Then a construction mistake killed plans for a couple of hundred condos that were planned above the Harmon Hotel--the only piece of the development that will not open this year as previously planned--and the recession has left a little less than half of the units unsold. Of some $1.6 billion in contracted condominium sales as of mid-year MGM Mirage sources told at the time that it expected to close on at least 75% of that total. Earlier this month, MGM Mirage offered buyers with units under contract a 30% price discount if they closed on the purchase of their units.

CityCenter includes 6,400 hotel, condo and condo-hotel rooms in several high-rise towers designed by famous architects. The development has been under construction since 2005. The project is on track to open in stages between October 1 and December 16, when the 4,000-room Aria hotel-casino is scheduled to open. The 500,000-square-foot Crystals retail component will be between 65% and 70% booked by the time it opens on December 3, the company told in July. MGM Mirage has been expecting retailers to generate sales of approximately $1,300 per square foot, with MGM Mirage retaining approximately 10% of the total.

Monday, October 26, 2009

A Letter from Somerville To My Friends Throughout the Commonwealth - from Bob Massie

To my friends and all others who care about the Commonwealth:

I have always considered myself a proud and progressive Democrat. For the thirty years that I have worked on social justice issues I have been aligned with progressive organizations in the environmental, labor, human rights, human services, and corporate responsibility fields.

I think I can even claim some history of progressive leadership as the founder of the Global Reporting Initiative, the leading form of corporate disclosure on social, environmental, and economic impacts, now in use by over 1,000 multinationals worldwide and mandatory in many countries. And I have served my party: as co-chair of a state issues convention, member of the national Rules Committee, and as Democratic nominee for lieutenant governor in 1994.

Though my party affiliation has been important to me, it has never barred me from friendships with people of differing parties, views, perspectives, or beliefs. Today I write to you all.

I, like many people, have friends all through the Democratic party. Some became my friends because they were such good candidates.

In this category I count Deval Patrick, who impressed me so much when I first spoke to him that I realized that I might have found a truly new candidate, representing a new kind of politics. My wife and I, after thinking carefully, organized the first major house party for Deval in Somerville, a full year before the election, where we carefully brought together more than 100 representatives of all the major political factions in the city. They were also impressed. Deval went on, through his own hard work, to win 59.7% of the city's primary vote against two opponents.

I am as appalled as anyone in this state at the damage our declining budget is likely to do to real human beings who need help. I have lived and worked in Somerville for more than 25 years and for part of that time I was the pastor of a small Episcopal church where I saw the need for social services up close - among many parishioners, among the 12 "shut-in" senior citizens whom I regularly visited in their homes, among the children on the streets and in the parks. My children attended public school next to the Mystic View projects. So I yield to no one in my sense of urgency about what a dollar cut from the budget can mean in the life of a citizen or family who has no where else to turn.

But I must say - reluctantly, but bluntly - that I am shocked by the behavior of many friends in the face of this recent budget crisis. Because of their understandable concern about the nature of the current budget mess, they have allowed themselves to be silenced by the cynical forces pressing for predatory gambling in this state. And every time I receive - on the dozens of the listservs that I get - another plea to put pressure on the governor to find more revenue, I wonder if the people who are putting out these appeals fully realize what a cruel irony they are perpetuating.

Let's start with the unions....

bmass :: A Letter from Somerville To My Friends Throughout the Commonwealth - from Bob Massie

I have not been a member of a union, so I can't call myself a brother or a sister, but I have worked on virtually every issue that unions have cared about: equal pay, health care, worker protections. I cheered when Bob Haynes, another friend, says that unions are there for those who can least protect themselves. And I grieve when I listen to the electricians and carpenters and others who talk about the astronomically high unemployment rates in their ranks.
But here is how they have chosen to do handle the problem: they have - not for the first time in labor history - been bamboozled by the wealthy. They have bought the false numbers and false arguments that have been advanced by industry consultants and lobbyists who are using them. They have ignored the bankruptcies around the country and the huge amount of evidence that has been piled up by economists from outside the state. I won't go through it here - much of it is available at the website of [United to Stop Slots in Massachusetts -] Please read up, then sign up.

One point, proven over and over again, but conveniently forgotten: every slot machine kills one permanent job in an economy. Why? Very simple. A slot machine requires no labor. It is simply a reverse ATM that sucks money from your account into the casino or racetracks account - money that you could have spent somewhere else.

Labor, sadly, has denied, blocked, or avoided any serious discussion with gambling opponents. The political committee meeting was a love fest with casino owners. Their "Jobs With Justice" dinner committee refused to run an ad from a long-time member, Tom Larkin, paid for with his own money, simply asking for a serious debate. They have held "informational meetings" at Suffolks Downs. They have used long discredited numbers produced by casino-company reports with flawed or deceptive methodologies.

And every time I have mentioned this to Bobby Haynes, he says, "I know, I don't like slot machines, but we need the jobs." The jobs are fake Bobby. It's not worth selling the birthright of the labor movement for this mess of pottage.

And it is not just the construction trades. The SEIU, which should be trembling at the thought of tens of thousands more gambling addicts sweeping down on our overburdened system, has been silent. The people concerned about domestic violence or co-addiction or criminal justice have taken a little stroll. The nurses are on break. The Mass Teacher's Association, to their lasting discredit, has endorsed a system of "job creation" created by a predatory industry that is targeting our video-game loving children for the next wave of gambling traps.

The social service advocates and good government advocates are also embarrassingly silent. Common Cause, of which my grandmother was a founding board member, has decided that they care about corruption, but only at a limited scale - the wholesale distortion of the an entire process in the legislature by gambling interests - not only here but around the country - is something they wish to ignore. Please, Pam. do a little more reading about what is happening around the country.

I could list a large number of groups that have intensified the pressure on the governor and on Beacon Hill not to pursue cuts, but who seem so out of touch with politics that they don't realize that this sets up the perfect hole-in-the-pocket shot by Big Gambling. ,

And then there are the churches. The Mass Council of Churches has been an opponentbut the individual denominations and congregations are too busy worrying about problems in other countries or other decades to pay any real attention to what it is about to happen in their midst. The evangelical communities like Park Street Church and Gordon Conwell seminary - proud heirs to many social movements - have wandered off into the wilderness on this. The Greater Boston Interfaith Organization - an organization I love and of which my church is a member - is proud of the 400 of their financial literacy program that has moved people out of debt. How many people will people will be cast into debt through thousands and thousands of neurologically addictive slot machines. Even though their leaders know - in their bones - that we will reap the whirlwind, they do not speak out. Rev. Hamilton, you are my hero in many ways, please speak the truth here as powerfully as you have throughout your life.

And what about my friends in politics? Some have stood up to fight this - such as those who passed a resolution at the Democratic Issues Convention making it the policy of the party to oppose predatory gambling. There have been powerful leaders against predatory gambling such as Susan Tucker in the Senate, and Dan Bosley in the House - they will eventually be proven to have been not only courageous but right.

The U.S. Senate candidates have, with one exception, been an embarrassment. Michael Capuano, someone I have known for 20 years in Somerville, usually deserves his reputation as a straight-up shooter, who will tell you what he thinks. But he is ducking the question, saying that gambling is not a national issue.

Tell that the people in Michigan, New Jersey, Rhode Island, Connecticut, Pennsylvania, Iowa,and other places who have been fleeced by national and international companies working their way state by state across the country like locusts. Tell that to Congress, which passed the perverse Indian Gaming Regulatory Act, which has allowed international cartels and billionaires to use Indian tribes as fronts for their investments. Or to the Supreme Court which squashed "reservation shopping" for casino lands, something that can only be reversed by an act of Congress. At the very least, it is a regional issue, where a strong social justice Senator could bring together all the parties to slow, stop, and reverse the race to the bottom. Come on, Mike, step up to the plate.

Martha Coakley said that as chief law enforcement official she is working with the legislature to craft the laws that casinos will be necessary if legislation is passed. Martha, if you are elected you will no longer be in this job - in a few weeks. What will you do as a Senator? You used to be opposed to gambling - is your current silence due to your union support and to Senate President Teresa Murray's enthusiasm for your candidacy? Martha, we want to see some spark, some fire in the belly for what's right, not a recitation of your current job description.

Steve Pagliuca says that he hasn't really been able to evaluate whether would be good or bad. That's amazing. The man has spent his career assessing companies, but suddenly his skills disappear when he hits controversy. Steve, step up to a real challenge, something a little more robust than telling Democrats you are for health care reform.

Only Alan Khazei has said - today - that he believes

casinos and slot machines are predatory. He deserves
praise for his courage. When something is predatory, it
means that a practice takes advantage of people who aren't
aware of the dangers, which are deliberately concealed.
Democrats have opposed predatory pricing, predatory
marketing, predatory lending, and now they should oppose
predatory gambling. Again, that is the official position of
the State Democratic Party.

But do the President of the Senate, the Speaker of the House, or the Governor of the Commonwealth care? Apparently not. What about the House and Senate? We will see.

And why is this? In part because our legislators are desperate for revenue. But the darker side is that many former campaign managers, operatives, field organizers, pollsters, and even former candidates and public officials themselves - have gone on the lobbying payroll of different casino or slot companies. I won't embarrass them further by listing them here, but I think that Blue Mass Group should publish a list of every consultant and every lawyer whose firm is now working on the inside, spending some of the $1 million of lobbying funds that have already been spent to our legislature.

All these forces are going to come to a head in the next few months. The House and Senate are holding joint hearings on gambling this Thursday that will be packed with union members who have been bussed into to support something that won't help them and will harm their communities and their families. The churches will twiddle their thumbs, holding meetings on other topics in other places. The social service groups advocates will demand more money - we don't care how you get it. The lobbyists will smile and adjust the cuffs of their expensive suits and admire the shine of their expensive shoes. The governor will forget that people elected him not for his managerial skills alone but also for his moral courage.

The decision is still in the hand of legislators, many of whom have staked their entire careers on their progressive records. They don't realize that they may be about to cast the vote for which they will most be remembered, wiping out the good work they did through years - even decades - in the legislature.

None of us can escape the simple truth that how we raise money to pay for public services says as much about our values as how we spend it.

If a vote comes in the new year to bring in a set of destructive forces because ALL OF US refused to raise our heads for a few minutes from the distractions offered to us by those who are in this for private gain, unless we look with wisdom and compassion to the hills of the future, then we will have sacrificed the principles of the progressive movement, the Democratic party, and the Commonwealth at one stroke.

This is what will happen. Unless there are enough of my friends - and others inside and outside the legislature - who have the courage to stand up and say:


Bob Massie

Sunday, October 25, 2009

Most Extensive Yet Gambling Benefit/Harm Report

Granite State Coalition
Against Expanded Gambling

Warning: wonky. If short on time, read only the Summary Conclusion.

Summary Conclusion:

By the mid-1990s, casinos and slot machines had become pervasive in Australia. The Australian government has collected and evaluated good quality data about the impacts. Gambling - particularly video slot machines - cost Australian society more than the benefits derived. Seeing the impacts on their own communities, 80 percent of Australians have concluded that current gambling is harmful to their communities and want slot machines removed or reduced in numbers.

New Hampshire policymakers must soberly and dispassionately consider whether these same slot machines would somehow have different impacts here. The Australian impact would translate to a cost of $210 million dollars per year in New Hampshire.


Gambling, and specifically "pokies" or video slot machines became pervasive across almost the entire Australian nation by 1995. In both 1999 and again in 2008, the Australian government charged its Productivity Commission with assessing benefits and harms of gambling. On October 21, the Commission released its
630 page draft report.

This report is by far the most comprehensive I've yet seen.

"The Productivity Commission is the Australian Government's independent research and advisory body on a range of economic, social and environmental issues affecting the welfare of Australians. Its role, expressed most simply, is to help governments make better policies, in the long term interest of the Australian community."

Community backlash against slot machines caused Switzerland to ban slot machines outside of casinos in 2005. Widespread concerns about gamblers loosing their life savings and becoming destitute caused Russia to ban all gambling in 2009, other than in four highly remote regions. Due to increased problem gambling, Norway banned all video slot machines in 2007 and Internet gambling in 2009. The Norwegian gambling authority is implementing "less aggressive" (i.e., slow play, low maximum loss rate) gambling machines in smaller numbers than the banned slots.

Specific Harm Findings:

The Productivity Commission found gambling to cost Australian society about $4.5 billion dollars per year, with over 75 percent of these costs deriving from video slot machines. These costs exceed benefits when abused dollars (or "excess" losses) by problem gamblers are included (page 3.22). Cost per year per adult translates to US$225 for all adults in the population.

Video slot machines, rather than other forms of gambling such as lottery or table games, "account for around 75-80 per cent of 'problem gamblers' and are found to pose significant problems for ordinary consumers." (xxiii)

42 to 75 percent of total machine losses are paid by moderate and high risk problem gamblers. (4.1)

About 2.5 percent of Australian adults are now problem gamblers. (4.23)

"[M]any people who do not fit the strict criteria for problem gambling are found to experience significant harms. For example, of those people who said that gambling had affected their job performance, some 60 per cent were not categorised as 'problem gamblers.'" (xxiv)

Slot machines are between 6 and 18 times more risky than lotteries (4.31).

"[A]round 50 per cent of gaming machine gamblers have false beliefs about how gaming machines work, which pose risks to them" (4.1). "Faulty cognition" about slot machine design is strongly associated with problem gambling. 33 percent of high-risk problem gamblers, 20 percent of moderate risk, and 5 percent of recreational gamblers believe that a gambler is more likely to win on a slot machine after loosing many times in a row (4.11). Some groups of consumers - such as people with intellectual or mental health disabilities, poor English skills, and those who are emotionally fragile (say due to grief) - may be particularly vulnerable to problems when gambling (3.9). Slot machine profits and tax proceeds therefrom are predatory on weak and vulnerable members of the population.

Thirty-nine percent of high risk problem gamblers suffered adverse effects on workplace performance, an often ignored or unquantified externality. (4.21)

"Beyond the powerful example provided by the early liberalisation experiences of Australia, there is a broad range of evidence suggesting a link between accessibility [proximity] and harm." (10.3)

Australian gamblers are estimated to lose A$790 million per year (about 4 percent of the size of legal gambling) from illegal online gambling and Internet casinos. (12.1)

The effect of widespread gambling machine availability on the economy can be seen in Australia, where gambling losses are now 3.1 percent of household consumption, 6.3 percent in Northern Australia (page 2.3).

"The potential for significant harm from some types of gambling is what distinguishes gambling from most other enjoyable recreational activities - and underlines the communities' ambivalence towards it" (xx). "While many Australians gamble, they remain sceptical about the overall community benefits (figure 3.2). For instance, one survey estimated that around 80 per cent of Victorian adults considered that gambling had done more harm than good (with little difference between the views of gamblers and non-gamblers)" (3.8). Looking at all Australian surveys, roughly 80 percent of the public wants to see video slot machines removed or their numbers reduced (10.9).


Eight to 15 percent of Australian problem gamblers seek treatment. "Internationally, around 6-15 per cent of people experiencing problems with gambling are reported to seek help from problem gambling services" (5.3). "People experiencing problems with their gambling often do not seek professional help until a 'crisis' occurs - financial ruin, relationship break down, court charges or attempted suicide - or when they hit 'rock bottom'. (5.4)

"Help services for problem gamblers [using them] have worked well overall, but they relate to people who have already developed major problems and are thus not a substitute for preventative measures." (xv)

Harm Reduction:

60 percent of Australian teens gamble on video slot machines by the time they are 18 years of age. Over 60 percent of Aussie teens have gambled in some form before they reached 18 years. (6.23)

"[I]ncreased knowledge of gambling in children may have the unintended consequence of intensifying harmful behaviour, a risk that should be considered in the design (or even in considering the introduction) of school-based programs. Nevertheless, several insights emerge from the drug, alcohol and driver education literature that may increase the effectiveness of any school-based gambling education programs and potentially reduce the risks of adverse behavioural responses: a school-based education program may be more effective if accompanied by a corresponding change in societal attitudes and a media campaign. For instance, ... the relatively greater success of school-based tobacco programs (compared with alcohol) [is attributed] to the fact that these were accompanied by 'consistent anti-smoking messages in the general media and to the emergence of a strong anti-smoking social movement.'" (6.20)

If New Hampshire were to legalize slot machine gambling - even with a school-based anti-gambling education campaign - but without a strong anti-gambling social movement and media campaign (completely unlikely if the state were to operate or license casinos, and unlikely if the state were to become significantly dependent upon casino revenues), New Hampshire could experience Australian levels of teen gambling.
Teen gambling in the U.S. is associated with sharply increased teen criminal activity and illegal drug use.

"Had there been full knowledge at the time about the harmful effects of substantially increasing accessibility to gaming machines in the 1990s, a different model of liberalisation, with less widespread accessibility, may well have been seen as appropriate. (Western Australia did not follow the approach of other jurisdictions and appears to have far fewer gambling problems.) However, it would obviously be difficult and impractical for any government now to significantly reverse longstanding arrangements." (xxxii)

Given that the Productivity Commission deems it impossible to put the slots genie back in the bottle, its recommendations focus on harm reduction, for example, mandating machine designs that reduce gambler losses per hour to 1/10th those of present slot machines and implementing a $1 per button push bet limit.

New Hampshire's policy options are now far more favorable than Australia's: whether to let the slots genie out of the bottle, i.e., harm reduction through the far more effective route of prevention.

Better a fence at the top of the cliff than the world's best ambulance at the bottom.

Granite State Coalition Against Expanded Gambling PO Box 3931 Concord NH 03302

Saturday, October 24, 2009

Weak Numbers Don't Bother Penn Investors

Weak Numbers Don't Bother Penn Investors

I don't know whether to be impressed with or mystified by investors of Penn National Gaming (Nasdaq: PENN).

On Wednesday, the operator of casinos and racetracks issued some unwelcome news: Third-quarter profit, as well as the company's guidance, fell below the Wall Street consensus. Full-year earnings and revenue will be less than what the company had predicted in July.

Yet shares were up by more than 5% in midday trading Wednesday.

Although some casino operators are delaying or suspending their ambitions during the recession, Penn National, strapped with cash due to renegotiated terms with lenders and the issuance of new debt, is forging ahead in several U.S. time zones.

To longtime investors, these plans have been discussed periodically this year. To new or prospective investors, Wednesday's recitation reveals an optimistically aggressive company.
Grand plans Investors beware: Many of Penn National's plans rely on voters or legislators. However, in a best-case scenario, Penn National could significantly add to the 16 properties that it owns or operates.

Here's a brief look:
The company expects to learn today from Maryland regulators if it can build a slot machine facility in a county that borders both Pennsylvania and Delaware -- states that allow
racetrack casinos and/or stand-alone slot machine facilities.

Penn National recently became half-owner of a joint venture with International Speedway (Nasdaq: ISCA), bidding to build a casino next to a motor-sports track in Kansas City, Kan. State regulators will hopefully decide by year's end.

The company supports a proposed amendment to Ohio's state constitution that would permit full-service casino gambling in four large cities. A vote is set for Nov. 3. The company is also awaiting resolution of a political-legal dispute over whether racetracks can allow slot machines. Penn National owns a Toledo track and says that it has its "eye on other racetracks in the state."
Penn National is one of several bidders seeking a contract to build a slot machine facility next to the
Aqueduct Race Track in New York City. Among the many competitors for this piece of prime real estate are Wynn Resorts (Nasdaq: WYNN) and Harrah's Entertainment.

Penn National is exploring the prospects of acquiring the bankrupt, partially completed Fontainebleau, putting it in the Las Vegas neighborhood of such heavyweights as Wynn, Las Vegas Sands (NYSE: LVS), and MGM Mirage (NYSE: MGM). The company said Wednesday that it has talked to a prospective partner and has made an initial proposal to Fontainebleau creditors.

Yesterday and tomorrow Despite the ambitious long-term goals, investors can't ignore the immediate past or the immediate future.

For the third quarter, Penn National's earnings per share of $0.33, excluding special items, fell $0.02 below the Wall Street consensus. Revenue of $620.4 million missed the company's forecast of $651.4 million.

The company had forecast earnings per share for the year at $1.27; recently it changed that guidance to a more conservative $1.01 per share. Revenues took a similar hit -- down from $2.46 billion guidance to $2.39 billion.

Over the years, Penn National has rewarded investors by capitalizing on opportunities outside Las Vegas, Macau, and Atlantic City. However, like most companies, it isn't immune to recession, and shareholders have paid the price over the last two years. However, with more states turning toward gambling to reinforce their budgets, Penn National should be positioned well when there's a full-fledged gambling revival.

Let us know what you think: Is it crazy to be thinking about Las Vegas expansion right now?


In view of the recent fluff up, the article below is a worthy reminder.


Why the argument for casinos in Massachusetts ain’t nothing but a mathquerade

This past March, Dr. Clyde Barrow, the director of the Center for Policy Analysis (CFPA) at UMass Dartmouth, authored a paper outlining his recommendations for how to introduce casino gambling into Massachusetts. It detailed a very specific set of guidelines for how to "maximize the economic impacts of expanded gambling in Massachusetts."

Barrow's blueprint called for "three commercial resort casinos," to be situated in Suffolk Downs, southeastern Massachusetts and western Massachusetts. It promised that, collectively, the casinos would generate $1.5 billion in revenue and create 20,000 jobs. It recommended a 27 percent tax rate on gaming revenue, which would generate "over $400 million" in revenue for the state, half of which would be spent on local aid. It suggested that the state charge $600 million in casino licensing fees every 10 years. It also recommended that the casinos allocate 2 percent of their gross revenues to offset the costs of communities near the new casinos.

In August, just as Governor Deval Patrick was retiring to the Berkshires to study the research gathered by his Gambling/Gaming Internal Study Group, C. Stanley McGee, the Assistant Secretary for Policy and Planning in the Executive Office at Housing and Economic Development, added a copy of Barrow's report to the governor's packet of gambling research materials. The report was preceded by a rather unusual disclaimer:

"As most of you know, the work of Professor Barrow and The Center for Policy Analysis at UMass Dartmouth is not without some controversy, and many opponents of expanded gaming question the rigor of the economic analysis and the independence of the organization given its pro-gaming recommendations. All that being said, we wanted to circulate the report for your convenience since some of you have seen mention of it in the news and had asked for a copy."

Despite the warnings from his staff, a little over a month after receiving a copy of Barrow's blueprint, Patrick returned from his sojourn in the woods to deliver a gambling plan remarkably similar to Barrow's proposal: He recommended three casinos taxed at 27 percent, and said the state would reap $400 million in new tax revenues, $600 million in 10-year licensing fees, 20,000 jobs and a 2.5 percent allocation of gross funds to local communities. The end result would be $2 billion in instant economic development, Patrick said. Casinos would allow Massachusetts to surmount a fiscal crunch, advance an expensive gubernatorial agenda and close a $15-$19 billion transportation funding gap without raising taxes.

Outside of Barrow's papers and studies that casinos have funded (some of which rely on Barrow's research), hard numbers for casinos' economic benefits, by and large, don't exist. And if it's problematic that Patrick built a major policy decision on one man's research, it's doubly so that that research comes with a warning from the governor's own staff.

Barrow, a highly public figure in the state's casino debate and local journalists' go-to person for gambling quotes, pioneered a controversial technique known as "patron origin" analysis. It consists of counting cars in casinos' parking lots. Barrow estimates that the percentage of out-of-state license plates equals the percentages of out-of-state residents gambling at the casino, which, in turn, is equal to the percent of out-of-state money being spent there. Barrow's research is the only apparent source for the widely-repeated statistic that Massachusetts residents spent $1.1 billion at out-of-state casinos last year, which is often used to point to more than a billion dollars of "untapped demand" for gambling in Massachusetts.

Representative Daniel Bosley, who co-chairs the legislature's committee on economic development, has been attacking Barrow's research for nearly a decade. Barrow retorts that critics of his methods "simply don't understand sampling techniques or margins of error."

But methodology aside, it is clear that Barrow's casino studies have consistently painted a relentlessly optimistic picture of gambling in New England, and that he has worked for casino interests in the past. According to a copy of Barrow's resume that is attached to the CFPA's website, he was hired by the Aquinnah Wampanoag Tribe of Gay Head in 1995 to conduct what appears to be his first patron origin analysis at Foxwoods. In 1999, according to the CFPA's website and his resume, Barrow conducted a casino study for The Visions Group, which, according to a 1999 New Bedford Standard-Times article, was "a team of developers who hope to build a $300 million casino in Salisbury."

But today, Donald Widdis, the chairman of the Aquinnah Wampanoags of Gay Head, the same tribe that contracted with Barrow, says that even he doesn't trust Barrow's methods. "I think his report was long on assumptions that weren't really articulated," he says.

In materials Patrick's staff released last week, the administration claimed that it had based its decision on "our initial economic modeling." But a review of the research materials Patrick used to make his decision only shows that the study group compiled the research of others. In the process, it did little to distinguish dubious casino-funded studies from other, more authoritative sources, allowing Patrick to ignore anything he didn't want to know.

Several reports in Patrick's research packet cast doubt on the economic benefits of legalized casino gambling.

"Rigorous, independent analysis of the fiscal considerations of expanding legal gambling are scarce, to say the least," says an extensive report written in 2002 for former Massachusetts Governor Jane Swift. The only available revenue estimates for casinos are funded by biased sources, it notes, and their projections of hundreds of millions of dollars and thousands of jobs could be faulty.

"Such studies often overestimate benefits and underestimate costs," says a survey conducted by Harvard's Rappaport Institute for Greater Boston in 2005. Notably, its authors found "little difference between employment rates" in communities with casinos and communities without them.

"Predictions done before [casino] development are notoriously inaccurate," argues the 2003 report of the Rhode Island Special House Commission to Study Gaming.

"Much of what [research] does exist is flawed because of insufficient data, poor or undeveloped methodology, or researchers' biases," asserts the report of the National Gambling Impact Study Commission, a federal panel that assessed the costs and benefits of gambling in 1999.

Patrick has argued that casinos will largely act as tourist attractions, and that, by drawing tourists to the area, they will spur economic development. But a 2006 Federal Reserve Bank of Boston report found that tourists don't spend money outside casinos, and that urban casinos have "little secondary economic impact."

Astonishingly, considering Patrick's contention that casino gambling revenue will drive down property tax bills, fix the state's crumbling transportation infrastructure and fuel rapid economic development, a 2004 policy paper from the Federal Reserve Bank of St. Louis found that "Many states with casinos are facing budget crises similar to states without casinos." It also reported that, although employment rates went up in counties with new casinos, local retail trade plummeted by 25 percent.

In a 10-page memo that offered wildly contradictory conclusions on the economic costs and benefits of casino gambling, an aide to Secretary of Housing and Economic Development Dan O'Connell, who headed up Patrick's gambling study group, warned that "the economic analysis contained herein has not been independently verified." The memo recommended "the formal engagement of a third party firm" that could offer an independent analysis of the economic projections contained in the governor's research packet. "To do otherwise," the memo argued, "would be to risk entering negotiations over license fees, tax rates, etc. on an uneven information playing field. If any decision turns primarily on the economic development opportunities promised by some for expanded gaming in Massachusetts, then it is well worth testing the validity of those economic assumptions through more robust analysis ..."

Patrick's proposal doesn't reflect any of this caution. Instead, it echoes the more rosy assertions of studies funded by local casino developers who stand to make billions if casinos are legalized in Massachusetts. Materials from the Las Vegas Sands Corp., which wants to build a massive casino in Marlboro, and Suffolk Downs, which is noisily agitating for the right to add a casino and hotel to its East Boston horse track, were among the reports in Patrick's research packet.

The developers were not asked to provide O'Connell's study group with input, but when they did, they seem to have had their voices heard. (Think the Department of Public Health deals much with tobacco-funded research on cancer and nicotine addiction?) The memo quoted above briefly notes that "no estimates appear to exist on the construction employment impact of a destination resort casino in Massachusetts, aside from reports prepared by casino supporters." It then goes on to parse the revenue, jobs and economic development impacts of casino gambling using the only Massachusetts-specific job and revenue estimates available-those in Barrow's research, which so worried O'Connell's office, and those provided by Harrah's, Suffolk Downs, the Mashpee Wampanoags and Las Vegas Sands. Needless to say, the numbers are highly optimistic.

The Sands report promises $228.5 million in state revenue, and says that its single casino would generate 10,000 jobs and $1.8 billion in new economic activity, all without taking money away from the state lottery. In a slick packet stuffed with photos and pull quotes, Suffolk Downs claims that one casino would give Massachusetts $268.9 million in new state revenue, and two would up the state's annual take to $444.5 million.

Those studies were also stuffed with optimistic rhetoric of the kind that seems to be cropping up in Patrick's arguments for casinos. "While some argue that there are social and economic costs associated with expanded gaming, these fears are largely unfounded in the context of a resort-style casino," chirps the Suffolk Downs report. "By creating thousands of jobs, generating long-term spending and increasing tourism, a resort-style casino promises economic stimulation and growth, and hundreds of millions of dollars in revenues to the state, cities and towns."

Sound familiar?

Asked how such questionable research was allowed to go before the governor at all, let alone possibly form the foundation of such a monumental policy decision, Patrick spokeswoman Cyndi Roy said, "The mission of this group was never to verify information; it was to pull together all the information that was out there."

She said Patrick's jobs and revenue projections, which closely mirror those of questionable sources, but seem to disregard more pessimistic (though authoritative) reports, came from "internal staff" estimates "based on a review of the studies and the experiences of other jurisdictions." Those estimates have not been made available to the press.

"We did not independently verify any of the studies included in the briefing materials before submitting them to the governor," said Kofi Jones, O'Connell's communications director. Jones quickly added that "The governor did not solely rely on the information in this packet," saying that he also relied on conversations with members of the study group, legislators and "stakeholders on both sides."

"The purpose of the packet was to give him a fundamental education on the issue," Jones argued. "We wanted to look at the legitimate research that has been done in the past so he had a good basis to go from. This packet is not the be-all and end-all of the governor's decision."

"We met with O'Connell, and what I got from O'Connell was that he didn't have a good handle what the figures were," says Widdis, the chairman of the Aquinnah Wampanoag, who met with O'Connell this summer. "I think they're fishing."

No shots fired in war on gambling

During Senator Spilka's Casino Love Fest, it was made clear that the state becomes the largest shareholder in promoting addictive behaviors. Sort of like the gambling pimp for the Commonwealth.
Surely, some scoffed. Here's the experience from Down Under --
"Governments are involved in nearly every aspect of gambling. They act as suppliers, tax collectors and police." That makes state governments extremely conflicted when it comes to addressing problems attached to the way the gambling industry operates.
Of Government Addiction to Gambling Revenue and Those Ever Escalating Expenses --
The irony of state government dependence on gambling taxes is that while the money is valuable in the short term to budget bottom lines, in the long term the effects of problem gambling on the community are felt through increased government spending on welfare, health assistance and counselling services.

Impartial studies indicate that for every $1 in tax revenue generated, gambling costs $3.

Non-government organisations such as Mission Australia have estimated that those costs ultimately outweigh the tax take...

Of Regressive Taxation and Social Inequality --

Poker machines are mostly used by lower socioeconomic communities (confirmed by the Productivity Commission). It makes for highly regressive taxation; that is, taxation targeted at low-income earners, punishing the poor far more than the rich. A good Labor leader should philosophically support redistributive taxation policies ahead of regressive gambling revenue streams.

Of the flawed argument about freedom --

Liberal politicians are likelier to shy away from doing something to curb the growth of gambling for philosophical reasons. Anyone supportive of free-market economics and freedoms of choice may suggest the right to gamble is an individual right. This ignores research that shows problem gambling is an illness that, as with alcoholism, restricts free will.

Campaign contributions --

...the consequence has been that the gambling industry donates far more substantially to the Labor Party than to the Coalition.

If the states are not addicted to the taxation revenue from gambling, the Labor Party is surely addicted to the campaign donations the industry throws its way.

Of Gambling Addiction Contributing to Homelessness --

Figures show that as many as 100,000 Australians are classified as homeless.

If the MPs took the time to ask those at the [homeless] shelters what factors contributed to them being there, they would have heard tales of gambling addiction as a contributing factor.

This is worth reading in its entirety.

No shots fired in war on gambling

Peter van Onselen, Contributing editor October 24, 2009

IN September 2007, then prime ministerial aspirant Kevin Rudd pledged to do something about the rise of poker machines across the country, after an ABC investigation into the effect of problem gambling in NSW.

"I hate poker machines and I know something of their impact on families," he said. He promised to find a way to reduce the reliance of state governments on poker machine tax revenue, the nub of the problem.

We now know that Rudd hates poker machines so little that the only recommendation in the Productivity Commission's draft report into gambling (released this week) that his government has committed to act on is to lift restrictions on online gambling sites within Australia.

In other words, measures that will add to the gambling industry, not take away from it.

State government dependence on gambling revenues is staggering. In the nation's two largest states, NSW and Victoria, gambling receipts make up about 12 per cent to 15 per cent of taxes collected annually. With the exception of Western Australia, dependence on gambling revenues are similar in other states.

As far as the rest of the Productivity Commission report is concerned, the federal government will think seriously about which way to jump on the recommendations when the final report is handed down next year. In this all-important public policy area - one that substantially contributes to social disadvantage - the Labor government will have done nothing to curb problem gambling in its entire first term in office. Is it any wonder Rudd is at risk of becoming a prime minister who goes down in the history books as someone who promises a lot but delivers little?

The Productivity Commission points out: "Governments are involved in nearly every aspect of gambling. They act as suppliers, tax collectors and police." That makes state governments extremely conflicted when it comes to addressing problems attached to the way the gambling industry operates.

Good public policy dictates that poker machines should be restricted to casinos, not lined up in every pub and club on the continent.

It is also the reason federal action is required. States are too conflicted. The Productivity Commission, in its draft report, notes that universal action across state borders is the only coherent way to do something about the hundreds of thousands of Australians who have a problem with gambling. Given that Rudd likes to spruik a commitment to co-operative federalism, here's a chance.

If Rudd is to live up to his rhetoric on this subject it will be costly to taxpayers. The Productivity Commission notes: "The gap between commonwealth grants to the states and their fiscal needs have to be filled through the states' limited avenues for own-source revenue. These include gambling." This is vertical fiscal imbalance: the fact the federal government collects most of the tax revenue but the states, on the service delivery end of government, do most of the spending. Unless Rudd can find a way to substitute gambling tax revenue with adequate commonwealth assistance, state administrations can't cut gambling tax dependence (thereby curbing access to gambling options) without harming frontline services.

WA is the exception. It can afford not to depend on gambling revenues (and doesn't) because the mining-rich west secures a bumper allocation of mining royalties each year. Pubs and clubs in the west are not permitted to house poker machines.

The irony of state government dependence on gambling taxes is that while the money is valuable in the short term to budget bottom lines, in the long term the effects of problem gambling on the community are felt through increased government spending on welfare, health assistance and counselling services.

Non-government organisations such as Mission Australia have estimated that those costs ultimately outweigh the tax take, but only through time.

Electoral politics tends to dictate that governments want to appear fiscally prudent, which means they can't just clock up debt while waiting for the economic benefits of reform to trickle through the economy.

Poker machines are mostly used by lower socioeconomic communities (confirmed by the Productivity Commission). It makes for highly regressive taxation; that is, taxation targeted at low-income earners, punishing the poor far more than the rich. A good Labor leader should philosophically support redistributive taxation policies ahead of regressive gambling revenue streams.

Liberal politicians are likelier to shy away from doing something to curb the growth of gambling for philosophical reasons. Anyone supportive of free-market economics and freedoms of choice may suggest the right to gamble is an individual right. This ignores research that shows problem gambling is an illness that, as with alcoholism, restricts free will.

In any case, for Labor the concept of the nanny state is not a foreign one and Rudd has shown a willingness to philosophically support active state growth. So intervening to do something about gambling, as Rudd pledged to more than two years ago, should not take another year before we witness even a beginning of action.

It isn't a lack of public support that is holding back Rudd. No-pokies independent senator Nick Xenophon has shown how popular taking on the gambling industry can be.

So what could be holding back Rudd? The liberalisation of gambling across the nation largely occurred in the 1990s and, perhaps surprisingly, mostly was done by state Labor governments. Rudd knows a little about this. Despite his moral doubts about the influence of gambling on communities when he was trying to get elected as prime minister, as chief of staff to then Queensland premier Wayne Goss he oversaw the introduction of poker machines across the Sunshine State.

It may only have been coincidental that Labor was predominately in power at a state level at the time that poker machines in clubs and pubs proliferated. But the consequence has been that the gambling industry donates far more substantially to the Labor Party than to the Coalition.

If the states are not addicted to the taxation revenue from gambling, the Labor Party is surely addicted to the campaign donations the industry throws its way. It is not just the big end of town connected to gambling that donates to Labor campaigns. Labor clubs operating pokies provide the Labor Party with more than $1million in campaign donations every year. Perhaps pragmatic strategic reasons explain why Rudd's rhetoric on gambling reform doesn't match his preparedness to act.

Soon after he was elected Prime Minister, Rudd insisted his backbenchers each visit a homeless shelter. It was a stunt but a good one. It put his MPs on the frontline of how social disadvantage could manifest itself. Figures show that as many as 100,000 Australians are classified as homeless. If the MPs took the time to ask those at the shelters what factors contributed to them being there, they would have heard tales of gambling addiction as a contributing factor.

RCMP accused of ‘willful blindness’

If these are the problems British Columbia is failing to appropriately address, how is Beacon Hill remotely competent to deal with predatory gambling?
Big Dig anyone?
It's time to insist on an impartial cost benefit analysis.

RCMP accused of ‘willful blindness’ over gaming problems

October 23, 2009

Sean Holman
Public Eye

The former commander of British Columbia's now-defunct integrated illegal gaming enforcement team is questioning the provincial government's commitment to "meaningful" illegal gaming investigations.

In an exclusive interview, Fred Pinnock also described the RCMP’s senior management in British Columbia as demonstrating “willful blindness” when it comes to the connection between illegal gaming and organized crime.

And he said his provincially-funded RCMP team should have been expanded, not shutdown.

Pinnock, who retired as a staff sergeant in September 2008 after 29 years with the force, acknowledged airing his concerns will make him "unpopular with some of my former colleagues."

But he felt compelled to do so in part because he believes his team should have been keeping tabs on what happens inside legal gaming facilities rather than just cracking down on illegal gaming outside those facilities

"For the police not to have well-resourced law enforcement units dedicated to casino environments is very short-sighted in my opinion," he said.

Pinnock, now a managing partner with Lions Gate Investigations Group Inc., said the Ontario Provincial Police have three casino intelligence units that monitor, anticipate and prevent organized crime from becoming involved in that province's gaming facilities.

But he said there's nothing comparable in British Columbia, even though "other than correctional institutions, casinos have the highest density of organized crime figures anywhere.

Here, gaming facility employees and British Columbia Lotteries Corp. security report suspected criminal activities to local police and The Ministry of Housing and Social Development's gaming policy enforcement branch.

Local police are responsible for investigating those reports. Depending on the type of activity being investigated, they're assisted by the enforcement branch.

Pinnock acknowledged those at BC Lotteries and the enforcement branch are "very competent people.”

But he questioned whether their "resources and mandate are sufficient to effectively target the criminal activity going on within these environments," noting they don't appear to have had much impact.

The reason: Pinnock said there hasn't been any big busts at casinos even though "it obvious that highly-pedigreed gangsters frequent these venues on a continuing basis.”

“There's a ton of criminal activity being conducted in these places every day, including money laundering, loansharking and other enterprise crimes," he said.

The RCMP is "playing ostrich" about the problems inside legal gaming facilities, he concluded.

In response, the RCMP noted the enforcement team’s mandate was “determined by the ministry of housing and social development” and that “tackling organized crime remains a strategic priority” for the force.

But Pinnock said senior management is only giving "token attention" to the illegal gaming problems outside legal gaming facilities.

"I don't think the RCMP is sufficiently aware of the very significant role that un-enforced gambling has in social decay," he explained, adding that most illegal gamblers are "addicted gamblers, with all the associated life impacts."

Instead, the force has focused on criminal activities that "keep them positioned to ensure the renewal" of their provincial policing contract in 2012, such as gang violence.

"It's hard to take issue with the RCMP's enforcement priorities, given all of the carnage on the streets of British Columbia," said Pinnock. "But a failure to aggressively target the criminal element involved in the gambling business will have far reaching consequences down the road. Police agencies must find the resources to address this issue."

As for illegal gaming, Pinnock said, during his two-and-a-half years as the enforcement team’s commander, he had the impression government was more concerned about "the appearance of doing something" rather than "meaningful results."

"It seemed the way to remain in favour with government was simply to maintain a statistical, check-the-box-type, radar gun-level of enforcement and not meaningful targeting that would disrupt significant criminal activity," he explained.

But seven months after Pinnock’s retirement, the team - which received its funding via a BC Lotteries sponsorship agreement - was quietly shutdown, its April 1, 2009 closure marked by nothing more than a footnote in the Crown corporation’s financial statements.

The government has said it was more efficient for its enforcement branch inspectors to work directly with local police on illegal gaming issues.

And, on Wednesday, Solicitor General Kash Heed took issue with Pinnock’s contention the government didn’t seem interested in “meaningful“ illegal gaming investigations.

“That's that individual's opinion," he said. "And he's entitled to his own opinion but not his own set of facts.“

“I've given you the facts with respect to how we're dealing with illegal gangs and organized crime in British Columbia that are involved in this activity," he continued, noting the government’s gaming policy enforcement branch "still has investigators that work closely with the RCMP to deal with significant issues around illegal gaming in this province,"

But, six months following the shutdown of his team, Mr. Pinnock said, “I’m not sure how motivated the provincial government was to have high-profile enforcement of illegal gaming in the province.”

As for why, Pinnock didn’t have an answer.

Although he added, "It was a very awkward marriage between the police and a government which benefited from gambling revenues."

As of Thursday, the RCMP hadn't responded to requests for comment.

The government did not respond by deadline.

Sean Holman is editor of the online provincial political news journal Public Eye (

RI Twin River to end greyhound racing

Financially struggling RI gambling parlor reaches
agreement to end greyhound racing at track

RI slot parlor has deal to end greyhound racing

PROVIDENCE, R.I. — A financially troubled slot parlor seeking bankruptcy protection will pay $5 million as it attempts to end the last greyhound races in Rhode Island because the sport is costing the track money, attorneys said Friday.

UTGR Inc., the owner of the Twin River gambling hall, has agreed to pay the Rhode Island Greyhound Owners Association $2 million to end racing at the track if the restructuring plan is approved by a federal judge, according to court documents. The dog owners would receive an additional $3 million if Twin River successfully emerges from bankruptcy.

U.S. Bankruptcy Court Judge Arthur Votolato was expected to consider the plan at a Nov. 17 court hearing.

Twin River filed for bankruptcy protection in June as its owners struggled to repay a half-billion dollars in debt taken to buy and renovate the facility. State officials have closely monitored the case since Twin River’s slot machines are the third-largest source of state income. They are expected to generate about $239 million this year, or 8 percent of all income raised by the state.

“If the settlement agreement is approved, it completes a key step towards enhanced financial viability of the facility, helping to preserve key revenue for the state of Rhode Island,” Twin River spokeswoman Patti Doyle said in a written statement.

Twin River, which began as a horse track in the 1940s, is the last venue in the state to offer greyhound racing. Dog owners wanted to keep the races but eventually agreed to the settlement, said their spokeswoman, Jennifer Bramley.

“In light of the bankruptcy, we believe this settlement to be a fair and appropriate agreement,” she said.

Gov. Don Carcieri, a Republican, helped negotiate a bankruptcy plan that would allow Twin River to restructure and continue operating. As part of the deal, Carcieri asked state lawmakers to repeal a law forcing Twin River to offer 125 days of greyhound racing. Wagering on the races has plummeted from $150 million in 1990 to $13 million.

Instead of ending the games, Democrats in the General Assembly passed a law expanding the racing season to 200 days. Carcieri vetoed the legislation, but Democratic legislative leaders have said they would seek to overturn his veto.

Sen. Frank Ciccone III, the bill sponsor, did not immediately return a call seeking comment.

If lawmakers refuse to end greyhound racing, Twin River officials have said they may find new dog owners willing to race for less money.

Friday, October 23, 2009

If the public really wanted it.......

If the public really wanted it, the predatory gambling trade would not need to spend $32 million to remind them

A pro-casino group in Ohio reports it has spent nearly $32 million promoting a fall ballot issue that would authorize casinos in the state's four largest cities (and there is still twelve more days to go in the campaign.)

A state campaign finance filing shows the Ohio Jobs & Growth Committee spent $31.7 million. Nearly all the cash came from arms of its two main backers, Penn National Gaming Inc. and Cleveland Cavaliers owner Dan Gilbert.

The ballot issue asks voters to approve casino construction in Columbus, Cleveland, Cincinnati and Toledo, agree to a 33-percent tax on the facilities for state and local programs and create a state committee to oversee a type of gambling that is thus far illegal in the state. Spending by its rival, the anti-casino TruthPAC, was not yet posted Thursday afternoon.

This is the fourth time the predatory gambling trade has paid for a campaign in Ohio. They were defeated in their first three tries and now they are spending $32 million to tell Ohio citizens to vote for something that supposedly they want.

It is another example of “the spend enough money until you win”
strategy in action. It is also why the movement to stop predatory gambling will continue to grow across America.

How many times is 'no' enough for casino crowd?

How many times is 'no' enough for casino crowd?

Mainers have turned down casinos four times since 2005, but dollar signs still beckon backers.

What is it about casinos that, no matter how many times Maine voters say "no" to proposals to put them here, there or just about anywhere, the hope of building one somewhere keeps popping up?

Oh, that's right, it's the money.

Which is not the reason this paper has, with one exception, opposed them. "Profit" is not a bad word, as long as the methods by which is it earned are aboveboard and positive.

Casinos may be aboveboard – nobody really hides the fact that they sell artificially generated excitement about winning a jackpot right along with odds that decisively favor the house – but it's hard to call that sort of enterprise "positive."

So, to get them going in Maine, all sorts of promises have been made about diverting some of gambling's profits to keeping the harness racing industry afloat, or providing money for education, or medicines for impoverished seniors, or some such goal.

They are also sold by pointing to the service-industry jobs that are "created" by them. However, that only papers over the two central facts of casino gambling:

First, for every person who leaves a casino with more money than he entered with, dozens leave with less.

And tons of dollars flow not to Maine workers or causes, but to the out-of-state "gaming industry" companies hired for their "expertise" in extracting cash from customers' wallets.

Indeed, reading accounts of how slot machines are scientifically designed to exploit patrons' psychological weaknesses to keep them pushing in money, despite their ever-increasing losses, is a fascinating, though horrifying, educational experience.

It's true that this paper did support a casino proposal, when Passamaquoddy Indians wanted one in Washington County, on the grounds that as long as state and local voters had backed one casino (in Bangor), an impoverished minority group deserved consideration for its facility own due to the discrimination it has historically faced.

Voters, however, rejected that proposal, as they have all the others brought to them since 2003, when the "casinos-at-permanent-racetracks" referendum was passed while a larger Indian-run casino in York County was defeated. Studies have shown that smaller casinos don't import money from far away, but instead reap dollars from local patrons who otherwise would have spent their money at local businesses. And when gambling turns into an addiction, the social cost in crimes, bankruptcies and family breakups becomes enormous.

Now, a group of entrepreneurs has announced its plans to put another casino referendum on the ballot next November to build one in Oxford County. And they have made the usual promises to fund all sorts of worthwhile causes with their proceeds.

But where will those proceeds come from? Mainers who enter with full wallets and leave with empty ones.

Mississippi Casino Revenue Slips In September

Mississippi Casino Revenue Slips In September

September was a month that many states looked to with the hope that casino revenue may finally turn around. Mississippi, however, became the latest state to announce that revenue declined in September from the same period a year before.

Last year at this time, the recession was in full swing and the economy in the US was crashing. It was the middle months of what has been one of the worst economic meltdowns in US history. The casino industry was ravaged by the economy and had revenue declines in nearly every state.

That would have made it easier for casinos across the country to improve their revenue this year, but so far it has not happened. In Mississippi, casino revenue was down 2.8% compared to September of 2009. The total revenue was $186.6 million, compared to $192.2 million the year before.

"The casino industry is slowly recovering and figures are starting to look better than they were in the early part of the year," said Gaming Analyst Steve Schwartz, "But it still is going to take some time to fully recover. Casinos may not see revenue increases again until early next year."

While Mississippi casino revenue was down in September, it was hardly as bad as it has been in other areas of the country where casino gambling is prevalent. Atlantic City has experienced double digit revenue decline for many months in a row.

One area of the world where casino gambling is still thriving is Macau. The new gambling capital of the world has posted some gaudy numbers in the past few months, and their third quarter revenue figures far exceeded expectations.

Sucker's Bet

Opinion: When it comes to gaming, don’t bet on the politicians
Posted in Opinion on Thursday, October 22nd, 2009 at 7:14 pm by Alan Kerr

REMEMBER WHEN GOV. RENDELL and gambling proponents launched their lobbying effort to legalize slot machines in Pennsylvania? The state’s horse racing industry was limping along like a plow horse down the back stretch, they claimed, and only the addition of “limited” games of chance, i.e., slot machines, at the tracks could save them from extinction.

Seems like forever ago since the governor and his allies made their plea, doesn’t it? Might as well be. Their glue factory scenario turned out to be a foot-in-the-door strategy to add the commonwealth to the list of states where losing your money in a slot machine is legal and eventually pave the way for table gaming as well.

The state’s charade continued with the promise that the tax proceeds from legalized gambling would allow the state to significantly cut school property taxes. There have been some tax reductions as a result of slots. But significant reductions? Hardly. In most places, a couple of hundred dollars on a tax bill of a few thousand. Meanwhile, school taxes continue their upward creep.

Now, earlier predictions of expanded gambling beyond slot machines have come to pass. As part of the recently enacted state budget - 101 days late if you’ve forgotten - games such as poker, black jack, roulette and craps have been legalized, and work is already ongoing at several venues on the new “full service” casinos intended to rival those in Atlantic City and Las Vegas.

Unlike the deceptions of the past, lawmakers didn’t try to justify expanded gambling by saying it was going to help cut taxes or do some other specific good that might soften the opposition of gambling critics. No, the new flow of gambling money will be used to plug a hole in the state budget. Pennsylvania will henceforth rely on revenue from the casinos to balance its books and very likely increase state spending. And that’s wrong, according to Democratic state Rep. John Galloway of Lower Bucks.

Galloway’s fellow lawmakers from the lower part of the county, Republican Sen. Tommy Tomlinson and Republican Rep. Gene DiGirolamo, have put forth bills to guarantee Bensalem and Bucks County get a share of gaming revenues. Tomlinson is concerned that Pennsylvania not set the tax rate on casinos too high, fearing that could scare away some casino interests.

Galloway says that’s the wrong argument. “Whatever number we come up with (as a tax rate) is not high enough for me,” said Galloway, who recognizes that the goal of legalizing gambling “to significantly cut property taxes is a failed promise.” He said table game revenue should not be headed for the state’s general fund but rather should go to making good on the property tax pledge.

That’s not going to happen. More than likely, lawmakers will use the increased revenue from casinos to expand the budget, not reduce it or give property owners a bigger break. That’s just not in the nature of politicians.

Too many promises have already been made and broken since the state got into the gambling business. Want to put money on whether future actions by the Legislature and the governor vis-a-vis gambling are in the best interests of the taxpayers?

That could be called a sucker bet.

Why Massachusetts casinos are a bad idea

Why Massachusetts casinos are a bad idea
October 22, 2:02 PM
Worcester County Nonpartisan Examiner
Brian Ashmankas

The state legislature will here testimony today on several proposals to build casinos in Massachusetts. The likely sites for the proposed casinos will be Palmer, Milford, and Auburn.

I believe that these proposals should all be voted down. Those wishing to build casinos claim that casinos will bring jobs, tourism, and economic growth. They also emphasize their potential to cover the current Massachusetts budget shortfall through the heavy taxes that are usually levied on casino's huge profits. However, these benefits are both exaggerated and overshadowed by the massive costs to all Massachusetts residents.

Practically, this is the worst time to build casinos. Atlantic City has recently reported a 19.8% loss in profits, while the Las Vegas strip has reported 57.3% drop in profits. Even Foxwoods and Mohegan Sun have experienced declining profits of late.

New casinos in Massachusetts would likely also experience these reduced profits. Less profits means less revenues for the state, which essentially debunks the primary argument for the casinos in the first place.

Meanwhile, it is important to note that the revenue that the state would earn from casinos doesn't appear magically; it has to come from somewhere. In fact, state casino revenue constitutes a tax that is more regressive than the sales tax, because 60% of casino revenues come from people making less than $25,000 per year.

Of course supporters will continue to point to the economic development, jobs, and tourist revenue that the casinos will bring to the local areas. However, these benefits are at best half-truths and at worst outright lies.

It turns out in fact that while casinos sometimes result in some initial economic growth, over time their tendency to out compete local businesses and thus bankrupt them, results in no long term net gain in economic growth, while destroying the defining characteristics of the area.

With local businesses closing, job growth would also at best remain stagnant, while job choice would decline. With the casino offering the only jobs in town, it become a monopsony in the labor market, driving down wages, benefits, and quality of work for those forced to work there.

The attraction of tourist revenue is perhaps the most ridiculous claim made by casino advocates. Patrons of resort casinos rarely spend any money outside of the casino as food, shelter, alcohol, and entertainment are all provided by the establishment. In addition, they often leave the casino with nothing to spend elsewhere.

While the benefits are casinos are fleeting and overblown. The costs are overwhelming. Crime skyrockets in the area surrounding a casino, often extending to include the entire county in which it is present. Burglary, assault, auto theft, robbery, larceny, and rape all experience dramatic leaps in occurrence whenever a casino opens in an area.

For all these reasons, I implore my readers to contact their state representative and state senator and call on them to oppose these measures. If a casino is built in Auburn, all nearby towns will be affected.

To those who say that the casino revenue, despite being collected unjustly and at the expense of everything we hold dear, is necessary to keep Massachusetts fiscally sound, say that they should take this recession and budget shortfall as an opportunity to weed out unnecessary spending and outright waste. After all we are all doing the same with our personal finances.