Meetings & Information


Monday, February 1, 2010

The Ladder Approach

If you watch the expansion of gambling around the country, the mushroom pattern in the face of dwindling revenues, declining discretionary income and market saturation is clear.

Steve Norton, ever persistent suitor of all things Massachusetts from which no city or town is immune, who pretends to save us from ourselves while enriching himself from afar, posted this recently in response to my comments:

You mention Centaur, which is not in Bankruptcy, but has been
unable to pay interest due.
But you fail to mention the extraordinary
up front fee to Indiana of $250 million for 2,000 slots and a tax
that averages nearly 50%.

My reply:
The public is entitled to an explanation of how a company that has filed bankruptcy in one state and seeks to renegotiate its agreement with another is a viable financial entity in the Commonwealth of Massachusetts.
Beacon Hill would be remiss if it failed to protect Bay State taxpayers from the consequences of a "partner" lacking financial solvency.
Mr. Norton, your company agreed to the terms in Indiana and promoted slots at tracks as a solution, yet you now claim ---
"... you fail to mention the extraordinary up front fee to Indiana of $250 million for 2,000 slots and a tax that averages nearly 50%"

If you made a poor business decision, should a state bail you out?

This seems to portend your future dealings.

Bankruptcy is becoming another common tactic employed by the Gambling Industry to achieve its goals, expand its operations, renegotiate terms.

The following was found as part of the revelation of the tactics:

Another political tactic used to gain public approval is to understate
the extent of the gambling that is likely to occur after legalization.
Promoters do this by first introducing on limited and tightly regulated
plans for such ventures as riverboats and ships, and only later moving
on to larger, land-based operations. Nancy Todd, president of a consulting
firm specializing in political campaigns to expand gambling, suggests
this strategy, which she refers to as the "ladder" approach. "Gaming
can be limited to one or more metropolitan areas, rivers, lakes, bays or
oceans," she wrote in a 1994 article for a political campaign trade journal.

Todd, who helped run the campaign to legalize riverboats on Mississippi's
Gulf Coast, continued: "A good rule of thumb is to look at it as a ladder.
Areas that have no gambling at all warm up to the 'cruises to nowhere' as
the first rung of the ladder. The next step would be dockside. At the top
would be landbased casinos." **

Once casino companies gain a foothold in a community and people become
dependent on gambling for revenues and jobs, the casino owners can more
readily lobby for changes in gambling restrictions. They can, for example,
argue for more floor space devoted to gambling, the elimination of limits
on betting stakes, the legalization of new games, or the reduction of
taxes on their profits. As explained in Chapters 2 and 5, this has already
happened in a number of instances, such as with the casinos in Atlantic
City and with the riverboats in Iowa. Ventures that begin as low-stakes
gambling were soon changed to high-stakes gambling, casinos that were
restricted to certain games were allowed to add new games; in some cases
gambling ventures were even given government subsidies to keep them
in business.

** Nancy Todd, "Legalizing Gambling and Doing It Right," Campaigns and
(April 1994).

Taken from "The Luck Business," by Professor Robert Goodman, page 70.

The book was written in 1995 and the tactic has been employed successfully ever since.

So, you see, it is not simply just a FEW slot parlors, but an ever increasing infestation that Nancy Todd described. THEY know where they're going. YOU don't.

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