From United to Stop Slots in Massachusetts --
IT BEGINS...
On June 10, 2010 the RI House endorsed a bill to seek voter approval for converting the state's two slot parlors, Twin River in Lincoln and Newport Grand in Newport, into full-scale casinos.
Supporters see casinos as a way to raise revenue for the state and say Rhode Island could lose out if neighboring Massachusetts approves expanded gambling.
Are casinos nearing saturation? And is online gambling next?
August 3rd, 2012 by Ted Nesi
When Rhode Islanders go to the polls in November, they’ll be asked for the second time in six years whether to allow casino gambling in the state. Surveys indicate they’re likely to say yes, clearing the way for Twin River and Newport Grand to become full-fledged casinos.
The New York Times’ Michael Cooper has an interesting article [below] examining the gambling landscape up and down the East Coast, and raising questions about whether there’s enough demand to merit the industry’s continued expansion:
The rapid expansion of gambling, as recession-wracked states have searched for new sources of money, has transformed the industry. States that once enjoyed near-monopolies on gambling … have been suffering the most in the new casino-dotted national landscape. …
“The driving factor here is location,” said William R. Eadington, a professor of economics and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. “Other things being equal, people will choose the most accessible or convenient casino outlets. People who used to travel some distance no longer do.” …
The endless one-upmanship among states has some analysts wondering at what point the market will become saturated, and whether the industry has reached a point of diminishing returns. …Cooper also notes a new law signed in Delaware last month that made it the first state to legalize Internet gambling, which the feds are now allowing. Rhode Island officials are open to online gambling, and Delaware reportedly wants to partner with Rhode Island and West Virginia on some sort of online poker offering.
Some fiscal analysts wonder about the long-term benefits of casinos for state finances. “Gambling legalization and expansion during tough times produces significant short-term revenue increases in some jurisdictions,” a report by the Rockefeller Institute of Government found last year. “But if experience is a guide, such growth will not continue over time.”
http://blogs.wpri.com/2012/08/03/are-casinos-nearing-saturation-and-is-online-gambling-next/
States Up the Ante in Bid to Lure Other States’ Bettors
By MICHAEL COOPER
Published: August 2, 2012
Cash-hungry states have long tried to poach business from one another. Now many are stepping up their efforts to lure gamblers from their neighbors to their growing ranks of slot machines, leaving states like Delaware, which embraced gambling early, struggling to keep up in what has become a feverish one-armed-bandit arms race.
Gambling revenue accounts for more than 7 percent of Delaware’s general fund budget, making it the state’s fourth biggest revenue stream, ahead of its corporate income tax and gross receipts tax. But when new casinos in Maryland and Pennsylvania began to attract the gamblers who once fed quarters into Delaware’s machines, the state acted. First it legalized a form of sports betting. Then it allowed table games including blackjack, craps and roulette. But its gambling revenues have continued to fall.
So at the end of June, Gov. Jack Markell, a Democrat, signed a law that could make Delaware the first state to offer Internet gambling — giving its residents the chance to bet on video lottery games and online versions of games like poker, blackjack and roulette without leaving their homes.
The law takes advantage of a recent Justice Department ruling that reversed the federal government’s long-held opposition to many forms of online gambling. The law will also expand sports betting and Keno games, and give its three racetrack casinos — which lost 15.9 percent of their jobs last year, the biggest such drop in the nation — more money for capital improvements and advertising.
“If we had not approved gaming along these lines this year and put ourselves at the forefront, other states would have moved ahead of us and we would have been back in a year or two playing catch-up,” said Tom Cook, Delaware’s secretary of finance. He said that intense competition from Maryland and Pennsylvania was projected to drive down Delaware’s gambling revenues to $206.4 million in the year that began in July, from $248.8 million in the 2011 fiscal year.
The rapid expansion of gambling, as recession-racked states have searched for new sources of money, has transformed the industry. States that once enjoyed near-monopolies on gambling — including Delaware, which legalized slotlike machines at its racetracks in 1994, and New Jersey, which opened the nation’s first casinos outside of Nevada in 1978 — have been suffering the most in the new casino-dotted national landscape.
Atlantic City’s casino revenues have fallen by more than a third in recent years, according to an analysis by the Center for Gaming Research at the University of Nevada, Las Vegas. Pennsylvania, which opened its first casino in 2007, is overtaking New Jersey by some measures: over the past year Pennsylvania has taken in more slot machine revenue than New Jersey, according to Shawn K. McCloud, the vice president for analysis at Spectrum Gaming Group, a gambling research and professional services firm.
“The driving factor here is location,” said William R. Eadington, a professor of economics and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. “Other things being equal, people will choose the most accessible or convenient casino outlets. People who used to travel some distance no longer do.”
The competition between the states can be fierce.
After New York City opened its first casino last year at the Aqueduct racetrack in Queens, Atlantic City hotels began advertising in New York’s subways. The Mount Airy Casino Resort, in the Poconos, broadcasts commercials on New Jersey cable channels and has billboards in Atlantic City and in the New York City area. One says “Less Time In Traffic, More at the Wheel,” and shows a roulette wheel.
“The billboards are strategically placed as you exit the tunnels and bridges out of New York City into New Jersey,” said John Culetsu, the Mount Airy resort’s executive vice president and general manager. He said that 52 percent of the players in the casino’s loyalty program come from New York or New Jersey.
But some of Pennsylvania’s new casinos are now facing newer competition: Cleveland opened its first casino in May, competing for some of the same players who now gamble in Erie, Pa., less than two hours away. More competition is on the horizon: a special session of the Maryland legislature will consider expanding casino gambling, adding table games at existing casinos and allowing a new one to open near Washington — which state officials say could bring in millions of dollars in new revenues. In New York, Gov. Andrew M. Cuomo has proposed expanding gambling. In New England, Massachusetts’ plan to open several casinos is worrying the operators of casinos in Rhode Island and Connecticut.
The endless one-upmanship among states has some analysts wondering at what point the market will become saturated, and whether the industry has reached a point of diminishing returns. Casinos are using other come-ons to try to lure gamblers — some Atlantic City ads remind people that its casinos are, in fact, on the beach, while Mount Airy plays up its Poconos location, large spa and restaurants.
Some fiscal analysts wonder about the long-term benefits of casinos for state finances. “Gambling legalization and expansion during tough times produces significant short-term revenue increases in some jurisdictions,” a report by the Rockefeller Institute of Government found last year. “But if experience is a guide, such growth will not continue over time.”
Casinos in Delaware continue to warily eye the expansion in neighboring states. One of its casinos, Dover Downs, said in its 2011 annual report that 42 percent of its winnings came from Maryland residents.
Delaware’s move online will focus only on state residents — there is some debate over whether the Justice Department ruling allows Internet gambling only within states that approve it or between states. Given Delaware’s population — it has fewer than a million residents — the pool of potential online gamblers is on the small side. But some gambling experts say the reverberations could be big.
I. Nelson Rose, a professor at Whittier Law School in California who writes a blog called Gambling and the Law, predicted that it would spur other states to follow suit, and he noted that Nevada has also taken steps toward online gambling. “I think Delaware’s move really pushes New Jersey to legalize,” he said. “And when you have Delaware, New Jersey and Nevada, then next year Iowa will legalize.”
A version of this article appeared in print on August 3, 2012, on page A13 of the National edition with the headline: Casino Boom Has States Looking to the Internet For Gambling Dollars.
The first comment after the NYT article says it all --
Perfect example of how so much of government exists to support itself, not to serve the people.
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