A casino -- comes with many costs

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No matter where, no matter what, proponents of Expanded Gambling use whatever cause will garner local support, costs be damned!

In this case? A STADIUM!

Potential stadium funding source -- a casino -- comes with many costs
Article by: THOMAS M. MENGLER

I was shocked to read in Sunday's Star Tribune that there is a feverishly building support for locating a casino at Block E. The story -- broken up by subheadlines extolling "Free parking" and proclaiming that "Something's needed" -- itself lends credence to a bad idea. Sunday's newspaper also reports Minneapolis Mayor R.T. Rybak, previously a "staunch opponent" of more gambling sites, now regards a downtown casino as the life raft for a new Vikings stadium in Minneapolis. City Council President Barb Johnson delights that a casino may be a great new source of revenue. Meanwhile, columnist Lori Sturdevant writes in the Opinion Exchange section that lobbyists may already have lined up a majority of Minneapolis City Council votes in favor.

How ironic that a short distance from the Occupy MN protests, some government leaders have launched into high gear to approve a supposed revenue stream that respected empirical studies suggest will be anything but. These several studies indicate that a downtown casino could disproportionately burden the city's poor, increase felony crime and impose greater costs, not increased revenues, on the city, the county and Minnesota.

If support for this casino is linked to a new Vikings stadium, then the working and jobless poor will pay much more than their fair share for professional football. In 1999, the nonpartisan National Gambling Impact Study Commission called for a moratorium on new gambling sites in America. Important to the commission was its finding that families who earn less than $50,000 a year contributed more than 80 percent of gambling revenue. Gamblers with annual incomes less than $10,000 spent almost three times as much on gambling as those with incomes of more than $50,000. How would this play out at Block E? With the site for a downtown casino just a few blocks from the city's hub of public transportation, low-income Twin Cities families will have greater access to casino gambling than ever before.

Credible empirical evidence also raises the specter of more-serious crime. In 2006, Baylor University Prof. Earl Grinols and University of Georgia Prof. David Mustard published a national study titled, "Casinos, Crime, and Community Costs," in the Harvard University- and MIT-sponsored Review of Economics and Statistics. Their study evaluated FBI "Index 1" crime in all U.S. counties between 1977 and 1996.

Grinols and Mustard concluded that casino counties experienced higher crime rates than did noncasino counties for six of the seven FBI Index 1 crimes: aggravated assault, auto theft, burglary, larceny, rape and robbery. Only murder did not show up more frequently in casino counties. Grinols and Mustard speculated that casinos draw criminals to the casino location to prey on casino customers and that casinos increase the number of problem and pathological gamblers, who then may commit economic crimes to pay for their addictions.

Yet another study by Grinols, cited in Sturdevant's Sunday column, concludes that the social costs that gambling imposes -- because of increased poverty, crime, family disintegration and lost worker productivity -- far outweigh any revenue gains to the city, county or state. Grinols' research would suggest that for every dollar our government collects from a casino tax, our social costs will total $6.

Of course, empirical studies -- like those I mention above -- warrant careful study before one decides that their conclusions make sense. Other states and municipalities are seriously studying the social costs of gambling, and our government leaders' next steps might be to see what others who have looked more thoroughly at the issues have concluded. But let me make a more provocative suggestion. We should all be encouraging our leaders to direct their attention to more productive inquiries: how to remodel local and statewide public policy so that it draws legitimate business and attracts real jobs to Minnesota's cities and counties. There's a new revenue stream worth getting excited about.

Thomas M. Mengler is dean and Ryan Chair in Law at the University of St. Thomas School of Law.

Casino Cure Delusional

Casinos and Crime: The Luck Runs Out

When it comes to crime, legalized casino gambling seemed to be a surprisingly good bet: Local unemployment went down, tax revenue went up and crime didn't increase when a casino opened. Some researchers even found that crime declined immediately after casinos came to town.

Well, the casino cure for crime proved to be just as delusional as gamblers' luck, says University of Georgia economist David B. Mustard.

Mustard and Earl L. Grinols of Baylor University analyzed crime data collected from all 3,165 U.S. counties in the United States from 1977 to 1996 and looked at local crime rates before and after casinos opened.

They found that crime didn't budge when a casino began operating -- at least at first. Crime began to rise after the first year, slowly at first and then more quickly, until it had far surpassed what it would have been if the casino had never opened. By the fifth year of operation, robberies were up 136 percent; aggravated assaults, 91 percent; auto theft, 78 percent; burglary, 50 percent; larceny, 38 percent; and rape, 21 percent. Controlling for other factors, 8.6 percent of property crimes and 12.6 percent of violent crimes were attributed to casinos, he said.

But what about all those casino jobs and newly minted police? Mustard said the positive effects of casinos are fleeting -- payrolls and tax collections quickly plateau, and municipalities don't keep adding cops after the first wave of casino tax revenue rolls in.

What's more, Mustard said, crime rates didn't rise in neighboring counties while they soared in casino counties -- evidence that casinos create crime locally and don't merely attract it from somewhere else.

And here's sobering news for those in the District and Maryland who think casinos would jump-start the local economies: "Even using conservative estimates of costs and generous estimates of benefits, we still find the costs exceed the benefits," Mustard said.