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Why Casinos Are Bad For Business

Family Policy Matters / NC Family Policy
The Truth Network Radio
March 22, 2014 12:00 pm

Why Casinos Are Bad For Business

Family Policy Matters / NC Family Policy

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March 22, 2014 12:00 pm

NC Family  president John Rustin talks with economist John W. Kindt, professor of Business and Legal Policy at the University of Illinois at Urbana Champaign,  about the economic impacts of casinos and casino gambling on the communities in which they are located.

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This is family policy matter program is produced by the North Carolina family policy Council of profamily research and education organization dedicated to strengthening and preserving the family, and often the studio hears John Rustin, president of the North Carolina family policy Council, thank you for doing it this way, profamily policy matters. We are pleased to have Prof. John Willis on the show is a professor of business and legal policy at the University of Illinois at Urbana-Champaign. He is a nationally recognized expert on the economic impacts of gambling and has served as senior editor and contributing author of the US international gambling report is academic research and publications have contributed to the enactment of the 1999 National gambling Impact study commission US unlawful Internet gambling enforcement act of 2006, and various other federal and state statutes. Prof. Kent is with us to discuss the economic harms of casino gambling and particularly rock casinos are generally bad for business. Prof. Is great to have you with us on the show. We appreciate your time like you're having a back of my colleagues and I really appreciate your efforts to inform and educate the public on issues well. We appreciate your help in enabling us to do that through the great research that you have done and others across the country. Now casinos are sold to the public as an economic stimulus for hurting communities and in fact we are hearing this argument from proponents of a plan by the South Carolina base, Catawba Indian nation to build an enormous gambling complex here in North Carolina along Interstate 85, about 30 miles west of Charlotte in Cleveland County.

Now you have conducted research demonstrating that gambling actually has and I quote a zero-sum economic effect. Dr. Kent, can you explain this and help us understand in general terms, and will get into the specifics more in a little bit, but in general terms how casinos actually harm local economies rather than create an economic boon. Well first of all, it would be nice for her to be able to say that this gambling is actually an economic benefit that we studied it for years and it's a lose lose for everybody except the owners of the top of the casino or the gambling enterprise and I'm Robert talking with our former US Sen. Paul Simon. 20 years ago the enemy and we indicated this because although I was one of the first there gambling stage Scripture about casinos and golf course in land-based and he established the US National gambling Impact study commission, which was supported by your congressional delegation, and 90% of the US Congress and data center assignments and we thank you.

Academics are right when you say this is lose lose for everybody but the we need a yet US government.

The commission which will look into this and all sides of it. And guess what. They confirmed what we were say and that really among academics.

It should pretty uniformly stated that this is lose lose for the economy. Why was because all this money is being dumped into gambling machine slot machines in particular instead of going into buying cars, refrigerators, consumer goods and even food and clothing. You pointed out in your studies that the social economic cost of gambling actually outweigh the benefits by as much as three give us some examples. If you would apply.

This is the case, will start exclusively my numbers over. We studied this, but always across the country, including college out of the University of Nevada Las Vegas have indicated that the social cost far outweigh the benefits. It's like legalizing a cocaine or heroin to create a few jobs you can create an economic/social cost of legalizing these hard drugs is actually Colombo.

Everybody knows that but they don't all that about gambling, so the studies show that new gambling legalized.

Like actually creates what we call the social costs of ABCs that a Stanford new addicted gamblers like drug addiction, doubling around the area where the casinos are the gambling facilities located agrees to enter new bankruptcies up 18 to 42% as people lose their money personally, professionally and small businesses and large businesses in deceased Internet crime increasing 10% around Lisa gambling facilities and increases 10% every year. While these costs are least three dollars for every one dollar in benefits. In the case of tribal casinos not getting any tax benefits really much at all. So the costs are really enormous local officials in Cleveland County, including the local Chamber of Commerce came out very early in support of this casino proposal, citing the anticipation of jobs and economic prosperity that would result does your extensive research tell you a casino like this would have on the local businesses in and around Kings Mountain, North Carolina, Cleveland County and the surrounding region. While I travel through looking at all the time.

We have brought relatives in Georgia and that I would just take a look across the border to South Carolina.

South Carolina had widespread legalized slot machines. About 1520 years ago and those cannot imagine getting Impact study commission, as really hurting the economy. As we indicated, amongst other things pretty only social issues and Gov. David Beasley, former governor. Now we criminalized all of those slot machines are just thrown out of the state and people need to remember that the modern day casino is really all about slot machines.

90% of the money going into casinos. Today's going into slot machines. Machines are known by the national commission and academics everywhere as the "crack cocaine creating new addicted gamblers flow that creates new social cost of the social culture reflected in the business community just doesn't work.

From a business standpoint and to exemplify this if you take the average slot machine that brings in $100-$300,000 in lost consumer spending per year. Actually, the multiplier effect. It's well over $300,000 per year.

It's not being spent on cars, refrigerators, and even food and clothing. The necessaries of life and the taxpayers have been picked this up with people lose all their money slot machines that businesses are losing this money is consumer spending out of the economy suffered each one slot machine that you have which is draining $300,000 or more per year out of the economy. Losing one job consumer economy.

So basically it's a lose lose for everybody no real genuine debate about this anymore and it's really unfortunate and disturbing that local governments are enamored with these promises of revenues, which are largely bogus seems to be very similar to what our state experienced a number of years ago with the empty promises of the state lottery, and that the lottery would be a great boon for education and provide all this benefit for the state and in fact what we have seen come to fruition is that the lottery funds supplant instead of supplement existing education funding and resulted in lots of different types of economic and social problems very similar to those that you have thus far described name the water lottery for a slow form of gambling and if you haven't noticed the lottery directors are trying to push more and more toward Cano and slot machine types of gambling where people can gamble faster because they realize that these faster forms of gambling are more addictive and sort the constant push toward more and more and faster and faster gambling. What kind of impact will the casino have on local property values.

For example, well would you like a garbage dump located near body or a nuclear waste dump located nearby. I mean, it is generally going to hurt property values and the other huge thing to remember about it. Tribal casino is that they're going to try to locate on tribal land. They're going to call themselves sovereign nation, and there is a huge body of tribal Indian Indian law which indicates that basically the tribes can do anything they want to on their own land, and the argument is that due process and other constitutional safeguards do not apply with regard to tribal casinos to local businesspeople.

In many instances it had trouble collecting finances from the local tribal members because they don't have to pay. They don't want to and if you try to sue the tribe. Basically wind up in the tribal court. Well the tribal court has its own rules under tribal traditions and those tribal traditions do not comply with a constitutional safeguards in the normal judicial processes so businesses are going to have a real wake-up call and what once a day. Tribal casinos located in the area.

It's a huge problem for businesses and governmental entities because of your governmental entities are so misled. This initial stage.

Just imagine what's going to happen when political contributions legal political contributions start being made and we have seen that in North Carolina with the Eastern band of Cherokee Indians in the western part of the state or State Board of elections has determined is not a corporation and therefore is able to make political contributions to candidates for office, so their MMA are one of the largest political action committees that exists in the state, but in addition to being exempt from local property taxes, and things of that sort. One of the ways the casinos on local economies and tribal casinos in particular, is by increasing social service needs and costs. Dr. Kent. What are some examples of the social harms that come from casino gambling as well as the related cost that will inevitably be borne by local citizens through tax increases or other means. Well, people should Matt visualizes as doubling the gambling addiction rate in their city, County, state and locales. That's an easy way to visualizes what would happen if we just overnight doubled the number of addicted people on drugs will that's what gambling does. Again, these are the national statistics from the National gambling Impact study commission, indicating that gambling addiction is like get drug addiction and that in fact it doubles once you bring gambling into the area by means of electronic gambling that is the slot machines, electronic gambling devices.

If you could speak today with local elected officials and business leaders in Cleveland County, North Carolina.

What advice would you give them about this casino proposal. Why would say that they needed really do their homework and look at the National gambling Impact study commission and the congressional testimony which is included in the multivolume blocks of United States international gambling report, which was put together just to help government officials decide these things have really been misled by these the PR statements of the gambling interests and they should also remember that when you're testifying before Congress and before state legislatures and when you're putting together these commissions and testifying before them the numbers and I'm giving you part numbers which have been confirmed under oh this is sworn testimony before US Congress and in traditional and other body this is. These are not public relations numbers. Now the gambling interests have gotten Williamson billions of dollars to pursue a public relations interest.

That's one reason why Sen. Paul Simon wanted the US National gambling Impact study commission and it's just amazing how the gambling industry's numbers change when they have to testify under oath that a lot of their numbers are simply sophomoric.

They don't stand up and that they don't even mention of when they have to do that when they have to prove their numbers under oath, so people need to really be skeptical about this really do their homework, they can go online to find a lot of this information and it's really disturbing that with so much of this information out there on the web and elsewhere that government officials are still being allowed to claim this is economic development when it's not.

And there's there's multiple information to support that professor were unfortunately out of town for this week I want to thank you so much for lending your expertise and insights on this very very important topic and for joining us once again on family policy matters. We greatly appreciate your time like this. Family policy matters.

Information and analysis, future North Carolina family policy Council join us weekly for discussion on policy issues affecting the family. If you have questions or comments.

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