We're a long way from getting a casino in Rochester, but the idea keeps raising its head –currently by the governor himself.
So I keep poking around, collecting studies on the impact of casinos on their communities. And my conclusion, based on what I keep finding, is that any municipality thinking about embracing a casino ought to be very, very careful. And very, very skeptical.
Governor Cuomo sings a common refrain as he justifies his enthusiasm for casinos: they're an economic development tool. They create jobs.
And yes, they do create jobs – in the casinos. Nearby, though, based on what I've read, the story isn't necessarily as good. Casino operators like to keep their customers captive, so they offer more than gambling. Large casinos often include a hotel and restaurants. And they often offer low hotel rates and deep discounts on food, making it hard for nearby businesses to compete.
For casinos operated by Indian tribes – the only kind, under state law, that could be opened in Rochester – the competition would be even tougher. Those casinos are tax exempt.
A 2004 study by Rochester's Center for Governmental Research – done for the Wilmorite development company when it was interested in creating a casino in Rochester – found that there could be some positive economic benefits, in job creation and in revenue for the city.
But CGR qualified its findings carefully. For instance, it predicted that "the social cost burden" – social costs associated with an increase in gambling – could be as high as $10 million annually.
CGR also noted that Rochester would be entering the casino business late, behind a fair number of existing operations in western New York and Canada. That would make it harder to attract people outside the Rochester area. And while a local casino might attract Rochesterians who had been going to Turning Stone, Buffalo, or Niagara Falls, the CGR report said, it might also take customers from other local entertainment venues.
And, the CGR report said, if the casino included restaurants and retail offerings, "existing downtown food, drink, and retail establishments are likely to suffer a loss of business, with a cascading impact on property values and property taxation."
And if the casino included a hotel? That "would very likely increase vacancy rates among existing facilities," CGR said, "and reduce hotel and motel tax receipts."
More recently, in a 2011 study of the possible effects of Indian-run casinos, Niagara University associate professor Steve Siegel predicted that if the Seneca Gaming Corporation created the casino it wanted in Buffalo, the result for the city would be a net job loss. Based on a study of SGC's financial figures, Siegel concluded that "if a full-service casino is constructed anywhere within the City of Buffalo, the impact on the lodging, food, and beverage and entertainment industries will be devastating."
It's disconcerting that the governor is so enamored with casinos as an economic development tool for New York State. I know, I know: when New Yorkers go to other states to gamble, we lose money to those states – money from taxes, money from food and beverage sales, money from hotel stays and payroll. Cuomo wants to bring that gambling and that money back home, and create some jobs in the process.
I get that argument. But honest to goodness, with the number of casinos that'll be opening in this state, we'll be spreading the gambling benefits pretty thin. And we'll add some social costs that the other states are paying now.
And New York State gets plenty of benefits from out-of-state residents who come here as tourists and convention goers.
Besides, isn't it kinda sad that as we scrape around to try to replace Buffalo's steel industry and Rochester's Kodak jobs, a state that was once proud to be known as the Empire State is reduced to dreaming of casinos as an economic engine?
Casinos do create jobs – in the casinos. Nearby, though, at competing hotels and restaurants, the story isn't necessarily as good.