Hell of a header on this Globe story today – “Casino Study Backs Patrick.” The lede’s even better: “Governor Deval Patrick’s promise of thousands of new jobs and billions of fresh dollars would come true if three state-licensed resort casinos are opened across Massachusetts, according to a long-awaited Greater Boston Chamber of Commerce study released yesterday that largely bolsters the governor’s economic case.”
But, for a better summary of what the Chamber’s much-discussed report actually says, you’d have better luck looking to Dan Kennedy – “Casino Supporters Support Casinos.”
I understand that some of the issues we’re dealing with here are tricky. And I’m a reporter, so math does scare me, too. But you can’t write off the costs just because the Globe editorial board does.
If you chase down half the “opponents say” caveats in today’s front page story, you’ll find a much different scenario at play than all the governor’s promises being fulfilled. You’re left with, as I termed it earlier today, a cost-benefit analysis without the costs. A benefit analysis.
And that doesn’t do much good when the argument against Deval Patrick’s casino plan hinges on the fact that the costs aren’t immediately obvious, but they’re very real, and they erode the benefits remarkably quickly.
First off: Rate of return. For every dollar residents pump into the Lottery, towns immediately get $0.24 back in local aid. Of every dollar residents would drop into a casino, they’d recoup $0.03 or $0.04. So casinos aren’t just inefficient as a means of delivering local aid (or property tax relief and transportation funding) – they’re, at best, eight times less efficient than the Lottery. And if you want to make up that difference, you’d better open up those wallets wide.
Dan Bosley, who co-chairs the committee examining Patrick’s casino bill, sent a letter to his colleagues this afternoon in which he called the Chamber’s study “flawed” for relying on research from the casino industry and Clyde Barrow. “While I question their conclusions,” Bosley wrote, “there has never been a question over the creation of a revenue stream from casinos. If you build them, people will spend money. However, there is a vast difference between revenue and economic development and the administration fails to realize this.”
What the administration has never admitted, and what the Chamber report and the stories regarding it ignore, is the fact that the money going into casinos is not new to the economy. It’s transferred from within the economy – as if in a shell game, if you will. The greater the share of money coming from areas close to the casino, the greater the shift away from local businesses and towards the casino will be. That’s why Patrick favors destination casinos over slots – to minimize economic cannibalization.
The number in the Chamber report that should terrify casino proponents – a number that’s been ignored in the press so far – is the study’s contention that, of the $2 billion – $2.3 billion in annual gross gaming revenue that three local casinos would generate, only $500 million to $550 million would be coming from out of state.
So, if three-quarters of casino revenue would be coming from in-state, and, as the Boston Federal Reserve has said, up to three-quarters of money spent in a casino is already spent inside the economy … uh, that’s not good.