Do casinos deliver on their promises of jobs and taxes? Or are casinos selling snake oil?
Depends on who is responding. That it works in Las Vegas is evident. Atlantic City? You can make an argument either way. You can find casinos that deliver and casinos that don’t, which does not cast aspersions on the basic premise of do they or don’t they.
The New York Times report focused on the third license most believe will end up in Manhattan somewhere. Or the Bronx. But probably Manhattan. Which brings back the opening premise—do casinos deliver on their promises?
Casinos rarely set up shop in the center of a large city. Take Philadelphia. Live! Is in South Philadelphia, far from the center of town. Rivers is closer but still not in the heart of the city.
On the downside of the casino debate is the impact on existing businesses, crime, and gambling addiction. Bars and restaurants shuttered in Atlantic City as a result of similar places inside casinos. The local eateries couldn’t compete with the free meals handed out by casinos. Yet, other restaurants have thrived. The Knife and Fork. Dock’s Oyster House. The Irish Pub.
With three casino licenses spread out over the exceptionally large area that is regional New York, the impact on other businesses is muted. That jobs are created there is no dispute. Most are low-wage jobs, for sure, but some are tipped positions and all full-time jobs come with benefits and other perks. Some are unionized with union benefits. Other positions—floor supervisors, accountants, executive assistants, a bunch of vice presidents, and other back-of-the-house positions—bring home a higher salary.
Taxes reflect how much is gambled and how successful a casino may be.
“You will see projections from casino operators that need to be taken with a grain of salt,” said Enrique Zuniga, who served on the Massachusetts Gaming Commission, the state’s casino regulator, when a new Wynn Resorts casino was approved and opened near Boston. “The important thing is, are the city and the state positioned to benefit regardless?”
The coronavirus pandemic took a severe toll on the casino industry as it did on so many others in the realm of entertainment, be it restaurants, movie theaters and casinos.
But casinos have rebounded. Gambling revenue reached record highs last year, according to the American Gaming Association. But many have yet to reach pre-Covid levels.
Still, the pandemic effect, while rare, confirms how difficult predictions can be. Lucy Dadayan, a senior research associate with the Urban Institute, believes any benefits derived from casinos are short-lived, and the only way to keep taxes rolling in is to expand the types of gambling—online gambling and sports betting, for example—or open more casinos.
“When there’s a new casino opening around the corner, people go and try it for the novelty,” Dadayan said. “After some time, as short as one year, it wears off.”
Chicago is poised to give the novelty a try once they get past the NIMBYs.
A report by Spectrum Gaming Group indicated for a New York City casino to yield the maximum benefit, it would have to attract significant numbers of out-of-town visitors with a convention center, hotel rooms and restaurants.
One avenue under exploration is to bring in a high-end casino to New York, with high table limits, expensive hotel rooms and gourmet dining. Thus, being too expensive to the lower–income people in the city.
Of course, Encore Boston Harbor went that route and failed, then sought the local residents.
In addition to taxes, licensing fees are tempting to the state. Bidding for a license in New York begins at $500 million, far from chump change.
Expanding casinos can wipe out much of the revenue projections in other jurisdictions. Atlantic City crossed the $5 billion mark in gaming revenue in 2006. Then casinos opened in Pennsylvania, and you could hear the collective moan. New York will have a similar, albeit muted impact. Still, what keeps Atlantic City afloat is the density of casinos within a short proximity. Nothing like that exists in New York, Philadelphia, or any other location outside of a select few.
The two casinos, both of which are on the edge of the city and surrounded by large parking lots, had little impact on the “character of life” in Philadelphia, said Alan Greenberger, the deputy mayor for economic development.
“We’re a big city with two casinos, but we’re not a casino city,” he said. “And New York isn’t going to be a casino city either.”