Tag Archives: gambling

Pete McMartin’s Series on BCLC and the Edgewater Casino

Pete McMartin of the Vancouver Sun has been working on a superb series of articles about the BC Lottery Corporation, the planned Edgewater mega-casino, and the way the BC government has been leaving charities out to dry—the very charities used by the BC government to justify its massive gaming expansion.

We will keep updating this list of articles by McMartin, so check back regularly.

Charities reeling from steady erosion of gaming grants

Huge gaming grant cuts don’t apply to BC Lottery Corp offices

How B.C. Lotteries came to pay $400 million to casinos

Is it time to take a step back from the gambling table?

Advice to B.C. charities: Move to Alberta


Massachussetts Senator Sue Tucker demolishes pro-casino arguments in 2009 hearing

[youtube=http://www.youtube.com/watch?v=kXRh9nOrG_Q]

Testimony of Senator Susan Tucker at the Oct 2009 Hearings on Expanded Gambling in Massachusetts.

All of Senator Tucker’s arguments hold as true for Vancouver as they do for cities in Massachussetts. Tucker has worked on this issue for years. She was recently featured on CBS’ news program on gambling expansion in the US, which is also worth watching.

Excerpts:

“[The casino industry] doesn’t work because it costs too much. The proponents throw out the $200 million number.

Start subtracting!

We need cost benefit numbers! We need to know how much the new bureaucracy is going to cost to enforce the new laws that our own Attorney General said we must have before we even consider casinos. Criminal activity laws, wire-tapping, money-laundering, new laws. Who’s going to be hired to audit and oversee the gambling? It’s a very expensive proposition. And the words and the money that gets thrown around here about what we’re losing to Connecticut, let me tell you, if every dollar that went down a Connecticut slot machine went down a Massachussetts slot machine, and we taxed them at the same percent, about 25%, Massachussetts would get a grand total of about $93 million. But the ten percent hit to the lottery [that casinos will bring] is $80 million dollars. It will cost us at least $30 million to set up a new bureaucracy – you’ve already spent the money!

The proponents do not have the numbers.

And we haven’t even addressed the addiction problem.

… [T]he problem is that a lot of people promoting this don’t understand what the new slot machines are, how they are designed, and what the industry does. Basically the machines are designed to see every customer as a potential addict. These machines are built with virtual real mapping to make people think they almost won, and to put people in a zone, similar to a drug zone, and this has been testified to by psychiatrists, by neurobiologists, by people who understand the nature of addiction. I object to the state partnering with an industry that makes its profit on addiction. I don’t think that is the job of the commonwealth of Massachussetts. We have choices about where we grow jobs in Massachussetts.

You think you have control over this industry. You don’t. Whatever you put in that bill to sell it to your colleagues, the deal will change within two or three years. Now how do I know this? Because it happens everywhere. The casinos come in; “Oh we won’t be predatory, we’ll put debt limits on so people can’t gamble more than $500 an hour.” Within two years those debt limits are gone. Why? “Oh, we can’t compete!” They negotiate for a lower tax rate than they come in promising, they change all the practices that you might try to put in to make them less predatory, they fight them, you can’t control it, you can’t control where they’re located. So I suggest to you that this is very, very dangerous, and bad timing in this economy to even consider this proposal.”

Expanded Gambling is Bad for Local Businesses

The following article was written by US Senator Jamie Eldridge. The article cites some reputable studies from reputable economist professor Earl Grinols.  We have no evidence as yet that gambling improves the economic climate for neighbouring businesses.

“People will spend a tremendous amount of money in casinos, money that they would normally spend on buying a refrigerator or a new car. Local businesses will suffer because they lose customer dollars to the casinos.”

– Donald Trump, casino owner[1]

Casinos will hurt local restaurants, hotels and entertainment businesses. Money that would otherwise be spent at locally-owned small businesses will instead be dumped down predatory slot machines owned by out-of-state corporations. Massachusetts dollars are shipped far away to wealthy owners and investors, and little of that money is being reinvested in the local community.

Casinos and slots won’t help locally-owned tourism businesses. Casinos will divert tourists and residents away from local historic, cultural, and natural attractions from Cape Cod to the Berkshires, hurting businesses that rely on those visitors. To the extent that people do travel to Massachusetts for a resort-style casino, they’ll stay at a casino hotel, eat at casino restaurants, and go to casino-sponsored entertainment events. Casinos drain money from the local economy.

When discretionary income is spent on gambling, local businesses suffer. Consumers have less money to spend on clothing, electronics, furniture, automobiles, or any other locally-sold product. A study on the costs and benefits of casinos found that for every $1000 in increased casino revenue, businesses up to 30 miles away lost $243. [2]

Job growth in the casino industry will lead to job cuts elsewhere. As the Boston Business Journal notes, the claim that casinos will create 20,000 new jobs “is bogus because the diversion of billions of dollars into one sector is destined to cause job losses in other sectors”.[3]

Expanded gambling hurts worker productivity. Local businesses can anticipate increased personnel costs due to increased job absenteeism and declining productivity of workers.[4]

Expanding gambling is not an effective economic development strategy. It drains money from local economies, hurting local businesses. As the Wall Street Journal notes, “a growing body of research and experience suggests the odds are not stacked in the state’s favor”[5] when it comes to economic development. There are better strategies for creating jobs and promoting economic growth in the Commonwealth that don’t come with the significant downsides that casinos bring.

[1] “The Jackpot State.” The Miami-Herald. March 27, 1994

[2] Grinols, Earl L. Gambling in America Costs & Benefits. Cambridge University Press, 2004. Pg. 77.

[3] “It’s all about the money.” Boston Business Journal. December 21, 2007

[4] Grinols, Earl L. and David B. Mustard. “Business Profitability versus Social Profitability: Evaluating Industries with Externalities, the Case of Casinos.” Managerial and Decision Economics. 2001. Pg. 151.

[5] Whitehouse, Mark. “Bad Odds.” Wall Street Journal. June 11, 2007.

Costs of Gambling – comprehensive study

The following study is available at Casino Watch, a US website providing resources and research on the casino industry in North America. (You may also be interested in the Oregon site “PACT: People Against a Casino Town.”) The following study was conducted in the 1990s at the University of Illinois:

“Business Profitability Versus Social Profitability: Evaluating Industries with Externalities, The Case of the Casino Industry”

By Earl L. Grinols and David B. Mustard
Download the PDF

 

Abstract

Casino gambling is a social issue, because in addition to the direct benefits to those who own and use casinos, positive and negative externalities are reaped and borne by those who do not gamble. To correctly assess the total economic impact of casinos, one must distinguish between business profitability and social profitability. This paper provides the most comprehensive framework for addressing the theoretical cost-benefit issues of casinos by grounding cost-benefits analysis on household utility. It also discusses the current state of knowledge about the estimates of both the positive and negative externalities generated by casinos. Last, it corrects many prevalent errors in the debate over the economics of casino gambling.

Highlights

At the conclusion of its investigation, the commission recommended a national moratorium on the expansion of gambling and more study of gambling’s effects, costs and benefits, before making further decisions about it.

Many studies pay a great deal of attention, for example, to estimating the number of direct and indirect jobs that casinos create and to tallying the taxes casinos pay, but do not explain the social value of an additional job or calculate the lost taxes of competing non-casino businesses.

For example, the effect of casino gambling on firm profits should be summed over all firms, not just casinos. The increased profits of the casinos should be netted against lost profits of other firms that compete for consumer spending.

If casinos temporarily reduced unemployment faster than it would have fallen otherwise, this transitory effect could correctly be counted as a benefit of casinos. However, we know of no study that has made this case.

Although casino profits and taxes are highly visible, they are invalid measures of social benefits because they do not adjust for the entire economy for the lost profits and taxes of competing businesses.

Continue reading

Proposed expanded Edgewater Casino thinks it can compete with Singapore for big gamblers from China?

“Destination casino” – that’s how the BC provincial government and Vegas gambling corporation Paragon Gaming plan have designated the proposed new Edgewater complex. What does this mean? It means that the casino complex intends to reach its projected revenues, the casino would have to attract significant gambling tourism, not just locals. In the case of the Edgewater Casino, a large fraction of the the targeted market is supposedly wealthy gamblers from China. There are a number of troubling issues associated with destination casinos, and we’ll deal with those at the end, but the first question we are asking here is this: has the BC government really thought out whether this “destination casino” can really do what it says it can and attract these gamblers? Because it’s very unlikely that it can deliver. Consider just one of many competing mega-casinos:

Singapore, which is a world leader in planning and which very carefully designed its casino industry to market almost exclusively to tourists and very wealthy clientele;

Singapore, which has almost the lowest crime rate in the world, strict and well-funded policing and zero tolerance for gang activity;

Singapore, which wants the Asian/Chinese high-roller gambling dollars that we naively think we can compete with them for;

Singapore,which is only a short, low-cost flight away from Hong Kong or China.

And when you get to Singapore, you get this:

Do BC and Vancouver really think we are going to induce the Chinese big spender to come halfway around the world to be impressed by this?:

Now, let’s look at other issues associated with mega-casinos.

What we sometimes hear from our elected public officials on this topic goes like this: “oh, the new casino isn’t in a residential area, and lots of cities have them.”

Wrong.

Ask the False Creek Residents Association whether or not they agree that this is not a residential area! And this district is extremely close to both Yaletown (2 minute walk away) and Gastown, not to mention Strathcona, only a 10 minute walk away—and  with the Prior/Venables artery, gamblers and loan sharks will be passing right through the neighbourhood daily.

Furthermore, do other cities really put mega-casinos in their downtown core?

No, they don’t. Chicago, for example. Their “downtown” casino? It’s 20 minutes outside of Chicago downtown, very like our current River Rock Casino in Richmond. Singapore’s casinos charge $80 for locals to enter, and they have one at their huge major resort downtown that is very far from any residential area. The other is on an island 10 miles from the city. Everything is strictly designed for tourism, not local gambling.

Montreal’s casino is on the Expo island–again away from the city residential heart, as is the casino in Edmonton. NO cities except declining poverty traps like Detroit have allowed this.

This is not normal urban planning. We are not even approaching the frontier of “urban planning” here. After the decades and tens of millions of dollars that have gone into making Vancouver the most livable city in the world, are twe are going to plop Las Vegas into it? And for what? So that our rich and corporations can have the lowest taxes anywhere? And on that topic, what has that done for us lately? Where are the waves of major corporate head offices coming our way because of the low taxes? Non-existent.

Vancouver! You—City Council as well as Vancouver citizens— must stand up and defy the province on this one.

ThinkCity: “It’s Time to Hold ‘Em, Mayor”

Below is an excerpt from a November 17, 2010 article by Neil Monckton of ThinkCity, a thoughtful Vancouver citizen-participation group that focuses on Vancouver’s civic and development issues. Click at bottom to read the whole article at ThinkCity:

“Can city council move all in on the province’s much-expanded gambling plans for Vancouver? Last March, the province announced a new “destination casino” in one of the city’s most rapidly growing areas. In the coming weeks, citizens and their council will finally have an opportunity to table their demands for future benefits. And they had better, because so far the BC Liberal government has not offered Vancouver much in return for accepting this controversial development.

It is controversial for three chief reasons.

First, the city may get a far lower share of the gambling revenues than promised by the province in past agreements.

While the revenue-sharing agreement has yet to be finalized, the city’s take is expected to be much lower than it would have been ten years ago. In 1999, the then-NDP government promised a 16.7 per cent share of gaming profits for those municipalities which allowed destination-style casinos. However, Solicitor General Rich Coleman recently dismissed the BC Association for Charitable Gaming claim for a 33 per cent share of the new casino’s gaming revenue, as promised in a related 1999 agreement. If the BC Liberals are renouncing an eleven-year-old profit-sharing agreement with the province’s charitable sector, why would they honour a similar deal made with civic governments?

Some civic watchers believe Vancouver may see its share cut to less than 10 per cent. With $130-million in annual revenues expected for the province this means the city may be shorted by as much as $10-million a year.

Second, this massive new casino will certainly have some negative impacts on the area. With triple the capacity of the existing Edgewater site, this monster gambling house is 61 per cent larger than BC’s biggest casino, Richmond’s River Rock. It will feature 150 tables and up to 1,500 slot machines – nearly 15 per cent of all the slots in the province…”

Click here to read more.

So you think the stadium lands are BC gov’t property & it can do whatever it likes with them? Not true!

Something we keep hearing in this fight against the massive expansion of the Edgewater Casino is that “it’s on BC government-owned land, so the City of Vancouver can’t stop it.”

Not true. Very much not true.

PavCo (short for BC Pavilion Corporation), the BC government’s crown corporation, is not free to do anything it likes. It is subject to Vancouver city processes and regulations like everyone else. It must go through the rezoning application process for the casino (which is currently much smaller and more hidden away) and it must go through the application process for gaming expansion in Vancouver city limits.

Please see the Memorandum of Agreement on Gaming Policy Between: The Union of BC Municipalities (UBCM) and The Government of British Columbia (the Province).

It’s interesting reading.

In it, the province affirms municipal jurisdiction over land use and gaming licenses, and explicitly agrees to abide by local government decisions.

This massive casino expansion smack in the middle of our downtown is not a done deal, and it must not be rubber-stamped by City Councl just because the City is being bullied by the Province. If you want to learn more about why the City of Vancouver is having trouble saying no to the province, read on or look at this excellent series of investigative articles on the Edgewater expansion by the Vancouver Observer.

Concerning Casino Links to Organized Crime

 

To the average member of the public, gangs are associated with violence and turf wars. This view masks the reality that organized crime is fundamentally a large scale and powerful business, with operations throughout society.

If you think organized crime will not touch you or your family through the expansion of gambling, think again. Last year Betty Yan, a mother with children at a prestigious west side school, was shot to death in a Richmond parking lot. She was a loan shark working with gangs. Her clientele were gambling addicts in Lower Mainland casinos.

The damage didn’t end with her death. Parents at the west side elementary school, afraid for the safety of their own children, forced the woman’s young and traumatized children out of the school. And Yan was not the only murder victim tied to gambling and organized crime.

In 2006, loan shark Lilly Li left her regular shift at Richmond’s River Rock Casino with somewhere between $20,000 and $300,000 in cash, and disappeared. Her body was found months later, buried in a shallow grave at Jericho Beach.

This is happening in our city–our Metro Vancouver–and it is part and parcel of the expansion of legalized gambling and the building of casinos in our midst.

Right here in Metro Vancouver loan sharks charge up to 20% a day, and victims don’t believe police can do anything to protect them. Terrified of reprisals against the debtor or an innocent family member, loan shark victims are often forced into prostitution and drug-dealing to pay off their gambling debts: CBC News – British Columbia – Casino loan sharks a tricky target: RCMP

And just who do you think is there to help them with that little money-making sideline? Why, the gangs, of course. All under one roof, care of the BC taxpayer.

It didn’t used to be this way.

BC gambling in the old days mainly involved provincial lotteries and smoky bingo halls operated by charities. Those days are long gone, and the glittering gambling palaces that replaced the bingo halls are the perfect venue for budding young Scarfaces with their loan shark, money laundering, and drug dealing activities operated by the Hell’s Angels, the Asian triads, the UN gang, and Indo-Canadian gangs.

Apart from correctional institutions, casinos have the highest concentration of gangsters anywhere in BC, says Fred Pinnock, the former commander of BC’s Integrated Illegal Gaming Enforcement Team (IIGET): Ex-unit commander questions government’s commitment to “meaningful” illegal gaming investigations – Public Eye Online

Pinnock goes on to say “There’s a ton of criminal activity being conducted in these places every day, including money laundering, loansharking and other enterprise crimes.”

Policing legalized gambling operations requires highly specialized resources, training, sophisticated data bases and communications, and a far-reaching law enforcement strategy.

Naturally, you would expect that our provincial government, concerned as it is about the protection of the public and the perception that legal gambling operations are squeaky clean, would aggressively target the criminal element. Yup, and there is a great bridge for sale in Brooklyn, too.

The fact is that Minister Rich Coleman, who takes the gaming portfolio with him to whichever ministry he is moved to, has completely abdicated his responsibility to ensure the public is adequately protected in BC casinos. Faced with a report in January 2010 from IIGET that casinos are a hotbed of illegal activity (RCMP Money Laundering Report), and the team does not have nearly enough resources to do even rudimentary investigation, Minister Coleman immediately took decisive action: he disbanded them.

Minister denies illegal gaming report allegations

Now there is no serious oversight of gang and organized crime activity in casino operations. Now, as a result of the most recent cabinet shuffle, BC’s minister responsible for gaming is ALSO the Solicitor-General, and responsible for policing.

Even for gangsters, BC is Open for Business!

Vancouver Observer articles on the Edgewater Casino

The Vancouver Observer has undertaken an excellent series of articles on the proposed Edgewater Casino expansion, irregularities in the process, the problem with a massive casino in a downtown core, and other related issues and questions.

Here are the articles, in chronological order, and the Observer says there are more to come:

2010

August 26, 2010 New Edgewater Casino at BC Place will doubling gambling in the city: does it have to happen?

Sept 15 Vancouver to have one last chance to weigh in on proposal for BC’s largest casino

October 14 Provincial-backed casino requires City approval, but can City say no?

October 14 Community service and arts groups ask City to intervene in gaming development

Nov 4 BC Place casino proposal: lack of independent fairness advisor raises questions

Nov 4 Province made an “exceptionally” fast decision on BC Place casino, says NDP critic Spencer Chandra Herbert

Nov 7 Isn’t it kind of strange that Vancouver would have a super-sized casino downtown? by Emily Barca and Linda Solomon

Dec 1 Casino expansion at B.C. Place may lead to increase in organized crime activity, sources say by Emily Barca

Dec 2 Will B.C. casinos’ bad record on money laundering get worse at B.C. Place casino?

Dec 3 False Creek Residents Association votes against BC Place casino

2011

Feb 7, 2011, 2011 Inside Edgewater Casino by Emily Barca

Feb 9, Paragon of Haste by Ian Reid

Feb 20,  More compelling reasons not to bank on casino revenue

Feb 16, The road to Paragon by Ian Reid

Feb 16,  Province made an “exceptionally” fast decision on BC Place casino, says NDP critic Spencer Chandra Herbert

March 7, A battle long brewing comes to a head tonight at City Hall
and also:
Live blogging the casino public hearing at City Council

March 9,  Menke confirms PavCo partnership began four years ago

March 11, COPE calls on Premier Designate Clark to de-link casino expansion from social services

March 14, Live blogging the casino public hearing at City Council, Day 3

March 16, PavCo’s story gets fishier

April 6, Gambling addict makes mess in casino

April 8, Did Rich Coleman tell the truth about BCLC and Paragon?

April 8, Blunderdome: politics, positioning and a costly retractable roof

April 8, Insular megacasino would add no value to Vancouver’s downtown businesses by Peter Busby and Penny Gurstein

•• April 8, Vancouver Observer, Blunderdome: politics, positioning and a costly retractable roof

April 11, Vancouver Observer, Vancouver, Not Vegas press release: Offering fewer slots is a sign of casino’s desperation

April 12, Vancouver Observer (Ian Reid), Paragon’s place at the BC Liberal table

What’s the Real Story Behind Edgewater?

If you scratch the surface of the Edgewater mega-casino development, you’ll hit social housing in about 10 seconds.

Vision Vancouver is expected to deliver on new social housing units for Vancouver, and tick tick tick goes the clock on their mandate. To fulfill their promise on social housing, the city needs the province to step up with the money it committed last May: $225M IN HOUSING INVESTMENTS TO CREATE 1,006 NEW HOMES

But something seems to be happening with that money. Or rather, nothing seems to be happening.

Rumours are that the province’s social housing money is taking the slow boat across Georgia Strait from Victoria, and suddenly everything’s gone quiet.

Too quiet.

At the same time, PavCo (aka the BC Liberal government) is applying to City Council to re-zone BC Place Stadium to accommodate construction of the massive Las Vegas-run mega-casino.

Coincidence?

Vancouverites should be asking–what’s the real relationship between the province’s commitment of money for social housing and the expansion of gambling in Vancouver?

Is Vancouver City Council expected to approve a huge Las Vegas-style mega-casino for downtown if it wants to get those social housing units built for Vancouver’s homeless?