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

[youtube=https://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.”

Is the public, not the casino, in fact paying for BC Place Stadium roof?


Press release today from the NDP. Some good questions were asked. Will Rich Coleman and the BC Liberals answer? Why is so much casino revenue being funneled right back to the private casino owners?

Spencer Chandra Herbert
Official Opposition Critic for Tourism, Culture, and the Arts
MLA, Vancouver West End
www.spencerchandraherbert.ca

B.C. NDP CAUCUS
MEDIA RELEASE
Jan. 9, 2011

B.C. LIBERALS MUST ANSWER ON SUBSIDIES FOR PROPOSED EDGEWATER CASINO EXPANSION – NDP

VANCOUVER — As residents of Vancouver prepare to formally weigh in on the proposed Edgewater casino expansion, the B.C. Liberal government must let the public know whether the casino is going to end up being subsidized by taxpayers even while gaming grants for community groups are being cut, the B.C. New Democrats say.

“The people of B.C. have every right to question whether the top priority for gaming revenue should be subsidizing private casino companies’ car parks and show lounges even while the B.C. Liberals are slashing funds for small charities that help seniors in need, youth engage through the arts, people learn to read, and adults with disabilities connect with their communities,” said New Democrat tourism and arts critic Spencer Chandra Herbert.

“British Columbians were told the proposed Edgewater casino expansion would pay for the $563 million B.C. Place roof project, but we now have to wonder if the public will actually be paying for the casino.The B.C. Liberals must tell the people of B.C. how much government revenue the proposed expanded Edgewater casino is eligible for, and justify why public money should be used to subsidize well-established private companies that are generating hundreds of millions in profits every year.”

Casinos can receive a subsidy amounting to three per cent of their net win in the form of a Facility Development Commission, which can be used for capital projects. An additional one-time subsidy, an Accelerated Facility Development Commission, can amount to an additional two per cent of a casino’s net win. Together, these subsidies have offset around 40 per cent of the capital costs of casino development in B.C. in recent years.

The proposed new Edgewater casino would have double the number of slot machines and table games compared to the current casino, and, if approved by Vancouver council, would be the largest casino in B.C. The expanded Edgewater would pay an expected $6 million a year in lease payments to the province.

While it is not known how much subsidies in FDCs and AFDCs the proposed casino would receive, Chandra Herbert pointed out that since the province estimates the new Edgewater will bring in $130 million per year in revenue, it can be estimated that the expanded casino could receive between $3.5 million and $6.5 million per year in subsidies.

“Casinos were welcomed into B.C. with the understanding that they would generate revenues for non-profits and charities. But under the B.C. Liberals, that social contract has been broken. Gaming grants are actually lower now than they were in the 1990s, even though revenues from gaming have increased dramatically.” said Chandra Herbert.

According to figures supplied to the Vancouver Sun by the B.C. Lottery Commission, casino operators received $40 million in FDCs in 2009-10, up from $16.5 million in 2001-02.

The B.C. New Democrats are advocating for open and transparent governance, including the separation of gaming policy and gaming enforcement in separate ministries, and a full restoration of gaming grants to charities.

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Contact: Sara Goldvine 250-208-3560

Strathcona Residents’ Association Opposes Edgewater Casino Expansion in Unanimous Motion

Strathcona Residents’ Association
c/o 601 Keefer Street, Vancouver, BC, V6A 3V8
Strathcona-residents.org

January 5, 2011

To The Mayor and City Council of Vancouver:

As Chair of The Strathcona Resident’s Association (SRA), I am writing to inform you that at our January 5, 2011 meeting:

The Strathcona Residents Association unanimously voted to oppose the expansion of the Edgewater Casino at BC Place Stadium in False Creek.

The SRA urges City Council to refuse to pass the B.C. Government’s application to expand gaming in the municipality, and to oppose the building of the Edgewater mega-casino.

Our reasons for opposition to the building of the expanded Edgewater casino include the following:

1. The planned casino is less than a ten minute walk from our neighbourhood. The well-documented crime that attends casinos, even in provinces with far better gambling regulation than that observed in British Columbia, is not welcome. Strathcona already suffers from crime levels far worse than most other districts. Our position is that situating a massive casino so close to the Downtown Eastside, with its pre-existing crime and policing troubles, is unwise to say the least. Recent news reports demonstrate that casinos provide easy access to money laundering for organized crime, and casinos always attract gang activity. We ask you to acknowledge the growing threat that gangs constitute to our communities.

2. The expanded casino will bring increased traffic to the tune of 300 cars per hour, which will negatively impact our community.

3. The BC government expanded gaming in this province on the back of support from charities who expected to be supported by gaming revenues. Charities have been radically cut away from these revenues. Our neighbourhood, like every other, derives important services from these charities. We see no benefit from expanded gaming in our community.

4. We are opposed to gambling and gambling expansion in general as it significantly increases social ills, something our community witnesses in graphic form daily.

Again, we urge you to decline the application for gaming expansion, and remind you that Strathcona’s opposition is strong and unanimous.

Sincerely,

James C. Johnstone
Chairperson, Strathcona Residents’ Association
Chair@strathcona-residents.org

604-254-4666

cc. Jenny Kwan, MLA
Libby Davies, MP

Comment on Vancouver’s Oak Street Shooting: gangs and money-laundering

The shooting of 10 gang-related people on Vancouver’s westside over the weekend is an astonishing punctuation mark in our history. We all know this horrific escalation of violence is out of any control by police and civil authorities, and no end is in sight.

Most of us associate gangs with violence and street warfare, but these incidents are only ancillary to the massive industry behind them. Money is the lifeblood that feeds it. Controlling the gangs is as simple, and as overwhelmingly difficult, as this: STOP THE MONEY.

It’s impossible to stop the drug business, the prostitution, human trafficking, gun and weapons trade, loan sharking and other commerce that preys on human misery and weakness.

Yet consider this: almost ALL gang-related transactions are cash, and that cash, hundreds and hundreds of millions of it, must be laundered into “legal” currency through conventional business outlets.

FINTRAC (Financial Transactions and Report Analysis Centre of Canada) is the federal government agency tasked with discovering, scrutinizing, disrupting, and shutting down money-laundering activities. It has identified casinos as a high priority focus for money laundering by organized crime and terrorists–which BC has had more than its fair share of: see  FINTRAC – Money Laundering Typologies and Trends in Canadian Casinos – Financial Transactions and Reports Analysis Centre of Canada.

FINTRAC tracking indicates that money laundering in casino venues has increased significantly from 2007-08.

For all their talk about integrity and law and order, the BC Lottery Corporation and the BC government have almost completely abandoned the nexus between legal gambling operations and money-laundering by organized crime.

In late 2008 the Integrated Illegal Gaming Enforcement Team issued a damning report, which said “Canadian casinos are extremely vulnerable to money laundering because they deal in cash and handle tens of millions of dollars every day… members of organized crime also used casinos for criminal purposes and… some of these criminal elements have successfully infiltrated the industry. “ See RCMP on money-laundering.

The report goes on to say that in recent years FINTRAC has alerted the RCMP to suspicious transactions involving casinos, with amounts across Canada totalling over $40 million, but that, “because of other priorities and lack of resources, at this time, nothing is being done to investigate these situations.”

Most of us, faced with such an incendiary report, would immediately beef up policing of casinos, yes?

Obviously we don’t understand how protecting the public interest actually works in the greatest place on earth.

Because the real answer was to call an urgent in-camera meeting of the IIGET Consultative Board with representatives of the Gaming Branch, to review the report. This happened on January 26, 2009, and concluded with a discussion of the “uncertainty of future funding for IIGET.”

Within three weeks, internal emails reveal, the die was cast. IIGET would be disbanded. See the emails concerning the closure of the integrated illegal gaming enforcement team. To this day BC has no dedicated specialized policing of casinos and the money-laundering and loan-sharking that go on inside their premises on a daily basis: The announcement was made April 1, 2009, which probably tickled the funny-bones over at BC Gaming.

And what has been the result?

The BC Lottery Corporation seems to have turned a blind eye to the whole business. In July of this year, FINTRAC, in an unprecedented move, fined the BC Lottery Corporation $670,000 for inadequate reporting of suspicious transactions–the first fine of a gaming regulatory body in Canada. BC Lottery Corporation president Michael Graydon brushed off the offenses as clerical errors.

Mr. Graydon, Solicitor General Rich Coleman: We are seeing the results of your negligence on our city streets. Our children are waking in their beds to the sound of gunfire outside their windows.

Faced with the opportunity to help stop this hellish business, you are doing nothing. Worse than nothing.

Give us real policing in our casinos, and stop pretending that everything that goes on inside them is just fun and games.

By Unanimous Decision, Paragon Loses Casino Bid in Missouri

Missouri State Gaming Commission chairman James Mathewson of Sedalia reacts to the process of selecting Cape Girardeau and the Isle of Capri Casino as the presumptive recipient of the state's 13th and last riverboat gaming license.

On December 2, 2010, the Missouri Gaming Commission voted 5-0 to grant its final vacant casino license to locally run Isle of Capri Casinos, in preference to Las Vegas run Paragon Gaming’s Sugar Creek bid and one other competitor. No dice for Sugar Creek casino – Independence, MO – The Examiner.

(Paragon are the current owners of Vancouver’s much smaller Edgewater Casino. BC Lottery Corp has given them the contract to to open a giant new expanded Edgewater next to BC Place Stadium – IF Vancouver City Council approves it.)

Missouri’s open, public, competitive bidding process contrasts with sharply with the BC Lottery Corporation’s approach. Missouri set a 6 week deadline for interested bidders to submit detailed economic assessments, then another 6 weeks to submit a formal application, following which there would be another 2 months for public hearings, polls, independent economic impact reports, with no formal end time for the consideration process. SE Missourian.com: Missouri Gaming Commission sets timetable for casino licensing process (05/27/10)

Here’s the chair of the Missouri Gaming Commission on the selection process – see YouTube.

Paragon Gaming’s $407 million proposal was not able to garner a single vote of support from the Commission, having been assessed as generating the least amount of revenue and generating the fewest jobs of the three shortlisted bidders.

(Note: Paragon has been making a lot of noise about the jobs it will create in Vancouver, but they don’t address the way such casinos suck money and jobs out of the surrounding businesses and economy. Its jobs algorithm is faulty – and furthermore, it is not talking about high-level or green jobs.)

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.

BC Business on the proposed expanded Edgewater mega-casino

This article was first published on October 7, 2010 in BC Business Magazine. To read the original on the BC Business site instead, please click here. We wanted to reproduce the article here because it is an informative, thorough investigation into the salient details of the casino deal. Article is by Nick Rockel; image by Peter Holst. For related materials, please see Vancouver Observer series and Edgewater cannot compete with Singapore for China gamblers. Please note that what Paragon states may differ from actual casino plans, particularly on this question of the ‘destination casino.’ Please stay tuned for future article, and  review the Vancouver Observer series (link above) to keep yourselves informed.

The new casino slotted for downtown Vancouver will triple the gambling capacity of the old Edgewater and help pay for a new roof for neighbouring BC Place. Whether the global gambling elite will come to play, as both the developer and province hope, is another matter .

In his black jacket and open- necked shirt, Scott Menke looks ready to play a little roulette, or maybe some Texas hold’em. One morning in late June, the president and co-founder of Las Vegas-based casino developer Paragon Gaming is sitting in the boardroom of his company’s downtown Vancouver office at Plaza of Nations. Menke has just flown in from Edmonton, where his company runs one of its three Canadian casinos. With the confidence of a croupier, he explains how Paragon plans to transform Vancouver into a global gambling destination.

Paragon owns the Edgewater Casino, an underwhelming 30,000-square-foot establishment at the far end of the plaza. But it recently won the right to build a Vegas-style hotel, casino and entertainment complex across the street from here, on a small plot of land next to provincially owned BC Place Stadium. The Edgewater – or rather, its precious gaming licence – will move to the new 780,000-square-foot development, which Paragon aims to finish by 2013.

With 150 tables and up to 1,500 slot machines, the casino portion of the still-unnamed, $450-million project will be more than three times bigger than the Edgewater. But Menke points out that it occupies just 14 per cent of the proposed complex, a branded property that will include two hotels with a combined 650 rooms, plus restaurants, shops, meeting spaces and spa and gym facilities. “Everybody says it’s a casino, but the casino is only 100,000 square feet out of 800,000,” notes the tall Arizona native.

Focus on destination tourism

Menke says the Paragon development is an opportunity to bring more visitors to Vancouver. Where 23 per cent of the Edgewater’s customers are from outside the Lower Mainland, Paragon projects that number will at least double at the new property, thanks to a mix of Canadian and international guests.

In other words, the joint won’t rely on Metro Vancouver residents to keep its baccarat tables and hotel rooms full. “We’ll continue to build our local base, but our focus is really on the destination tourism,” Menke says. “We absolutely believe that we’re going to be additive to the market, not competing with other hotels around here.”

Paragon’s Vancouver play is one more step in the expansion of the B.C. gambling industry, which may soon pour more money into provincial coffers than all corporate income taxes combined. Gambling – or gaming, to use the industry euphemism – is a lucrative business. But skeptics say the provincial government is hooked on the revenues it brings while overlooking the economic and social costs of problem gambling. To others, the idea that high rollers from Chicago and Shanghai will flock to a Vancouver casino is far-fetched. And if the province does view gambling as more than a money grab, it isn’t sharing its plan with the public.

Continue reading

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.