COMMUNITIES

How casinos and slots parlors harm host and surrounding communities

Lottery revenue will take a steep hit.
It's estimated that casinos will reduce state lottery revenues transferred as state aid to towns and cities by about $90 million.¹  Unlike the lottery, which returns the majority of it's revenue to cities and towns, most gambling profits flow to investors and special interests. It's a shell game - taking money from one account and putting it into another.

Expanded gambling causes increases in crime.
One of the most comprehensive studies on casinos and crime reported that casinos increased rates of rape, robbery, aggravated assault, burglary, larceny, and auto theft. ²

Casinos and slots hurt local businesses.
Experience in communities across the country has demonstrated that patrons do not spend their money at businesses outside gambling establishments. These buildings are all-inclusive, have no windows or clocks, and provide for the customer's every need including food, beverages and ATM machines. Often, they also serve free alcohol - offering a clear competitive advantage over locally owned businesses.

Casinos and slots do not help the local economy.
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.

The casino industry in struggling regionally and around the country.
Moody's recently downgraded the gambling industry from "stable" to "negative" citing declining revenue. In July Fitch Ratings, another credit rating agency, released a report painting a bleak picture of the casino industry, citing saturation across regional markets; stagnant wages among lower-tier players who spend less than $100 per casino visit; reprioritization of disposable income; younger generations' potentially lower propensity to gamble; proliferation of online/social gaming; and baby boomers' lowered preparedness for retirement. The Connecticut casinos are currently experiencing double digit drops in revenue, New Jersey and Delaware have given taxpayer bailouts to struggling casinos, and other states continue to offer the gambling industry concessions to keep them viable. Around the country casinos are going bankrupt, shutting their doors and laying off employees. The brick and mortar casino industry has reached its tipping point and is in decline. This is not a good time for Massachusetts communities to partner with the gambling industry.

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 $243.³

Gambling interests and developers don't keep their promises.
Delaware casinos supposed to provide tax relief, but now the taxpayers have bailed them out to the tune of $21M and with another $12M next year. The $2.4 billion dollar Revel casino was supposed to revitalize Atlantic City, but when it failed to live up to its promises, New Jersey Governor Chris Christy bailed the casino out with a $261 million tax package. The casino filed for bankruptcy anyway and is now searching for a buyer. When Pennsylvania legislators legalized casinos in 2004, they promised "historic" property tax cuts - yet ten years later the average homeowner pays more today than he or she did before legalization.⁴   In Missouri, casinos were supposed to fund education, but 20 years later, educators say that the “extra” money from casinos is being offset by reductions from what the state would have otherwise spent out of the budget even as schools continue to struggle with underfunding.⁵  In Bangor Maine, Hollywood Slots promised residents that that the casino would create jobs, help the local economy, with no rise in addiction or crime. In reality, 2,000 jobs were lost, retail sales dropped by $13M, gambling addiction increased and the crime rate rose 26% - higher than any other city in Maine. In exchange for a favorable ballot vote the Mashpee Wampanoag tribe and it's investors promised Middleboro, Mass. residents a billion-dollar casino with 5 star restaurants, a hotel, arena and water park. A year later the Tribe announced that it had altered the plan to a small casino with some food service. The tribe eventually walked away from its contract and still owes the town $1.5M in promised payments.

States help casino break their promises to communities in order to increase or maintain revenue.
When Twin Rivers casino investors were seeking a license in Rhode Island, they promised to save dog racing, and not to remain open 24 hours a day, but the moment revenue dipped, they filed for bankruptcy, citing that the casino couldn't turn a profit between the dogs and the hours, and easily got the state - by this time dependent on casino tax revenue - to agree to jettison the track and open 24 hours a day. States have also allowed casinos to abandon formerly imposed wagering or loss limits. In Iowa and Illinois measures like these have “partly resulted in existing gamblers losing more money as opposed to increasing the number of gamblers.” Also in pursuit of more revenue, New Jersey repealed a smoking ban that had put in place to protect casino workers. In California they lowered the gambling age at some casinos to 18 to increase revenue. Midwest riverboat casinos, originally intended to float down the river and return patrons after a set time, became 'boats in a moat' – full-fledged permanently-docked casinos sitting in a foot of water.

More "convenience gambling", closer to home, creates more problem gamblers.
Even proponents of expanded gambling admit that the number of problem gamblers grows as people have easier access to government-promoted slots. That could translate into as many as 300,000 people in Massachusetts, not including the family members and friends of these addicts who will also experience the consequences.⁶  That's also 30 times the number of the most optimistic job creation figures.

Casinos can decrease home values and reduce the property tax base.
Ten years after Foxwoods casino opened in Connecticut, home values in outlying towns within a quarter mile of roads leading to the casino were valued to be 10% to 20% lower than a similar homes farther way.⁷   The financial impact for the homeowners in one small town was approximately $6 M. ⁸  A recent study by the National Association of Realtors called the impact of casinos on a housing market "unambiguously negative", noting that a Western Mass casino would sap 1.1 to 2.3 percent of home values in the host community.⁹

Job estimates do not match reality.
Much of the new gambling revenue will simply be transferred from other sectors, not created, and will therefore drain millions of consumer dollars from our economy and transfer consumer dollars into gambling facilities, resulting in a net decrease in jobs in the overall economy.¹⁰

Casino workers often can't afford to live in the communities where they work.
Card dealers earn on average $15,810 per year - not nearly enough to support a family in most Massachusetts communities¹².  A family of two with an income of $15,810 is income eligible for Food Stamps, WIC, Fuel Assistance, Utility Shutoff Protection, MassHealth, Section 8, Massachusetts Rental Voucher Program, Public Housing, and the Earned Income Credit - all of which costs Massachusetts taxpayers money. Some communities around the Connecticut casinos experience a phenomenon known as 'hot bunking'. Because of the lack of affordable housing, single family homes are converted into multi-housing units resulting in numerous housing and safety violations.

Casinos can cause a strain on public schools.
In Connecticut, low casino wages resulted in the importation of labor, requiring schools in at least one community to provide ESL courses to a high numbers of second-language who spoke as many as 32 different languages. In addition, schools were required to provide remedial work, tutors, free lunches, nursing, and other special education services, while receiving no additional property taxes to offset the costs.

Problem gambling leads to distressed families, child neglect, suicide and bankruptcy.
Domestic violence rates go up, as do foreclosures.¹³  Families break apart, and thousands of people become addicted. Why would the Commonwealth, whose mission is "to promote the common good" partner and promote a product that leads to these outcomes for thousands of its citizens?

Mega Casinos have serious impacts on the Environment.
Communities should be aware of issues arising form the construction of Mega Resort which include reduced air quality from increased traffic, impacts on water resources and wetlands, over-pumping of wells, wastewater treatment and discharge, threatened species, solid waste removal, light and noise pollution, hazardous materials, ground and water contamination from underground fuel containers and parking lot run-off, storm water management and erosion control, and more. The proposal for the former Mashpee Wampanoag Casino in Middleboro - which was approved - specified that it would require 1.5 M gallons of water per day, at peak usage,¹⁴   despite the fact that many wells in town were dry by mid-summer.

Casino-related increases in traffic causes a slew of problems for communities.
A mega casino can add 20 - 40,000 cars on local roads. This can change traffic patterns, create bottlenecks, back-ups and delays, and clog emergency evacuation routes throughout the State. Accidents or overflow could back up onto secondary roads, threatening the health and safety of residents who live along these roads. Secondary roads are the primary routes of travel for school busses and local emergency responders. Many casino visitors, employees, tour busses and service vehicles looking for shortcuts will increase travel along small local roads. Congested traffic can potentially cause dangerous situations train and commuter rail crossings. Additional traffic will emit tons of additional noxious greenhouse gases into the atmosphere, lowering air quality, exacerbating health issues such as asthma. With casinos serving free, and often around-the-clock alcohol, there will be increases in DUI's and accidents. Additional vehicles, including tour busses, will create more road litter, exhaust and road noise, and environmental issues associated with roadway runoff. Additional trucks, busses and service vehicles will cause more costly wear and tear on local roads.

IN THEIR OWN WORDS:   Community Case Studies

• Fort Wayne, Indiana: A cautionary tale
• Connecticut: The Foxwoods Experience
• Bangor Maine: Broken Promises
• Lawrenceburg, Indiana: Gambling offers benefits, but also risks

COMMUNITY CASE STUDY
Fort Wayne Indiana: A Cautionary Tale

After discussions about brining gambling to Fort Wayne Indiana, the prosecuting attorney there did some research. She contacted fellow prosecutors in both large and rural gambling communities within the State, and in March of 2009 forwarded her findings to the Mayor of Fort Wayne. Her letter reads:

Those communities that are larger, which already have quite a bit of crime, like Gary and LaPorte, do not seem to have had too much negative effect of bringing casinos or riverboat gambling to their communities. That may be because there was already prostitution, drugs, drunk driving, etcetera, in the community, and any increase cannot necessarily be linked to the casino. However, what they do notice is an increased need to patrol both the parking and adjacent areas for child neglect cases, where people leave their children unattended in vehicles, also patrolling for public intoxication and drunk driving.

My greatest concern, however, is with the smaller communities in southern Indiana, who have experienced an extremely negative effect from bringing riverboat and casino gambling to their communities. In Ohio and Dearborn County, crime has escalated to the point that they have had to add an additional court to their county court system, and their jail has now become extremely overcrowded. The statistics that they have provided is that their misdemeanor caseload has grown by 200% since the riverboats came to town, and their felony caseload has tripled. They are also concerned because gambling has brought a dangerous criminal element to their community. The second largest oxycontin dealer in Kentucky is regularly transacting in their casino, and again the issue with children being unattended in the parking lot. They have had an increase in identity theft, counterfeiting, forgery, and fraud cases. They also now have a large massage parlor industry and prostitution has been attracted to the area because of the riverboat gambling. This is of concern as we have pretty much eradicated massage parlor prostitution from our community and I would certainly hate to see the resurgence of that criminal element here in Fort Wayne.

The prosecutor in Ohio and Dearborn County also warns that the economic development that was promised with the casinos has never really happened and that very little money is generated outside of the casino. That seems to be a similar issue with prosecutors in other communities as well.

COMMUNITY CASE STUDY
Connecticut: The Foxwoods Experience

Mayor of Ledyard: "I've become very cynical ...
By John Swinconeck
York County Coast Star

LEDYARD, Conn. - "I've become very cynical about this operation over the past 11 years," said Mayor Wesley Johnson of Ledyard, Conn.

Ledyard borders the Pequot reservation that's home to the world's biggest casino, Foxwoods Resort.

"There has been no economic development spin-off from the casino. Businesses do not come here," Johnson said. "Tourists come mainly to gamble. Gamblers have one thing in mind: get to the casino, win or lose their money, get in their cars, and go home."

The more people gamble, the more credit can go on the Wampum player's card, which can quickly accumulate for a free meal.

Mohegan Sun has their own gas station which pumps 170,000 gallons a month, tax free. That's 170,000 gallons that's not going to a local station, Johnson said.

"You can pretty much get whatever you want at a casino," he said.

Connecticut State Trooper Todd Lynch is the resident state trooper of Ledyard. The town pays about 70 percent of his salary to act as the head law enforcement official. He's had the job for one year and four months, and he was raised in the area. Today he heads up a 42 member sworn-in civilian operation.

Since Foxwoods opened in the early 1990s, much about law enforcement has changed.

"The single biggest problem was traffic," Lynch said. "Accidents, the amount of offenders, speeding, OUI. When you have 40,000 come through your town daily, traffic becomes your biggest problem."

While the casino does give slot revenue to the state, Lynch's department does not receive any money directly from the casino.

"The frustrating part is using the budget in place - taxpayer money - to take care of the problems caused by a money making machine," he said.

Lynch said Ledyard is a town of 15,000 with no limited access highway to Foxwoods, unlike Mohegan Sun.

"Everyone of those 40,000, at some time, have to come onto Ledyard roads," Lynch said.

According to Lynch, people quickly find their way onto back roads and shortcuts, so it is no longer just the major roads that are impacted by casino traffic.

When the casino opened, Lynch said residents began complaining about littering and public urination on the roads, plus serious motor vehicle complaints.

State police has jurisdiction on land owned by the casino and everywhere else. Ledyard police cannot enforce the law on tribal land or at the casino. Tribal police can only enforce federal laws on their land, but both the perpetrator and victim must be Indians.

"It can get confusing, not only in finding out where you've got proper jurisdiction but with whose involved," Lynch said.

Lynch's advise for law enforcement in Maine is to make sure law enforcement arraignments are "straight and narrow." Expect also a tremendous influx in the amount of traffic.

"The number of accidents and drunk driving arrests have no where to go but up," he said.

In Ledyard, at one point, the tribes agreed to pay for a "loop patrol" around Foxwoods, Lynch said. Because of that patrol, the following was discovered:

In 1994, 3,500 tickets were written, 55 drunk driving arrests made. In 1995 4,200 tickets were written, with 50 drunk driving arrests. In 1997, 2,000 tickets written, 57 drunk driving arrests. The tribe then cut funding for the program.

In 1999, 332 tickets were issues with 20 drunk driving arrests. In 2001, 477 tickets with 40 drunk driving arrests.

Lynch said the same amount of offenders are out there now that were there in the mid 1990s. There's not as much money for enforcement, so the number of tickets and arrests decreased.

Regardless of the $480 million Connecticut will get this year in slot revenues, Johnson said it's a "drop in the bucket" compared to a $13 billion budget with a $2 billion deficit. Houses on Route 2 (which leads to Foxwoods) have lost 10 to 20 percent of their value, according to Johnson. The only new business on that road is a Dunkin' Donuts, he said.

"They tell you there will be economic development spinoff, and they will work to have that happen, but they don't want it to happen. They want it all controlled in the casino so people will stay there and gamble," Johnson said.

"The only saving grace is the more casinos there are, the more people will drive to the closest one," Lynch said. That means less driving through Ledyard to Foxwoods.

Testimony of Elaine Bono, former member of the Ledyard Planning Commission
to the Massachusetts Committee on Economic Development and Emerging Technologies
March 19, 2008

My name is Elaine Bono, today I live in Yarmouth on Cape Cod. I was born and raised in Boston. After 30 years of living in southeastern CT, 27 years in Ledyard and 3 years in East Lyme, my husband and I returned to MA in 2005. Our home in Ledyard was located halfway between the world's two largest casinos.

For 16 years, from 1985 to 2001, I served on the Ledyard Planning Commission, four years as its Chair. I witnessed firsthand how casinos take trade away from local businesses and malls. Casinos also put a strain on the pool of available employees in the area. So many employees had to be brought into the area to support the casino, along with their families, that there was a crunch on the affordable housing market, as well as overcrowding of local schools, putting a strain on local school budgets. For the town of Ledyard's planning and zoning commissions, regulating such a large enterprise as Foxwoods and dealing with jurisdictional issues with a sovereign nation was a nightmare. The costs in extra employee and town attorney time were borne by the taxpayers. The increase in crime necessitated more police, and the courts became dominated by casino-related crime cases.

Foxwoods was and is constantly expanding. It's open 24/7/365, casinos have no windows or clocks, and the light pollution for the neighbors is constant. Ledyard was a small, quiet rural town of 15,000 in the 1980's. By the 1990's Ledyard had become host to the world's largest casino and had the fifth highest crime rate in CT. By the late 1990's the state proposed to take land by eminent domain in Ledyard and Preston to build a four-lane highway to reduce the trip between casinos from 20 to 10 minutes.

As a tribal reservation, Foxwoods does not pay corporate income tax. Tribal members working there do not pay state income tax. Tribal members living on the Mashantucket reservation are exempt from local property taxes on their homes and their cars. Yet their children attend Ledyard public schools because they live and vote in Ledyard. The town of Ledyard is constantly seeking increased aid from the state to compensate for lost tax revenue, increased town employee costs, and increased costs for schooling tribal children.

While most people who frequent casinos do so responsibly, a significant number become compulsive gamblers. Gambling can trigger addiction, and this addiction has become an epidemic, especially among youth. Gambling attracts crime, victimizes the poor, and sets a poor example for our children. Gambling can cause domestic violence, bankruptcies, and suicides. Gamblers get free alcohol, as long as they are gambling. Casinos attract drugs and prostitution. I witnessed all of these ills firsthand in CT.

In the late 90's the Ledyard tax collector, an upstanding middle-aged woman, embezzled $300,000 from the town's coffers and lost it all at the slots before she was caught. Embezzlements happened in the Sprague town hall, the Stonington town hall, a local auto dealer, and a local lawyer's office. With a casino nearby, it became too convenient for some people to go daily before or after work (sometimes both) to gamble away their (and sometimes other people's) money.

If Class III gambling is legalized in MA, any recognized Native American tribe in addition to the licensed casino developers will be able to wreak this havoc on the unfortunate host community, possibly in your district. I strongly recommend you all work as hard as you can to avoid that scenario. Thank you for your time and attention.

Playing For Keeps:  Anti-casino activists visit Foxwoods
September 2, 2005

Located in a rural area of Connecticut, Foxwoods Casino has had a profound impact on surrounding communities, as reported by Saugerties Times writer Andrea Barrist Stern. The following excerpts from that article summarize her findings:

Crime has risen
A mere five years after Foxwoods Casino opened (in 1993), the sleepy town of Ledyard (15,000 residents) had risen to fifth place statewide in crime based on offenses at and around the casino, according to former Ledyard supervisor Wesley Johnson ..Gambling at the casino has led to bankruptcies, embezzlements and suicides.

Taxes have not dropped
Foxwoods has been anything but a boon to economic development for its host community and its neighbors nearby. "Sales tax hasn't gone away, property taxes haven't gone down and the state has still not been able to balance its budget," said Sharon Wadecki, a member of the Ledyard town council. Added Nick Mullane, first selectman of the town of North Stonington, "You don't have the governors of Connecticut or California [where Native American gaming is more widespread] advocating other states to embrace gambling and saying it's been good for their state." .. "The casinos have probably cost the state $3 to $5 for every $1 it takes in," noted Mary Beth Gorke-Felice, the owner of a bed and breakfast in Woodstock, Connecticut, and a founder of the Connecticut Alliance Against Casino Expansion. "So when people say Connecticut gets $440 million a year from the casinos, . it costs the residents three times that a year from land that's been taken into trust, taxes that aren't paid, businesses that can't make it, and services that are required."

Local businesses have been hurt
The casino has siphoned off money that local residents would have spent at non-casino restaurants, shops and entertainment venues and for other goods such as cars and appliances. It has also drawn down the labor force, making it difficult or impossible for some local businesses to continue - mainly because the casino offers health benefits..Since Foxwoods opened in 1992, one hotel, one bank and three donut shops have been the only new businesses in town, according to the Connecticut officials. Nor have the existing businesses been able to compete in terms of supplying the casino with food supplies and other items because of volume discounts the casino is able to get elsewhere. At the same time, many already existing local businesses closed or have been hard-pressed to remain open as a direct result of the casino's presence, said Wadecki. "A casino is difficult to compete with," said Mullane "A casino is a total destination resort. It's a city, a town, and a shopping mall with restaurants and everything else."

Affordable housing is harder to find
The 2004 median home sale price in that part of Connecticut was $236,500, according to a May 8, 2005 article in The Hartford Courant, part of a two-part series by Jeff Benedict, an attorney and the author of Without Reservation. Casino employees are showing up in homeless shelters or packing four or five families into a one-family residence. A local building inspector recently cited one immigrant who had purchased a condo and then divided the basement into five bedrooms he rented to casino workers.

Schools have grappled with teaching second-language learners
In addition, the presence of Foxwoods has become a problem for school districts like those in Norwich, where immigrant workers at the casino have settled because they cannot afford to live closer. Speaking some 32 different languages at home, these immigrants have created a burden for the schools required to provide English-as-a-Second-Language (ESL) courses, remedial work, tutors, free lunches, nursing, and other special education services, while receiving no additional property taxes to offset the costs. The influx of this cheap labor has also affected the school district's ability to qualify for federal funding, which is now tied to test results under the federal No Child Left Behind legislation.

Hidden social costs have emerged
"The flood of slot machines into this region has given rise to a new class of improbable criminals - middle-aged women, married with children, gainfully employed, with no criminal history - now residing in taxpayer-funded cells," Benedict wrote on February 13, 2005 for another Connecticut paper, The Day. "White collar crime, bankruptcy, property foreclosure, extinguished pension funds, and divorce are hidden costs borne by communities nearest casinos."

Embezzling by trusted employees has become a problem
In 2001, the Ledyard tax collector went to prison for embezzling $302,587 to support her addiction to the slot machines. In 1998, the former tax collector for Sprague pleaded guilty to stealing more than $105,000 from her town over three years. She had worked for the tax collector's office for 14 years. And this year, a 25-year staff accountant for the town of Stonington was sentenced to a year in prison for stealing $257,000 in town funds for gambling. As a result, Ledyard and two neighboring towns now spend a total of $100,000 a year to have their books audited, according to Johnson and the other Connecticut officials.

Seniors and local residents are tempted beyond their means
A recent study by the Pennsylvania State College of Medicine and the University of Pennsylvania found that among a random sampling of 843 people 65 and older who were surveyed, nearly 11% were "at risk" gamblers. In its own study on the impact of gambling in 1999, the federal government found that problem and pathological gambling doubles within a 50-mile radius of a casino.

Casino expansion cannot be stopped
Nor has the [Ledyard] community been able to check the expansion at Foxwoods, which originally opened as a high stakes bingo hall in 1986 before expanding to full a Las Vegas casino-type operation in 1992. The casino - which now has 340,000 square feet of gaming space in a complex that covers 4.7 million square feet, three hotels with a total of 1,416 guest rooms, 25 restaurants, a conference center with 25 conference rooms and 55,000 square feet of meeting space, a 4,000-seat arena and other theaters, a spa, a championship golf course, and shopping - is currently planning its fifth expansion. Why have Connecticut officials been unable to stem the casino's growth? "Municipal and state officials have no control over what an Indian tribe does with its sovereign land base," said Benedict. "If an expansion extends beyond the boundaries of local trust lands, communities can do something about it but a reservation is sovereign land. Not only can a tribe expand at will, they can build other things there that would be totally illegal or inappropriate a mile away, such as a nuclear storage site. This is the kind of thing that has come up elsewhere in the country."

Promises by casinos cannot be enforced
Developer Thomas Wilmot [the backer of the proposed casino in Saugerties] has implied in meetings with local businesspeople that he and the tribe would agree to limitations on the size of a casino in Saugerties and would obey local laws, but Benedict said such promises are useless "if history is relevan.You can say anything in this process but the fact of the matter is that municipal governments have no authority to enforce these kinds of promises. Just because a sovereign group says it will abide by local laws, when a dispute arises and they decide they don't want to, there is nothing to enable the town government to enforce their laws."

COMMUNITY CASE STUDY
Bangor Maine: Broken Promises

One Year Later, Hollywood Slots Fails to Deliver on it's many promises

PORTLAND - One year after opening its new casino in Bangor with 1,000 slot machines, Hollywood Slots has failed to live up to its promises to revive both harness racing and the local economy, according to an analysis by CasinosNO!

In every category, the rosy predictions and forecasts by gambling promoters that casinos are "engines of economic growth" have not come true. Figures for the Bangor area show that since Hollywood Slots began operation in 2005, unemployment is up, crime is up, addiction is up and retail sales are down. Furthermore, evidence of the "substitution effect" - the claims by opponents that casinos only move money from one segment of the economy to another rather than create new opportunities - is clear.

"Any objective analysis of the data would be hard pressed to show any meaningful economic or social benefit from Hollywood Slots," said Dennis Bailey, executive director of CasinosNO! "I can't really say 'we told you so' because the truth is the evidence is worse than we even thought it would be."

An examination of the data in several categories shows the following:

Harness Racing: The most significant justification to voters for allowing a gambling casino in Maine was that it would revive a dying industry - harness racing. While it's certainly true that the owners of race tracks and horse breeders have received a healthy subsidy from the slots revenue - allowing them to continue their way of life - Hollywood Slots has done nothing to revive interest in the sport. Fewer and fewer people are attending or betting on harness racing events. According to the Maine Harness Racing Commission, the "live handle" - the amount of money wagered on live harness racing in Maine - has fallen consistently year after year - from $7.7 million in 2003 to just $4.7 million last year. "Saying that Hollywood Slots has revived the harness racing industry would be like saying we've revived the shoe industry because we've put all the shoe-shop employees on welfare," Bailey said.

Unemployment: The unemployment rate in both Bangor and the Bangor Labor Market began creeping up even before the recent economic downturn and continued to rise after the opening of Hollywood Slots, from 4.6% in July 2005 to a high of 8% in March 2009, according to the Maine Department of Labor. (It now stands at 7.4%) It should be remembered that while Penn National, the owner of Hollywood Slots, brags of creating 500 jobs in Bangor, it purchased and closed the former Miller's Restaurant, putting close to 100 people out of work, before converting it to a temporary slots parlor. It then purchased and tore down the Holiday Inn (100+ employees) and the Penobscot Inn (75 employees) before constructing its new facility. While Bangor's unemployment rate is slightly below the state average, there is no indication that Hollywood Slots has had a measurable impact on employment in the Bangor area.

Retail Sales: In 2007 - two years after Hollywood Slots opened its temporary facility - retail sales declined in Bangor by $13 million after several consecutive years of steady growth, according to figures compiled by the State Planning Office. While this would seem to confirm studies that show that the introduction of casinos cause a reduction of spending in other retail areas, more analysis is needed. The collapse of the housing and construction markets in Maine and the nation has slowed retail sales in numerous markets. "But it's safe to say that Hollywood Slots has had no discernible positive impact on retail sales in Bangor and has failed to make the area immune from the economic downturn that is affecting areas of the state that don't have a gambling casino," Bailey said.

Meanwhile, downtown Bangor restaurants are not seeing any benefit from Hollywood Slots. In fact, a February 2009 article in the Bangor Daily News chronicled the fate of eight restaurants that had recently closed their doors or reduced their services. (See Eatery Signs Bad Omen for Bangor, by Renee Ordway, Feb. 27, 2009)

Substitution Effect: The best evidence of the so-called "substitution effect" or cannibalization of other businesses due to the advent of slot machines is to examine how other gambling operations have fared since the introduction of Hollywood Slots. According to several accounts, charity bingo games and other games of chance have suffered as more gamblers are drawn to the lure of slot machines. Michael Hurley, who runs a company in Bangor that provides bingo hall supplies to nonprofit organizations in eastern and northern Maine, told the Ellsworth American, "This racino is killing me." Hurley said his business declined 20% shortly after Hollywood Slots opened in November 2005.

Similarly, the Penobscot Indians have suffered losses of up to $200,000 a year in its high stakes bingo game since the opening of Hollywood Slots, reducing the state's share of revenue from $150,000 to just $3,800. Sales of Lottery tickets in the Bangor region have dropped nearly 20% - even when they've increased everywhere else in Maine - since Hollywood Slots came to the area. And in an ironic example of how the big fish eat the little fish, the state's off-track-betting parlors - which were put in place in 1991 to "save" harness racing - are in financial trouble themselves due to the racino, the latest "solution" for the dying harness racing industry.

George Kerr of Old Orchard Beach, a commercial property owner and co-owner of the Sanford OTB, told CasinosNO! in 2007, "Everybody's losing money, they (gamblers) are all going to Bangor. All the handles are way down. Everybody wants to play the slot machines."

"Gambling dollars only go so far," Bailey said. "During the campaign for the racino, nobody mentioned the fact that setting up a racino would only compete with existing gambling outlets which only serves to reduce the state's cut from other games like the Lottery and OTBs. These revenue losses to the state are never deducted from the rosy figures presented by Hollywood Slots to show its actual contribution to Maine."

Crime: In 2006, the first full year of operations at Hollywood Slots, the crime rate in Bangor increased 22% - the biggest increase of any city in Maine, according to figures compiled by the Maine Department of Public Safety. The increase in Bangor's crime rate came at a time when the city's population actually declined and followed two years of steady decreases in the city's crime rate. Part of the increase was due to a sharp rise of larceny, which includes embezzlement, from 1,304 cases in 2005 to 1,633 in 2006 - an additional larceny almost every day. Penobscot County as a whole saw only a slight increase in crime, from 29.7 offenses per 1,000 residents to 32.3 offenses; however nearby Brewer saw its crime rate rise more than 15%. Bangor's crime rate increased again in 2007 (although not by much) while the crime rate in Brewer showed another sharp increase (figures for 2008 are not yet available). By comparison, the crime rates in Maine's two largest cities, Portland and Lewiston, declined.

Bangor officials were quick to say that the increase in crime had no connection to Hollywood Slots and blamed the increase on drugs (even though numerous Maine communities have problems with drugs but saw their crime rates go down in the same period). The increased crime rate also ran counter to predictions by the general manager of Hollywood Slots who told the Bangor Daily News in 2006 that the casino would likely cause a decrease in crime. "I have never seen gambling lead to an increase in crime," said John Johnson. "Unemployment creates crime. When you bring in economic development to an area, crime goes down. The slots facility is part of that."

"Johnson was wrong on two counts," Bailey said. "Unemployment has gone up along with crime since Hollywood Slots opened in 2005."

Several incidents that were connected to Hollywood Slots are noteworthy. A convenience store manager from Trenton was arrested and charged with stealing $23,000 from his employer and losing it all at Hollywood Slots. A 41-year old woman was sentenced to three years in prison for stealing $43,000 from elderly patients at a Bangor facility where she worked and gambling it away at Hollywood Slots. A Portland apartment manager was charged with stealing $260,000 from tenants and gambling it away at Hollywood Slots and other gambling venues.

In addition, the story of a woman in her mid-50s who lost more than $100,000 at Hollywood Slots, drained her pension fund and jeopardized her marriage after becoming addicted to the slot machines found its way into Legislative debates over expanded gambling. (See One Woman Finds Lure of Slots Can be Costly, by Meg Haskell, March 21, 2007) A decorated soldier committed suicide, following a gambling binge at Hollywood Slots, an incident that led to the introduction of legislation in Congress to ban slot machines at US military installations.

Addiction: More than 100 people have voluntarily placed their names on a "self-exclusion list," giving the management of Hollywood Slots permission to kick them out if their addiction compels them to show up to gamble. And they do show up - in wigs and disguises to try and enter undetected, according to the management of Hollywood Slots. And while the state continues to maintain that few people are calling its gambling hotline, calls from Maine to the National Gambling Addiction Hotline have soared - from just 118 in 2004 to over 1,000 last year.

"If Hollywood Slots has helped the economy, where's the evidence," Bailey asked. "There's no question that some people are getting rich, but it's not players at the casino, residents of Bangor or the state of Maine."

COMMUNITY CASE STUDY
Lawrenceburg Indiana:

Lawrenceburg Indiana initially saw a lot of benefits to hosting its casino, but as usual, casinos have a corrosive effect that will be felt over time. In this case, increasing crime, decreasing revenue and layoffs.

Casino transformed Lawrenceburg, but at what cost? Gambling offers benefits, but also risks
WLWT5 Cincinnati
February 27, 2013

Spin the wheel, pull the handle, place your bets! If you love to gamble, you're going to have another choice in just five days.

Horseshoe Casino Cincinnati opens to the public Monday, but is it a smart long-term gamble for the city?

No one knows the impact a casino has on a community better than the residents of Lawrenceburg, which has been transformed since Argosy Casino opened in 1996.

It's since changed its name to Hollywood Casino, which at one point generated $60 million per year for the Dearborn County town.

The revenue has paid for new streets, sidewalks, parks and fire stations, and Lawrenceburg Mayor Dennis Carr said the casino has been a boon for the town.

"This town is set up for another 50-75 years," Carr said.

Thousands of jobs were created, and the city's school district hit the jackpot, gaining nearly $1 million per year.

Parents don't buy books, and students who keep a C average or better earn up to $1,800 yearly in college tuition for four years.

Superintendent Karl Galey has seen the benefits first hand.

"When education was cut in the state of Indiana, fortunately, due to the money we received, we were able to receive that money and use it so we did not have to cut any staff or programs during that period of time," Galey said.

More money and programs have equated to higher test scores.

Four years ago, Lawrenceburg High School was rated a D. The graduation rate was about 70 percent. But now the school has earned a B rating and the graduation rate is up to almost 94 percent.

But with gambling and growth comes crime. Dearborn County Prosecutor Aaron Negangard expected an increase in crime, but he's been surprised by how much.

He compared the trade-off to making a deal with the devil.

"It always sounds good, but then down the road, it's not nearly as good as the deal you got," Negangard said.

In 1995, before the casino opened, Negangard's office prosecuted 200 felonies in the county.

Last year, they had more than 1,000. His office has added prosecutors, cops and jail space just to handle the case load.

"We've had lots of dangerous people come through the casino," Negangard said. "We've had some very big drug dealers come through the casino."

The deck is now stacked against Lawrenceburg. The extra money the city's been used to is dwindling.

Last year revenue at Hollywood dropped more than 9 percent, attendance was off 14 percent and last September, about 160 workers were let go.

The city is feeling the pinch, too. Last year, revenue for Lawrenceburg was down almost $15 million from the best year, in 2006.

Carr admits with the Horseshoe opening up in Cincinnati next week, Lawrenceburg's luck may be running out.

He's bracing for a 30 percent to 40 percent decrease in revenue this year.

"The jobs, I don't anticipate laying off right now, but you never know," Carr said.