People typically do not patronize other businesses while going to or from a casino and Casinos will cannibalize some local small businesses

Professor John Kindt of the University of Illinois reported in the Michigan State DCL Law Review in 2003 that, “in a convenience gambling economy, discretionary spending is diverted from other forms of entertainment and consumer expenditures to casinos and other gambling establishments. Restaurants, hotels, and other competing local businesses lose revenues and fail.”

An analysis of tax receipts in Illinois for a twenty-one month period revealed casinos brought an increase in business to gas stations while having a negative impact on general merchandise, miscellaneous retail and wholesale trade and drinking/eating/food. (Gambling in America p74-75)

New business opportunities created by a casino include pawn shops, title loans, pay day loans, bankruptcy attorneys, credit counseling, bail bonding, mental health counseling, family counseling and abuse centers, collection agencies, accounting firms (to safeguard from embezzlement), criminal defense attorneys and gamblers anonymous chapters.

Despite an initial surge in jobs, casinos lead to a net job loss, not job gain

Dr. Grinols (Gambling in America: Cost and Benefits in 2004) points out that, “according to research not sponsored by the casino industry, commercial casinos nationwide generated job losses in more than 42 percent of the counties with casinos.”

The fundamental reality is that within their market, casinos neither create nor destroy jobs.  It is true that if unemployment is present, a new business might have the temporary effect of reducing unemployment below the level it otherwise would have taken; however, in the long run, employment and unemployment are determined by overall business conditions and macroeconomic policy.  Expansion of the casino sector comes at the expense of other sectors whose revenues are diminished when they are diverted to the casinos.  (Dr. Earl Grinols, Gambling in America p37)

“Throughout the 1990s between 80 to 90 percent of casino revenues were generated by automation--video gambling "machines"--whose revenues did not require employees with concomitant job salaries, health benefits, uniforms, retirement benefits, vacations, and other benefits that would be required in the consumer jobs economy. “ - [Michigan State DCL Law Review Summer, 2003 Mich. St. DCL L. Rev. 281 DIMINISHING OR NEGATING THE MULTIPLIER EFFECT: THE TRANSFER OF CONSUMER DOLLARS TO LEGALIZED GAMBLING: SHOULD A NEGATIVE SOCIOECONOMIC "CRIME MULTIPLIER" BE INCLUDED IN GAMBLING COST/BENEFIT ANALYSES?]

The extreme financial stress and employment difficulties associated with problem and compulsive gambling can lead to unemployment and required periods in which government assistance is needed.  Social cost include therapy and treatment costs, unemployment insurance, Medicaid, energy assistance and the cost of other social services such as welfare and food stamps.  (Gambling in America, p144)

Casino jobs will not be high paying jobs

Most jobs will be entry-level $6-$12/hour – this is an industry that relies on tips to employees in most positions. Many of the jobs will be to people who live outside the city limits.  (data compiled by Tom Coates, Consumer Credit Counseling Services of Des Moines)

Increase examples of bankruptcy

“Kansas City’s casinos opened in 1994.  By 1996, bankruptcies were on the rise in Kansas City.  The Kansas City offices of CCCS reported, “Before the [casino river] boats, we saw maybe one person a year because of a gambling problem.  Now about twenty people a month come in because of gambling-related issues.”

Michelle Clark Neely, writing for the St. Louis Federal Reserve, concluded that, “Compulsive gambling is increasingly being blamed for the rising tide of bankruptcy, especially in the states that have casinos.”

Wisconsin opened its first casino in 1991.  In 1996, the AP reported from Wisconsin, “People in eastern Wisconsin are seeking bankruptcy protection at a pace 25% greater than last year, and gambling is often a factor, bankruptcy lawyers and financial counselors said.  According to them, one in ten bankruptcies is linked to gambling debts, more than double the rate of years past.”

 The connection between casinos and bankruptcy is corroborated by the testimony of attorneys who specialize in bankruptcy and credit-counseling services. A 1995 study in Minneapolis of 105 bankruptcy filers found that 52 percent had gambling losses; the average gambling loss was $22,000.

“A study conducted by Iowa State University also found a connection between casinos and bankruptcy.  SMR Research Corporation of Hackettstown, New Jersey, reported in 1998 that information from experts on the financial impact of gambling has been consistent that more than 20 percent of compulsive gamblers have filed for bankruptcy as a result of their gambling losses.

“The 298 U.S. Counties which have legalized gambling within their borders had a 1996 bankruptcy filing rate–18 percent higher than the filing in counties with no gambling, and the bankruptcy rate was 35 percent higher than the average in counties with five or more gambling establishments.  In areas near major casinos, gambling-related bankruptcies account for 10 to 20 percent of the filings”  Follow-up studies three years later “confirm a finding that SMR made in 1997:  Some of the rise in personal bankruptcy has been related to the dramatic 1990s spread of casino and other legal gambling in the U.S.  (Tahira Hira, Iowa State University and SMR Research Corp)

A bankruptcy attorney from Jefferson City testified before the City Council that he had handled several bankruptcy cases here due to the casino in Boonville – 60 miles away!  Extrapolate that to other attorneys in this area, also, other cities within a 60 miles radius of Jefferson City: Marshall, Fayette, Moberly, Sedalia, Columbia, Fulton, California, Versailles, Glasgow, the Lake, etc., and the number of bankruptcies becomes huge even though each is quietly dealt with and the casino charges ahead.

“You can’t endlessly suck money from the pockets of local gamblers, send 20% or more money to out-of-state operators, and not disrupt the local economy.”  USA Today November 2, 1994

Increase in failing to pay child support and other personal financial obligations

The family costs related to gambling include the costs of divorce, separation, spousal abuse, and child neglect and abuse.  Children of pathological gamblers report reactions of depression, anger, and sadness.  Many of the spouses and children of pathological gamblers are physically and verbally abused.  Research conducted for the National Gambling Impact Study Commission found that 53.5 percent of pathological gamblers reported having been divorced, whereas only 19.2 of the non-gamblers were divorced.  Again, we make the obligatory observation that there are other causes of divorce that may interact with pathological gambling.  Many of these costs are non-monetary, but others imply real resource costs to society.  Most are rarely measured or quantified.  Those that do enter into social computations typically arise when social intervention becomes necessary, as in the case of divorce.  These costs represent resources lost to other uses and can be measured by the cost of the services provided. (Gov’t Accounting Office, 2000, p7)

Employee problems:  theft, embezzlement, and lost productivity

The National Research Council reported to the NGISC that “as access to money becomes more limited, gamblers often resort to crime in order to pay debts, appease bookies, maintain appearances, and garner more money to gamble.” The NGISC reported, “in a survey of nearly 400 Gamblers Anonymous members, 57% admitted stealing to finance their gambling.  Collectively they stole $30 million for an average of $135,000 per individual.  One witness before the Commission indicated that ‘80 to 90 percent of the people in Gamblers Anonymous will tell you they did something illegal in order to get money to gamble.’  A lot of them do white collar crimes, fraud, credit card and employee theft.”

Business and employment costs of gambling to employers include:
• Lost productivity on the job because of reduced performance
• Lost time and unemployment that includes sick days off for gambling, extended lunch hours, leaving early and
   returning late due to gamblinhg, a firing because of gambling problems such as employee embezzlement.  (Gambling
    in America p135)

For every $1 collected in revenue, $3 are spent on the social problems (NO NET ECONOMIC BENEFIT).

The National Gambling Impact Study Commission reported that for every $1 collected in tax revenue from the casino, the state spends $3 to deal with the problems it creates.

In recent economic history, the taxpayers have directly and indirectly subsidized legalized gambling activities. The field research throughout the nation indicates that for every dollar the legalized gambling interests indicate is being contributed in taxes, it usually costs the taxpayers at least 3 dollars-and higher numbers have been calculated. These costs to  taxpayers are reflected in: (1) infrastructure costs, (2) relatively high regulatory costs, (3) expenses to the criminal justice system, and (4) large social welfare costs.
Ohio Northern University Law Review 2003 29 Ohio N.U.L. Rev. 363  Internationally, The 21st Century Is No Time for the United States to Be Gambling With the Economy: Taxpayers Subsidizing the Gambling Industry and the De Facto Elimination of All Casino Tax Revenues via the 2002 Economic Stimulus Act

Because of gambling’s negative economic and social impacts Dr. Grinols concluded “casino gambling fails a cost-benefit test by a wide margin.”

Dr. Earl Grinols of Baylor University and David Mustard of the University of Georgia in their study “Business Profitability vs. Social Profitability,” outlined gambling’s impact on local economies.  Updating for 2006 numbers, $1.5 billion was gambled away in Missouri casinos.  The state collected $314 million for taxes, however, with $814 million in social cost, there was a potential net loss of $500 million dollars.

Pathological and problem gamblers cost are equal to an additional recession in the economy every 4 years. – Earl Grinols, Professor of Economics at the University of Illinois, Gambling in America: Cost and Benefits, Cambridge University Press 2004 pg 177

Casinos put money some into the community during the initial construction, through taxes and payroll, all of which are investments or costs necessary to steadily drain money out of the community.

Casinos may use some local contractors and vendors, but will frequently use out-of-town companies instead.

As Dr. Earl Grinols, currently professor of Economics at Baylor University explains in his book Gambling in America: Cost and Benefits in 2004, “‘these (casino) companies do not take their profits and throw them back into the local economy.’”  Statistics range from 35% to 87% of the profits are sent out of states in the form of vendor contracts, capital investment dividends and parent company profit sharing.  This money does not get reinvested into the community, which is the foundation of economic development.

In speaking of rural Indian casinos, Dr. Earl Grinols stated, “Lack of general benefits to rural counties is consistent with the finding that the market for rural Indian casinos is commonly no larger than the host county plus part of the neighboring county or counties.  Casino revenues, therefore, must come at the expense of other local sectors. (Gambling in America p39)

The price of . . . gambling is turning out to be every bit as high as opponents had said it would be – not only for those who get caught directly in its web, but for everyone else as well.  (Editorial, Minneapolis Star Tribune, 1995)

Jefferson City will not become a “destination” with a casino

The big casinos in Missouri have consistently said they will never be a “destination” unless the Loss Limit is repealed.

A Chicago reporters wrote, “Hopes for a tourism boom run counter to what industry experts have learned in reecent years: gamblers stay close to home if given the chance.”  (Papajohn and Reardon. 1994, Section 1, p1 and 9)

Casinos are an equal opportunity destroyer of people and families -  they can financially devastate the poor, middle income and the wealthy.

Riva Wilkinson, a sheriff’s wife, embezzled $418,000 over a period of 12 months from her employer to gamble at a local casino.  The FBI logged 1,062 hours of investigative time, local police also investigated, her former employer had to hire an accountant to straighten out the books, the U.S. Attorney and court system (including judge, jury and numerous court employees) plus prison and parole officials all required the expenditure of public funds – a total cost to the public of $100,646 was documented (while many costs were not itemized).  (Minneapolis Star Tribune, Dec 4, 1995, p6)