Category Archives: Economics

NCAA March Madness Likely to Lead to Billions in Gambling and Lost Workplace Productivity

Just as the country has calmed down from the huge wave of Super Bowl gambling, a new Selection Sunday and NCAA Men’s Basketball Tournament signals the beginning of another gambling craze.  As the sports world gears up for another year of March Madness its important to understand the impact that office pools have on employers and the communities. Obviously, not all office pools will result in gambling, however, a vast majority do involve illegal gambling. A USAtody article points to reports of online pools that take an entry fee and award cash and prizes. These pools may seem harmless but FBI spokesman Ross Rice explained that,‘“There could be a violation if there’s a payout and if the operators take a cut.” So how many people will engage in office pools this time of year and how will it impact work productivity? The St Louis post dispatch provides some good insight:

Nearly half of U.S. workers have participated in an office pool, and nearly a quarter have watched or followed sports events on their computer at work, according to a recent survey. 10 percent of employees have called in sick to watch or attend a game. 11 percent of workers aged 18 to 24 have participated in an office pool, compared to 77 percent of those 65 and older.

Very few employers offer guidance in their policies regarding office pools, even though it may mean taking a hit in terms of productivity, said John Heins, chief human resources officer for recruiting and staffing company Spherion Corp.

In terms of cost to employers, the Charlotte Observer points to a Chicago-based surveywhich says as much as $1.7 billion will be lost by employers in productivity, which breaks down to $109 million lost for every 10 minutes spent following the tournament. They believe there will be over 37 million workers participating in pools with 1.5 million watching games and results online from their desks.

 ESPN recently quantify the financial impact of just the gambling: 

On the low end, the FBI estimated in 2013 that $2.6 billion was bet illegally on the tournament. On the high end, veteran bookmakers estimate the number to be anywhere from $12 billion to $26 billion. Friendly bracket pools are everywhere, with most everyone betting on the NCAA tournament in some form. But there are bets, and then there are bets. You don’t get to $26 billion with $20-per-sheet office pools.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

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Major Gambling Expansion Legislation Proposed by Florida House

Casino Watch Focus has reported on the ongoing efforts of the Genting Group to bring full-scale, Vegas-style, gambling casino resorts to Florida. Currently, casino’s rest with the Seminole Nation but various attempts over the years have sought to expand beyond tribal gambling. Casino Watch Focus last reported that the current gambling compact with the Seminole Nation, which limits full scale casino gambling games to the Seminole’s in exchange for guaranteed revenue to the state of Florida, was up for renewal and it didn’t look like a deal would be reached this legislative session. If that happens, then Florida could propose its own casino gambling destinations, albeit at the expense of the guaranteed revenue provided by tribal gambling. Florida’s legislative short legislative session started with a new bill being introduced that would allow for major gambling expansion. The Miami Herald explains:

South Florida could become an even bigger gambling haven with two new destination resort casinos and four dog tracks operating slot machines — instead of racing dogs — under a sweeping gaming rewrite filed Monday by House Republican Leader Dana Young, R-Tampa.

The measure, filed in the traditionally gaming-averse House, takes a novel approach to gaming by requiring destination resort operators to buy out active gaming permits in order to operate the swanky casinos.

The bill also helps the powerful South Florida pari-mutuels, which have contributed heavily to GOP election coffers for the last several years, by reducing the tax rate for existing racinos, allowing dog tracks in Palm Beach and Naples to run slot machines, and ending the requirement that dog tracks race dogs in order to offer gaming.

Gaming options would also expand in other parts of the state, such as Jacksonville and Tampa Bay, where wagering on videos of “historical races” would be allowed as a new form of gambling. The seven casinos operated by the Seminole Tribe would also see expanded games as they could offer the full array of black jack, roulette and craps that are available to the resort casinos.

Major opposition to Rep Dana Young’s bill was not far behind. The Miami Herald went on to report:

“This bill would cause the biggest expansion of gambling in Florida history,” said John Sowinski, director of No Casinos, a gaming opposition group backed heavily by Orlando-based amusement part operators like Disney and Universal. “It invites wall to wall casino gambling in Florida, and the social costs and crime that go with it.”

He repeated the oft-used line of opponents, that casinos in states like New Jersey and Las Vegas are struggling and said “it defies logic for Florida to increase its dependence on gambling at a time when casino economies across America are imploding.”

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


Guest Article: Three Reasons Floridians Should Care About Plight of Atlantic City

Casino Watch Focus has reported on the ongoing efforts to expand gambling in Florida. The recent video released by No Casinos provided a great timeline of how gambling has slowly but surely continued to expand in Florida in ways the voting public usually never intended. As the legislature examines a new round of gambling expansion ideas this upcoming legislative session, it’s important to remember the history that gambling plays not only locally, but all across the country. One local group has done just that. Paul Sago, executive director of No Casinos, has drawn a parallel between the gambling plight of Atlantic City and the resent efforts to expand gambling in Florida. The article can be found online with Sunshine State News:

The plight of Atlantic City shows some glaring truths that Floridians need to be aware of, so that we don’t make the same mistakes. Here are No Casinos’ three main reasons why Floridians should care.

*1. It proves that gambling doesn’t help the local economy.*

The gambling industry loves to spin the fable that casinos are an economic panacea for communities that are struggling financially. The industry promises that gambling will generate new revenue for local and state government. The truth is, money spent in a casino is simply money not spent in another sector of the economy. After gambling has gained a
foothold, local businesses surrounding a casino struggle to stay open. A case in point: After casinos were legalized in Atlantic City, 40 percent of restaurants and one-third of the retail establishments there went out of business. In a well-developed economy like Florida’s, gains in the casino gambling industry will come at the expense of existing jobs and businesses.

*2. It proves that oversaturation is real and could be headed to Florida.*

The expansion of casinos and other venues has resulted in oversaturation of gambling in many regions of the U.S. It’s widely understood that Atlantic City’s problems were caused by a glut of casinos there and competition from new gambling facilities in neighboring states. In fact, according to an Aug. 10, 2014, New York Times article, “more than half the population in the Northeast now live within 25 miles of a casino featuring video lottery, table games or slot machines.”

There are only so many gamblers for casinos to lure, and expanding casino gambling locations causes casinos to cannibalize themselves. Currently, Miami-Dade and Broward counties are home to eight pari-mutuel facilities authorized to have slot machines. There are also seven Indian tribal facilities in Florida featuring gambling options — six in Miami-Dade and Broward counties and one in Tampa.

Now, the gambling industry is seeking approval to build mega-casinos in South Florida, and existing gambling operators in the state want more, too. It never stops.

*3. In order for casino companies to grow they must expand into new markets — and Florida is considered a top prize.*

In order to maintain their profits, casino companies must continually find new gamblers to lose money in their casinos. In 1988 only two states had casino-style gambling. Today, 39 states do.

Florida’s large population and heavy flow of tourists have always made us a coveted target of casino companies. But expansion of gambling here would threaten our family-friendly brand that is the envy of virtually every other state in the U.S. Several years ago Las Vegas tried to
become a family destination and failed miserably. And now, Atlantic City is trying to reinvent its image following an economic meltdown caused by multiple casino closings last year.

It’s quite simple: a gambling brand and family-friendly brand are not compatible.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


American Gaming Association Mysteriously Doubles Economic Estimates for Florida Gambling Expansion

Casino Watch Focus has reported that a newly established Florida Senate Gaming Committee issued a two year gambling study back in 2012. There was plenty of criticism about the company hired to do the study being too connected to the gambling industry. It was reported that the first part of the study, released during the summer of 2013, pointed to potential harm to Florida’s Turisim if additional full-scale Vegas style casinos were allowed. Then, the study’s results were stalledas the results were not as boisterous as the gambling industry had hoped. Now, the American Gaming Association is releasing information regarding Florida’s gambling expansion that is somehow double what was originally reported. A press release by No Casinos explains: 

No Casinos: Pro-Gambling Group Mysteriously Doubles Casino Jobs Claim in Less Than 80 Days

American Gaming Association changes its numbers to make industry look better

ORLANDO, Fla.–(BUSINESS WIRE)–

No Casinos made the following statement based on the re-release of the American Gaming Association’s economic impact numbers:

How many jobs do casinos create in Florida? The number apparently has more than doubled since Sept. 30, when the American Gaming Association released a national report on the economic impact of gambling.

That report claimed there were more than 3,200 casino jobs in Florida, with gambling revenues of $467.6 million. The AGA apparently has corrected itself, now claiming there are more than 7,400 Florida jobs “supported” by gambling, with a total economic impact of more than $1 billion.

“It appears that the first set of numbers wasn’t impressive enough so they cooked up another set,’’ said John Sowinski, President of No Casinos, Inc. “Maybe if they go back a third time, they’ll find the $500 million that South Florida casinos promised our schools every year. Nobody else has been able to find it.’’

The full press release can be read HERE. The SunSentinel Online also spoke with No Casinos and outlined additional information regarding the claim by the AGA and why the true impact to Florida from gambling expansion is not as its being portrayed:

John Sowinski, president of No Casinos Inc., says that the revenues generated don’t really have an effect on the state and that gambling is a “parasitic” business, meaning that the money spent on slots and casino restaurants would merely be spent elsewhere in the state — and the report doesn’t take into account the social costs of gambling.

“The slot revenues run the state of Florida for about 18 hours,” he says. “It is a blip on the screen, a rounding error.

“This is all to do about money that we’d spend anyway, and hopefully it’s discretionary spending, not money that Floridians need to pay their bills. That’s not really economic impact. It’s redistribution backward.”

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


Casinos won’t help Florida’s economy

In an open letter to the Miami Herald,Paul Davies and Barbara Whitehead, Institute for American Values, New York, share a empirical perspective from around the country of why Florida doesn’t need more gambling to help its economy:

In the mad scramble for more gambling dollars, Florida’s timing could not be worse. The state’s legislators are contemplating the addition of casinos as declining revenues in other states indicate the gambling boom is over.

States that come late to the party can still milk money from casinos. But the pickings are getting slim as more markets become saturated and the growth cycles get shorter.

Pennsylvania enjoyed steady growth in casino tax revenues for six years before the returns dropped last year. Increased competition from casinos opening in Maryland and Ohio were partly to blame.

In Detroit, casino revenues dropped 4.7 percent last year in part because of competition from Ohio. In Indiana, casino revenues plunged 15 percent over the past six months, hitting an eight-year low. In Wisconsin, the drop in casino revenue there prompted some to say there is a gambling glut.

Colorado, Missouri and New Jersey have all seen sharp declines in casino revenues. Louisiana’s casino revenues were down 4.4 percent in December, including a 16 percent drop in New Orleans. Mississippi’s revenues fell almost 5 percent last year and are down 27 percent since hitting a peak in 2007. Since then the casinos have slashed 8,500 jobs.

A study by the Rockefeller Institute found that casinos do not solve state budget woes, but instead provide unpredictable revenues. That can cause problems for states that become hooked on casinos as a revenue source.

Delaware is a harbinger for other states looking to cash in on casinos. The tiny state was early to the casino game, opening slots parlors at three racetracks starting in 1995. Initially, tax revenues soared and eventually casino gambling accounted for 8 percent of the state’s budget. But as soon as casinos began opening in Pennsylvania in 2006, Delaware’s gambling revenues began to drop. The recent addition of casinos in Maryland has further reduced Delaware’s casino revenue.

In response, Delaware tried to add more gambling options, including legalizing sports betting in 2010 and online gambling in 2012. That did not stop the losses. Last year, the casinos began threatening layoffs unless the state lowered its tax rate, which is 43.5 percent on gross slots revenue.

Rather than reduce taxes, Gov. Jack Markell gave the casinos an $8 million bailout. So the casino industry has gone from generating revenues for the state to receiving a taxpayer subsidy.

The News Journal, Delaware’s main newspaper, had the best solution: “Delaware should start getting out of the gambling business,” the newspaper wrote in an editorial last year. “It is too dependent on what was once the easy money of a state-controlled monopoly.”

Adding casinos in Florida has similar challenges. The state already has lots of gambling, including Indian casinos and Internet cafes, referred to as “convenience casinos.” Given the gambling expansion in other states, the opportunity for growth from out-of-state gamblers is limited.

Here’s the good news: Florida doesn’t have to go down the road of other states that bet on casinos and are now chasing their losses. Instead, the state would be wise to focus on businesses that grow the economic pie rather than fight for a shrinking piece of it.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


NO Casinos launches parody website against Pro Casino Group

Casino watch focus has reported  on the various means pro casino groups in Florida have attempted to persuade and pass legislation to allow expanded gambling.  They have bought property, paid lobbyist and provided campaign contributions.  They have pushed for subtle expansion, mega casinos and even prepared a ballot initiative to attempt to dupe voters.  Now, they have published a new website in an effort to position expanded gambling in a favorable light.  The Orlando Business Journal’s Richard Bilbao published a great write up on how NO Casinos has issued a great site of their own to refute their claims:

Watch out Anonymous: No Casinos — the Orlando-based anti-gambling advocacy group — is taking website advocacy to a new level.

In response to a pro-gambling website — www.bestforfla.com — that talks about advocating for “integrated resorts” in Florida, the group decided it would be best to address the claims of pro-gambling supporters in kind.

“The latest example of the industry that has no shame being ashamed to utter the name of its own [casinos] product — and the words they want legislators to be on record voting for — is a promotional website they launched a couple of weeks ago. But if you go to their website, http://www.bestforfla.com, there is no mention of casinos or gambling. Lots of pictures of beaches, restaurants and other attractive things that Florida already has,” said a release from No Casinos.

The result? No Casinos launched its own version parody site — www.lessforfla.com — that takes the pro-gambling site to task.

The parody site goes on about the group’s arguments that casinos lead to issues socially and economically including poverty, crime, addiction and bankruptcy. The original pro-gaming site states casinos would result in new visitors, jobs, revenues and more hotels, convention space and other casino-related business.

Being an avid Web surfer, I’ve seen some good Internet trolling, but this is an interesting new strategy to the entire gambling debate.

 

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


Don’t gamble with Florida’s future

Guest Article by John Kindt – University of Illinois professor emeritus. He has testified before Congress and legislatures on business and legal policy issues, particularly gambling.    

 

In 1994, Florida voters rejected a ballot proposal legalizing casinos and accompanying slot machines. The Florida gambling proposal was largely modeled on the Illinois Legislature’s 1990 legalization of casinos.

One of the nation’s first casino jurisdictions, Illinois gambling was imposed top-down on the public despite polls reporting 67 percent of the public opposed to casinos/slots.

Today Florida has its budgetary challenges, but Illinois has the nation’s worst state budget and credit rating — due in large part to $35 billion-$56 billion given away to gambling owners. For two years Illinois did not even fund the pension systems for public employees and has over $105 billion in unfunded liabilities. Illinois also misreported bond offerings from 2005-2009, resulting in the state being cited with pension fraud in 2013 by the U.S. Securities and Exchange Commission.
While it took Illinois two decades to arrive at budgetary insolvency, other states that legalize casinos/slots will eventually emulate Illinois. Once states embrace casinos/slots, gambling owners’ agendas and legalized political contributions dominate statewide economic policies, resulting in continued gambling expansions.

In 1994 both Florida Gov. Lawton Chiles and future Gov. Jeb Bush opposed legalizing Florida casinos/slots. Virtually the entire law enforcement community also opposed casinos/slots, as exemplified by a Florida Department of Law Enforcement (FDLE) report that emphasized in italics that “it has been clearly demonstrated in other jurisdictions that a significant increase in crime and its consequences accompanies casino gambling.”

This FDLE report concluded in bold print: “FDLE joins a large number of other criminal justice entities in  opposition to any form of legalized casino gambling.” In 2006, the substantial crime increases that accompany new gambling facilities was confirmed in a definitive, nationwide 10-year study published by Harvard and MIT.

Also in 1994, Florida Secretary of Commerce Charles Dusseau reported that the casinos/slots ballot proposal was “an attempt at a hostile takeover of Florida’s $32 billion tourism industry by outside gambling interests.” He emphasized that “a consistent result of the introduction of casino gambling has been the cannibalization of pre-existing tourism industry.”

After 1994, the Florida and Illinois congressional delegations were largely responsible for enacting the 1995-1999 U.S. National Gambling Impact Study Commission, which substantiated these concerns. Annually since 2008, the multivolume 2008-2013 United States International Gaming Report, produced in concert with academics nationwide, has confirmed that Florida’s 1994 leaders were correct to reject casinos/slots.

During this same 1990s timeframe, Warren Buffett coordinated an effort in Omaha, Neb., to defeat a proposed “salvation casino” designed to transform the failing Aksarben racetrack into a casino/slots facility — despite two casinos being located nearby in Council Bluffs, Iowa. Instead, Omaha business and government leaders bulldozed the racetrack and transformed the land into a high-tech office park and an extension of the University of Nebraska at Omaha (UNO). During the last 20 years this development has attracted $1 billion in stores, restaurants, townhouses and the new 2012 UNO College of Business — ironically, built on the old racetrack grounds.

As re-confirmed in the last few years by definitive academic publications, the socio-economic costs of gambling are well over $3 for every $1 in benefits. These costs were predicted in 1994 by Gov. Chiles’ team of economic experts, as well as in several 1994-1995 academic articles — including the University of Miami Business Law Journal.

To illustrate how gambling philosophies catalyzed the 2008 economic recession, the website for  60 Minutes has an investigative 12-minute report that can be viewed, titled  Financial WMDs.

Floridians should revisit the crime statistics disseminated by Florida’s 1994 bipartisan leadership and then emulate South Carolina and other jurisdictions that have re-criminalized slot machines and/or other gambling facilities.

Governments cannot gamble their way to prosperity.

Illinois casinos/slots have resulted in $35 billion-$56 billion in “giveaways to gambling owners by takeaways from teachers’ pensions.” Florida and other states that embrace gambling owners will eventually gamble away not only their state budgets, but also the public’s health, safety, and welfare.