you know you’ve got trouble.
“Nobody’s ever paid that much for a casino license,” said Clyde Barrow, a casino specialist at the University of Massachusetts at Dartmouth. “I can’t see anybody putting up that kind of money to license a slot parlor. This is really an eye-popper for me.”
The whole article is a litany of embarrassments for Cahill’s misguided proposal to build quickly erected, warehouse-like structures to house a bunch of slot machines, an idea that the Globe rightly calls a “desperation bet.” PA’s slot licenses sold for 7% — that’s right, seven percent — of what Cahill estimated. All of Cahill’s numbers are based on pre-recession numbers that everyone in the industry says are now woefully outdated. And, in other news, federal law apparently bars his proposal to privatize the lottery. Awkward.
And this is the guy who wants to challenge Governor Patrick, either as a Democrat or as an independent? Not with half-baked ideas like this.
he knew federal laws prevented him from privitizing the state lottery system, yet ‘hoped’ Obama’s administration would change that… because, um, yeah, that’s what Obama ran on when he was talking about change!
<
p>not even toast, burnt toast.
How is it that Cahill can use overly optimistic numbers on both the sale of slot licenses and the lottery? One affects the other. As the state issues more slot licenses, the value of the lottery to a private investor decreases.
<
p>Unless one company wants to bid on both the lottery and a slot parlor, they’re going to be competing for an overlapping market. As Twin River and the declining lottery revenues show, that market is currently depressed. The credit markets are tight; why would you lend to someone going into that sector enough to cover fees of Cahill’s description?
I looked up “Clyde Barrow” on Wikipedia and it said he died in 1934. He did seem to be an expert on organized crime, though.
but I haven’t seen anyone show how his methodology is wrong. His statement makes him more credible in my eyes. That being said, slots is a loser. Twin Rivers pretty much sealed it.
There’s all sorts of things you can’t account for when your data is based on counting license plates. Moreover, there are probably different behavioral patterns for people commuting 20 minutes versus 200. You can’t assume people coming from afar spend the same as people who come from nearby. Some may say that people coming long distances spend more as their money is more discretionary in nature, but then again, the bulk of a casino’s revenue comes from its problem gamblers on the slots… which comes directly from the area the casino is built (within 50 miles).
<
p>Plus, what about people who aren’t being counted — and where do they come from? Who comes in buses? Where are those buses from? What about public transportation? Who’s renting cars? Where do those rental cars come from? Too many variables, even if you could somehow account for player behavior.
<
p>It’s very difficult to know how close his method is to being right, but it’s very easy to spot potential flaws – ones that could wildly alter the actual results if you even could take those variables into account.
<
p>He’s also worked for the industry before – a pretty long history, in fact. So it’s tough to see his rosy numbers and think, for a second, that there’s no bias. Until more people reproduce his results and test the variables his studies don’t account for, you can’t look at the results of his studies and consider them very scientific. Interesting, maybe, but they’re not scientific.
Ryan, you make it sound as if counting license plates is the only form of evidence Barrow uses to determine revenue and patronage. And you make it sound as if he’s the only one who uses this research method. Maybe you should read a bit further into the subject before you criticize. The Journal of Travel Research also uses this method to determine origination and patronage, amongst other methods. It has been peer reviewed and is widely cited and used, therefore making it scientific. And one more thing, what empirical evidence do you have which suggests “the bulk of a casino’s revenue comes from its problem gamblers on the slots… which comes directly from the area the casino is built (within 50 miles)”?
I beginning to think that this is another issue– like global warming– in which “science” is hyper-politicized to the point that the outcome of any analysis can be predicted by the political views of the analyst.
<
p>It makes it hard to form conclusions because one cannot reasonably believe anything that is uttered by the “experts” on either side.