As many of us have long suspected, the estimates the gambling interests and their front groups are using are WRONG!
Citizens for a Stronger Massachusetts has released a newly completed analysis of the Local Aid, Job Estimates and Revenue Projections for the proposed casino legislation that proponents have sold on the grounds that it would create thousands of new jobs and millions of new revenue for state coffers.
The new analysis shows:
“Proponent job estimates are at best, wildly optimistic. The U.S. Department of Commerce estimates that, for every $1 million diverted from household spending in Massachusetts, the state loses 8.2 jobs. Casino supporters estimate they will produce between $300 million and $450 million in tax revenue. That revenue will come from diverting between $700 million and $1.3 billion from household spending to casinos, killing between 5,700 and 10,600 Massachusetts jobs – approximately the same number of permanent jobs claimed by casino supporters.
Local aid will be hurt, not helped, by casinos. The consensus of all studies predicts a 5 percent to 10 percent decline in Lottery revenue after the arrival of casinos. At the House estimate of $1.2 billion in taxable gaming revenue (nearly double what state residents now put into casinos), that means a potential loss of $90 million or more in local aid to cities and towns.
Revenue estimates are, at best, rosy and completely out of date. The Governor said state residents already drive to Connecticut casinos and ―spend $1.5 billion dollars . . . right now‖. The House said casinos would generate $1.2 billion. The Senate now claims $1.8 billion to be had for Massachusetts. The back-up for these figures appears to be based on ―pre-recession‖ reports that are extraordinarily outdated. The most recent data from UMass/Dartmouth’s 2011 study shows that the amount gambled and lost by Massachusetts residents in Connecticut casinos was merely $486 million (and $613 million overall). At the proposed 25 percent casino tax rate, this equates to only $121 million in gaming tax revenue, of which only 20 percent to 25 percent is going to local aid. Recapturing all of this revenue would produce only $30 million in new unrestricted local aid to cities and towns.
The giveaways in this bill are stunning in an era when confidence in Beacon Hill is at an all-time low. The bill puts tens of millions of dollars at the disposal of the unaccountable political appointees of the Gaming Commission, in perpetuity, to spend in its discretion without legislative oversight. Hundreds of millions of dollars more will be dedicated to other unspecified state projects each year. This bill is a feeding frenzy for special interests.”
As the legislature and governor have rejected requests to do an independent cost/benefit analysis – now they have one. Although it does not contain the rosy predictions they had hoped for, will they study and question, or does their support of casinos have less to do with jobs and revenue and more about bowing to the special interests?
Allow me to rant for just a moment on jobs.
1. It’s really important to understand the difference between permanent and transient jobs. With respect to casinos, construction jobs are transient. Jobs installing the slot machines are transient. Jobs in real estate law, engineering, and architecture setting up the building of the casinos are transient. This isn’t to say that they aren’t important — just that each of these jobs has a time limit, and then disappears, freeing up those employees to work on new jobs somewhere else. Other jobs are permanent. Dealer. Housekeeping. Slot machine repairman. Security.
When you read about the number of jobs created, be sure to filter the difference. Temporary jobs are important, but really easy to fudge. I could hire a team of 20 sheetrock hangers for a year, or I could hire a team of 240 sheetrock hangers for a month. Same amount of work, same amount of wages. How many jobs did I create? The best way to manage this is to claim that I created 20 job-years. That’s the sum of the number of jobs times the length of each job. This helps prevent job count shenanigans. For permanent year-round jobs, this is irrelevant — every full time equivalent job is a single job year. But for temporary jobs, this is essential.
2. Furthermore, what’s “better” — creating 10 jobs which pay $60,000/yr or 12 jobs which pay $32,000/yr? That all depends — are you part of the 10, part of the 12, looking at it from the view of which best stimulates the economy, looking at it from the view of which best reduces unemployment, etc. We need to be really careful with this — on the one hand, lots of jobs are good jobs if you don’t have a job. On the other hand, a permanent working underclass — a group of people who work full time, still can’t make ends meet, and still rely on social services — may not be what we as a society are striving for either. Even if we’re talking about full time permanent positions, clearly a job is not a job is not a job. The salary, stress level, danger level, hours, and stability of those hours matter. They matter to that person’s family, that person’s health, and ultimately to that person’s community. Then again, so does raw unemployment.
3. Economic impact has three components. Direct, indirect, and induced. With respect to the construction of the casino, direct jobs are those who work building the casino. Simple enough. Carpenters, lawyers, electricians, engineers, tin bangers, architects, plumbers, interior designers, painters, landscapers. Indirect jobs are the jobs created to “feed” the direct jobs. Hammer makers. legal pad makers. Wire manufacturers. Calculator manufacturers. HVAC duct fabricators. Pencil factory workers. Plumber’s tape salesmen. People who make those swatches of carpet and paint. Paint can lid putter-oners. Sod roller uppers. These jobs are all real, and the number of people employed in each of these industries is entirely dependent on how many casinos, houses, shopping malls, tool sheds, schools, and other buildings are being built at any one time. Finally, there are the induced jobs. These are a bit fuzzier. When the casino goes under construction, a bunch of folks will show up to do the work. They may stay in a local motel, dine at local restaurants, spend their money. Not on tools or resources for work — their personal spending. This spending is induced — if the casino wasn’t being built, then that number of people wouldn’t be working building the casino, and they wouldn’t have the money in their pocket to spend. All three can be estimated by economists to varying degrees, and all three are important considerations.
[/rant]
why did the embedded youtube video show up in preview, but not here. In any case, here’s the link. Some editor or other savvy fellow should feel free to embed.
[Your wish, and all that. -ed.]
with the transient jobs being lost. Ahh, all that money from the casino developers being spent on union support, fake statistics and lobbyists…. lost forever.
for the front page!
Before dismissing this seminal study – read it! The jobs projections come from a study of the US Department of Commerce.
You’re correct that it is unlikely that a group would publish a study that contradicts their position – like the pro-jobs, pro revenue study put out by the casino developers that the legislature continues to quote.
The repeated calls for an independent cost/benefit analysis that have been ignored even though the casino industries study obviously does not reflect the experience of States that have invited expanded gambling. There seems to be an unexplained lack of curiosity leading up to a vote on an industry they acknowledge will lead to billions of dollars changing hands.
Gambling has, traditionally, been either banned outright or outrightly segregated so there is no direct impact seen on wider economic growth and social problems, which impact would provide the corpus of any body of research, vast or otherwise. Las Vegas is in the middle of the desert. Atlantic City is an island. Indian Casinos were confined to reservations. The sole exception is Reno which started out as a mining town and boomed in the 30’s and 40’s as the easiest place in America to get a divorce, isolating themselves culturally if not geographically.
I suspect it is this isolation that both prevents cogent analysis of societal impact and presents a false picture of social calm surrounding casino locales…
Since the late 80’s many states have embraced expanded gambling, yet have not fared any better economically than Massachusetts, and in fact have typically done worse. That alone should raise the need for an independent cost/ben analysis.
And this is not just any type of new business, it’s is a predatory industry that has been seen to attract corruption at every level, which generates addiction, increases crime and makes the lion’s share of it’s profits from digitally and ergonomically designed machines that have come under fire since 2007 as potential consumer protection issue according to experts from MIT and Harvard.
Once could also argue that rather than economic development, this industry is yet another that shifts wealth from the lower and middle classes to a small number of extremely wealthy individuals. Literally, the 1%.
And even industry lobbyists agree that, by expanding gambling to casinos and slot parlors, our state government will become both stakeholder and regulator. An uneasy situation at best.
According to a 2006 report by James C. Kennedy, then General Counsel and Research Director, House Committee on Economic Development, and now, ironically an aide to Bob DeLeo,
Is it possible that this is a reason the expansion of gambling as economic policy has not helped other states as much as it was believed it would?
My point is, if anything needs a comprehensive study of costs AND benefits, with fresh post-recession numbers, this is it.
Yeah I’m sure taking back $1.5 billion a year, every year, to the state won’t create a single job or produce a single tax dollar.
Get over it. The prohibitionists are losing this one.
Be happy with your damn seat belt laws and your War On Drugs.
Subject lines of melbedewy comments —
Pathetic (0 Replies)
Here’s one for you (0 Replies) {Note — This one ends with “Duh?”]
Delusionary (0 Replies)
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Total Fraud (0 Replies)
Lincoln, Douglas, meet melbedewy.