The Kentucky Chamber of Commerce and a few other well-meaning but terribly uninformed business organizations have expressed their support for casino gambling in the Commonwealth. It is a profound disappointment and a sign of needed reform that the leaders of these organizations are supporting casino gambling, because any objective look at the experience of other states and localities with casinos would lead them to a wholly different conclusion. The explosion of gambling expansion since the 1990’s has done little if anything in the way of positive economic development, but it has wrought terribly expensive consequences for business, families and governments. When the leaders of our business groups fail to do their homework on an issue as important as this one, perhaps it’s time for us to start talking about new leaders and/or new business groups.
Organizations supporting casinos tell us that casinos will be good for Kentucky, that casinos will bring new jobs, profits, tax revenue and the all-important subsidies for Kentucky’s thoroughbred industry. Dr. Earl Grinols holds two Summa Cum Laude degrees, the PhD from MIT, served as Senior Advisor to the President’s Council of Economic Advisors, and has published more than 80 books and articles. Since 1990, he has studied the economics of gambling in a comprehensive investigation funded independently of both gambling supporters and opponents. His findings and those of other studies we cite have resulted from exhaustive analysis of data generated from the casino explosion in the United States since the 1990’s.
Job Cannibalization
The favorite tactic of casino advocates across the country has been to cite the number of jobs created by casinos. Dr. Grinols (Gambling in America: Costs and Benefits, 2004, Cambridge University Press) found that casino jobs rarely if ever represent new employment and economic development. Rather, they compete with established businesses in the service and entertainment sectors for employees. Employees in service sector jobs are often from outside the community. The payroll taxes paid by casinos are generally a substitute for payroll taxes already paid by existing businesses. The economic gains casinos supposedly add to local economies result from the losses of existing businesses. Casino employment displaces local economy jobs without improving resident well-being.
Revenue Losses
Casino supporters often suggest that the presence of a casino produces new economic activity and revenues. In reality, casinos reduce revenue from general merchandise and miscellaneous retail and wholesale trade. The effect of an additional $1000 in casino revenue is to reduce sales in these categories by $142 within 0 to 5 miles from the casino, and an additional $217 for businesses 5 – 10 miles away. The average loss for an additional $1000 of casino revenue increases to $381 when also considering businesses 10 – 30 miles away. Given KEEP’s current projections of $1.2 billion in casino revenue, Kentucky businesses within 30 miles of casinos will lose more than $400 million, resulting in job losses and reduced tax revenue.
Employee Related Costs
Casino supporters will never report the well-documented other costs to businesses in casino communities. These additional costs include lower employee productivity, higher employee absentee rates, and gambling-related crimes. The social costs of casinos born by other businesses are indisputable based on experience from elsewhere. Entertainment business including hotels, restaurants and destinations suffer in casino trade areas. Downtown businesses, including those in several of our Renaissance Kentucky communities, will suffer the most when casinos locate in suburban areas.
In summary, the casino sector only provides growth that is in equal proportion to the shrinkage of other economic sectors. Casinos operate like a toll house that uses a community and surrounding areas as a platform for conducting its business, extracts its profits and takes them elsewhere.
i do not belive in it and i think it is against the work of god