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Adam Vaughan: Casinos are bad for cities

July 13th, 2012 · 2 Comments

By Councillor Adam Vaughan (Ward 20, Trinity-Spadina)

Not convinced?  Then check out what’s happening in every corner of the continent. Google “No Casino” and see what comes up. Whether it’s Vancouver or Miami, Manhattan, Gettysburg or Pawtucket, city after city, town after town, everyone seems to be fighting a casino proposal.

Now Google “Casino debt.” Just as quickly, you find out why, from Nevada to Nantucket, from Windsor to Niagara, casinos all over North America are going broke. And when they fail, the cities they reside in fail too.

Like the compulsive gamblers they create, casinos all over the continent are losing big right now. Instead of walking away from their losses, they are upping the ante by trying to open new operations in more cities. What they are hoping to find is a new generation of gamblers to keep the house afloat. Let’s keep Toronto as far away from this mess as possible.

There are good reasons to avoid a casino. The facts and experience of other municipalities make the case pretty clear. In Montreal, virtually 93 per cent of the casino’s revenue came straight out of the local economy (MacIasac 1994:38). This means that money bet at the casino wasn’t spent on clothes, rent or food locally, it was sent to the multi-national operator of the gambling facility.  Money spent on dining and drinks wasn’t spent in local bars or restaurants, it was also sent to the multi-national casino operators.

In Atlantic City, 40 per cent of the bars and restaurants near the casino went bankrupt (Corelli, Memeth and Driedger, 1994b). St. Louis had a similar experience. The most quoted expert economist, Earl Grinols of Baylor University, says that as economic drivers or job creators, casinos are “at best a wash for every job created there is a job lost.”

If the business case doesn’t scare you, consider the impact on the city’s quality of life. From a social perspective, crime goes up. Street crimes, fraud, loan sharking and prostitution rise when a casino comes to town. Before the casino, Atlantic City was rarely made the top 50 list of crime ridden cities. Since gambling came to town they almost always rank near the top.

Casinos are inward looking complexes. Windows are rare; food and drinks served cheap and on site to keep gamblers betting. The head of MGM, when talking to Toronto City Council said that a casino requires one parking spot for every slot machine. Five thousand are forecast in Toronto. Sound like your vision for the waterfront?

One study reports that property values close to a casino drop by about ten per cent. Based on the meagre amount the province shares with local municipalities, the drop in municipal tax revenue will likely outpace whatever cut of the take Toronto gets.

The casino industry isn’t even contemplating paying market-value for public land. The head of MGM has said that if they got a deal on the land, the City could get a bigger slice of the take. This is coming from a company that’s losing money hand over fist in Las Vegas right now.

Finally, there is the impact on the folks who purport to enjoy gambling.  A 2003 report by Grinols calculates the social cost at $289 for every $46 of government revenue. That is over $6 in social cost for every $1.00 generated! While most of these costs are tied to crime, there is a significant impact on healthcare costs. Addicted gamblers cost a lot to cure, they often blaze a trail of financial ruin at work and home, and require treatment to manage their affliction. It’s next to impossible to get this type of help in Toronto now. Manufacturing more problem gamblers will not help. Proximity to a casino is the most significant risk factor related to problem gambling.

Torontonians have considered this issue before and reached the right conclusion. The province is back again and talking up dreams of Celine Dion and Cirque du Soleil tents, conventions and luxury hotels. They won’t produce a business plan, won’t release the studies that support their case, won’t tell us what the city’s cut might be, and they have just passed legislation removing the requirement to hold a referendum on this issue.

Cynical as that might be, it’s probably the only smart part of the proposal because it’s clear that if it did go to a vote, Toronto would say no again. That you can bet on.

Tags: Annex · Editorial

2 responses so far ↓

  • 1 Pavel K. // Jan 12, 2013 at 5:15 pm

    This is a great article. Well argued and concise. Thank you Mr. Vaughan.

  • 2 Diane // Jan 20, 2013 at 10:58 am

    BRAVO ! You pretty much summed up the future of the GTA if Casinos are built.

    They shouldn’t deny the people of Toronto to take this issue to a vote.

    Keep up the great work Councillor Adam Vaughan !