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6-26-13 - Springfield - Republican file photo by Don Treeger- Former Massachusetts Attorney General Scott Harshbarger listens as former Connecticut Congressman Bob Steele speaks at an anti-casino rally held at the Christ Church Cathedral.

By Robert Steele

Atlantic City’s casino implosion has come at an inconvenient time for MGM’s proposed Springfield casino. Western Massachusetts residents needn’t look as far afield as New Jersey, however, to question whether this is a good time to be bringing casinos to their area. All they have to do is look at Connecticut.

Opened in the 1990s, Connecticut’s two casinos, Foxwoods and Mohegan Sun, got off to spectacular starts. With no competition other than in Atlantic City, they became the two biggest and most profitable casinos on the planet, drawing over half their combined customers from out of state, creating 20,000 casino jobs, and sending hundreds of millions of dollars a year to the state treasury.

Massachusetts officials repeatedly cited these statistics when making the case for legalizing casinos. But one wonders how many of them have looked at Connecticut lately.

For starters, the casinos have created a pervasive gambling culture in southeastern Connecticut. They’ve skewed the region’s economy heavily toward low-wage service jobs, taken billions of dollars from consumers that would have gone to other goods and services, and led to a sharp spike in the number of Connecticut residents seeking treatment for gambling addiction. According to a 2009 state-sponsored study, there had been a 400 percent increase in arrests for embezzlement in Connecticut since the casinos opened, a rate of increase 10 times the national average.

Moreover, there is little evidence that the casinos have improved the state’s long-term economic health. The state receives 25 percent of the casinos’ slots revenue, which has provided it with more than $6.5 billion. Yet Connecticut today is in the worst financial shape in its history, with the highest debt and unfunded liabilities as percentage of GDP of any state. Nor have the casinos stimulated spillover economic growth in Connecticut, which has repeatedly finished dead last nationally in job creation since the casinos opened.

As Steve Wynn told business owners in Bridgeport when he was proposing to build a casino there: “There’s no reason on earth for any of you to expect that just because people (come to my casino) they’re going to run into your restaurants and stores.”

Despite the negatives, the conventional wisdom has been that the casinos have been a net economic plus for Connecticut because of the jobs they’ve provided and the out-of-state gambling money they’ve attracted. Now, however, the jobs and out-of-state money are increasingly disappearing as the Northeast becomes saturated with casinos.

When Foxwoods opened, there were only ten other casinos in the 12 states of the Northeast, all of them 250 miles away in Atlantic City. Today there are 57 and the number could easily go to 77 including those being proposed for the Boston, southeastern Massachusetts and Albany areas.

As a result of the growing competition, Foxwoods’ and Mohegan Sun’s combined annual slot revenue is already down 35 percent from its peak, the casinos are laying off workers and replacing full-time jobs with part-time jobs in order to reduce wage costs and eliminate medical benefits, while Foxwoods has halted profit-sharing payments to its tribal owners and defaulted on a half billion dollars of debt.

Springfield’s casino backers appear unfazed by Connecticut’s plummeting numbers, and continue to talk confidently about attracting large amounts of new money from outside the region. But the reality is that the growing number of casinos (the U.S. now has almost 1,000) is turning most of them into simply “convenience casinos” for local people. A Springfield casino could consequently be expected to draw the overwhelming majority of its customers from nearby towns and neighborhoods, thereby siphoning money out of the area rather than drawing it in.

According to a new report from an independent group of scholars assembled by the Institute for American Values, the long-term costs of the new regional and local casinos like the one proposed for Springfield exceed their benefits by 3-1. They drain wealth from communities, weaken nearby businesses, hit low-income people the hardest, and reduce civic participation, family stability, and other forms of social capital that are at the heart of a successful community.

With the social, public health, and economic costs of casinos growing and the economic arguments used to justify them unraveling, it would be difficult to choose a worse time to bring a casino into western Massachusetts.



Robert Steele is a former U.S. Congressman from Connecticut and the author of The Curse: Big-Time Gambling's Seduction of a Small New England Town. His website is rhsteele.com.