||More States Betting on Casino Gambling for Jobs, Revenue
The competition for Americans' gambling dollars is heating up, as several states eye major casino projects in a bid to reverse their fortunes in a tough economic climate.
And if approved, the projects could pose a threat to Las Vegas, long the nation's mecca for casino gambling.
These come on the heels of a new Massachusetts law that authorizes up to three resort-style casinos and one slots parlor, with one possibly in Boston.
- In Florida, a state Senate panel this month approved a bill that would pave the way for up to three casinos, including one possibly in Miami.
- In New York, Gov. Andrew Cuomo has proposed expanding casino operations at the Aqueduct Racetrack in New York City's Borough of Queens and called for a constitutional amendment to allow casino gambling across the state.
- And lawmakers in Illinois are trying to revive an effort to bring a casino to Chicago.
Authorizing casino gambling is "easy politically right now," says Douglas Walker, associate professor of economics at South Carolina's College of Charleston and author of The Economics of Casino Gambling. "People want jobs and they don't want higher taxes. Legalizing casinos can be argued to create jobs and tax revenues."
Never mind that some gambling analysts say that gambling doesn't help the long-term financial stability of a state.
"States see an uptick in revenues when they expand gambling," says Robert Ward, deputy director of the Nelson A. Rockefeller Institute of Government. "That does not mean they become more fiscally stable."
The potential expansion of casino operations across the country -- especially in major cities like New York, Miami and Boston -- has Las Vegas on edge, just as it's pulling itself out of a three-year-long rut.
Florida casinos could pose threat
The 41 casinos on the Las Vegas Strip have seen an uptick in gambling revenue in recent months. Although they reported a combined $2.2 billion in operating losses from mid-2010 through June 30 of last year, it's less than the $2.57 billion lost in the 12 months before that.
Through November, there were 35.97 million visitors, a 4.4% increase from the first 11 months of 2010, according to the Las Vegas Convention and Visitors Authority. The hotel occupancy rate in the first 11 months of last year was 84.8%, up 3.7 percentage points from the previous 11 months.
The upscale casinos and accompanying entertainment and dining options that developers envision in cities such as New York and Miami could cut into that, some analysts say.
"They're a much more competitive threat than an Indian casino in Oklahoma," says William Eadington, a gambling industry expert at the University of Nevada at Reno. "The world is not going to collapse next year, but it's not great news (for Vegas) over the next five or 10 years."
Of all the states considering gambling, analysts say Florida could be the most successful at drawing tourists from Las Vegas.
The bill in its Legislature that would pave the way for casinos isn't a done deal. It faces opposition from the likes of the Florida Chamber of Commerce and Walt Disney World.
But the Malaysia-based Genting Group, one of the world's largest gambling corporations, already has planned a $3.8 billion waterfront complex in Miami with a casino, shopping mall and restaurants.
"I'm not sure how many more people are going to go to New York or Massachusetts just because they have casinos now," Walker says. "But among 'beach options,' Miami might look a lot more attractive now because it's one additional amenity the city would offer if it had casinos."
The Genting Group also is behind the proposed Aqueduct Racetrack project in New York, which would include the country's largest convention center.
Plans there call for three hotels with 3,000 rooms total, an entertainment facility and an expansion of a casino that began operating at the racetrack in October.
Cuomo, a Democrat, has made the Aqueduct project the crux of his job-creation strategy.
Las Vegas has other appeal
Some analysts and industry leaders say they're not so worried about Las Vegas' future.
The introduction of regional casinos in states such as Connecticut and Pennsylvania hurt neighboring places like Atlantic City, but didn't make much of a dent on Las Vegas.
And today, gambling makes up less than 40% of Las Vegas' visitor revenue, down from the more than 60% it used to represent. It's the 13th consecutive year that gambling has made up less than half the Strip's revenue, and the lowest percentage ever recorded, says Michael Lawton, senior research analyst at the Nevada Gaming Control Board.
"It's the concentration of first-rate hotels, the shows, the shopping that bring people to Nevada," says Frank Fahrenkopf, president of the American Gaming Association.
Or as David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas, puts it: "When you stop having movies like The Hangover made, that's when Las Vegas is going to be in a lot of trouble."
(Source: USA Today, 01/23/12)
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