A continuing series by past Lakewood city councilmember John Arbeeny.
Gambling Myth #2 “Gambling is good for Lakewood’s economy” would have you believe that there are economic benefits from gambling. In reality exactly the opposite is true.
Even Greg Bakamis, manager of the Great American Casino admitted that “I would love to be a destination casino. But it’s not likely. Our clientele will be local citizens for the most part.”
So much for the assertion that casinos will bring in outside money to Lakewood and pump up our economy. Rather it’s our money they are pumping out of the economy. Yet who is the Vice Chairperson of our esteemed Lakewood Chamber of Commerce? You guessed it: Greg Bakamis … a case of a fox guarding the hen house.
Gambling in Lakewood was projected to earn about $22.7M in 2008 and pay about $2.5M in gambling taxes. It should be patently obvious that you can’t take $20M+ out of an economy and inflict another $15M in social costs and still have that same $35M to purchase goods and services in Lakewood. The money is gone and nothing remains behind.
If for instance, you buy a car at the Ford Dealer, the car remains in Lakewood, you buy gasoline, tires, maintenance and other services, use it for transportation to and from work and to make purchases at other local businesses. That money circulates repeatedly again and again in our economy, each time generating sales taxes. Gambling removes that money from circulation and leaves nothing behind except a hole in the economy.
The proliferation of casinos can be disastrous for local small businesses.
Take a look at what happened to small businesses in Atlantic City when the casinos moved in. An independent study of Iowa cities compared the growth rate in taxable retail sales of six mid-size cities without a casino to four similar size cities with a casino, between 1996 and 2004. The average annual rate of growth of taxable retail sales in the six cities without casinos was 3.4%, compared to 0.7% for the four cities with casinos.
Ever notice how casinos often have “cheap eats and drinks”? These are subsidized by their gambling patrons who lose money due to house odds or rake. This puts the casinos in direct competition with local restaurants and other businesses which do not have gambling money to subsidize their operations. Casinos are “economic weeds” that choke out real economic growth.
Think too about the amount of money wagered in casinos. A casino “rake” of 5%, and pre-tax income of about $22.7M, means that a staggering $450,000,000 was wagered. Can you name another business where that much money changes hands in the course of business and is not subject to a B&O and a sales tax?
Every other retail business must collect sales tax on each transaction while the casino does not. If the casinos had to collect an 8.8% sales tax on what’s wagered on each game, the tax paid would be $40M+, not the paltry $2.5M they currently pay. This “tax holiday” gives the casinos a tremendous advantage over businesses that are subject to both B&O and sales tax.
Lastly, the value of local real estate is negatively impacted by gambling.
Commercial real estate values are determined by the business’ ability to generate income. When that income is negatively impacted by bad roads, crime, recession or similar situations, the value is reduced. Gambling is one of those negative impacts. It has a similar impact on residential real estate as well. Who wants to live in a community that thinks six or more casinos are just “great?” “Coming to your neighborhood for your convenience: your very own casino!” Ok, now go out and try to sell your house, your business or your building. Gambling steals from all of us.
If you’d like to learn more about the impact gambling has on Lakewood and become part of the solution, I’d invite you to go to www.SaveLakewood.com. Find out how you can help bring the current initiative to ban casino gambling to a vote of the people. Time is short for signature gathering (4 July 2008) and we must have enough signatures (about 5,000) to qualify the initiative for the ballot.
Your help is vital! You can make a difference! Direct government via the initiative process when government fails to act: a clear winner for Lakewood voters! Please forward this e-mail to people on your personal mail list and urge them to act. Petitions for your signatures can be downloaded from www.SaveLakewood.com.
One more thing. If you believe that the people of Lakewood should not have to support the gambling industry in our community, send your council members an e-mail at firstname.lastname@example.org.
Past Council member and Deputy Mayor
Letters to the Editor are submitted by readers and do not reflect the opinions of The Suburban Times. Submit your letter to email@example.com. Letters may be edited for length, content or formatting.