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Joyce Clark Unfiltered

For "the rest of the story"

A casino in Phoenix?

Posted by Joyce Clark on July 23, 2013
Posted in Casino  | Tagged With: , , , , , , | 3 Comments

There is a story in the Arizona Republic of July 23, 2013 entitled Feds might retake prime parcel written by Eugene Scott. There is a 15 acre parcel of land that the federal government, in a very complicated land deal, sold to Barron Collier Development. It is located on the northeast corner of Central Avenue and Indian School Road. Barron Collier has stopped making $60 million in payments to the feds for that parcel. Ownership may revert back to the federal government.

casino 1Justin Johnson, a candidate for Phoenix City Council and the son of former Mayor Paul Johnson, recently said, “My concern is that if the federal government takes over, that they can develop something without public input and it won’t go through local control, and it won’t fit inside the city’s general plan.” He also offered the worst case scenario for that parcel, “We don’t have to look any further than what is going on in Glendale to see the nightmare scenario which could transpire. A potential casino in downtown Phoenix is not a compatible use in this urban area near neighborhoods and schools.”

As has been repeatedly pointed out, if the Tohono O’odham Tribe legally prevails in its quest to place a casino on a county island within an incorporated city, as it is attempting to do in Glendale,the state gaming compact is destroyed. It becomes null and void. As you can see, now one of the Phoenix council candidates has voiced concern with regard to this 15 acre parcel that will end up in federal ownership. Since it would once again become federal land Phoenix would have absolutely no control over what is developed and how it looks.

 It would be ironic if a Tribe created a secret shell company and bought the parcel, waited a few years, and then announced that they were building a casino on the site – shades of Glendale. This is a lesson for all Valley communities. Watch out if you have a county island within your city.  If the Tohono O’odham are successful in Glendale you could be next as casino development warfare erupts.



John Kindt
Biscayne Times

Professor of Business Administration since 1978, John Warren Kindt from the University of Illinois, is perhaps one of our country’s foremost experts on the effects of gambling and casinos in the United States. He has a distinguished and creditable background. He received an A.B. in Business from William and Mary; an M.B.A. from the University of Georgia; a J.D. from the University of Georgia; an LL.M., International Law from the University of Virginia; and an S.J.D., International Law from the University of Virginia. Kindt has written numerous papers on antitrust, tax, commercial, environmental, and international law. However, his main expertise is the economics of gambling — from Internet poker games to lavish casinos.

The Biscayne Times of Florida quoted him extensively in a February, 2012 article entitled The Casino Effect written By Erik Bojnansky on the issue of off-shore corporate interests building a mega resort/tourist destination with casinos in Miami, Florida. You can connect to the article here: http://www.biscaynetimes.com/index.php?option=com_content&view=article&id=1073:the-casi .

I have taken the liberty of quoting some of his remarks:

“Generally there is a bump lasting about two to three years,” says Kindt, who has studied casinos for two decades. ‘There are new construction jobs and a lot of activity as money is coming in’.”

“But Kindt warns that the bump won’t last: ‘Once the project is completed, and slot machines come in, [the casino] takes everything. After that Miami will lose jobs as businesses within a 35-mile radius of casinos… see their profits shrink…’. ”

slot machine“Kindt also says that casino games such as poker, blackjack, and roulette are merely ‘window dressing’ designed to draw in players. Slot machines, which include video poker and other electronic gambling machines, are at the heart of all casinos. ‘Every slot machine brings in a minimum of $100,000 a year,’ he asserts. ‘Slot machines don’t create jobs — you just dust them off. And that’s 90 percent of the money.’ According to Kindt, most of that slot-machine money comes from middle-class and poor individuals living near casinos.”

“Each slot machine costs the surrounding community one job per year, Kindt says. In a 2003 article for the Ohio Law Review, he reported that within a newly established casino’s ‘feeder market,’ business and personal bankruptcies increase between 18 and 42 percent, while ‘impulse’ business transactions in the area decline by 65 percent.”

“ ‘When billions of dollars are going into slot machines, where are those billions of dollars coming from’?” Kindt asks. ‘They are no longer buying cars, refrigerators, or even food and clothing’.”

Here are more quotes from scholarly publications and testimony before state and national fact-finding committees: The link is:  http://www.casinowatch.org/john_kindt/kindt_index.html

“Every video [slot] gambling machine takes $60,000 out of the consumer economy.”

“$60,000 spent in a consumer economy multiplies by respending into $180,000.”

jobs gone“For every slot machine you add, you lose one job per year from the consumer economy. Therefore 5,000 new video gambling machines costs the economy 5,000 lost jobs each year.”


gambling 2“Legalized gambling cost taxpayers $3 for every $1 in state revenue to government”

“Any legislator who says he doesn’t see the downside hasn’t done his homework”

“My bottom line is this is no time to be gambling with our economy”

“Gamblers spend 10 percent less on food; 25 percent less on clothing and 35 percent less on savings”
gambling 1
“Thirty-seven percent of gamblers dip into their savings to fulfill their habit”

“In 1993, 40 percent of Minnesota restaurateurs reported declines attributed to casinos”

bankruptcy“Bankruptcies and addictions increase in areas with casinos”

“An Osage tribal study found that between $41 million to $50 million left a 50-mile radius around their own casino”

“The gambling interests like to point to the construction jobs, but those jobs go away”

“Gambling interests hire lots of economists to do impact studies, but what you need is cost-benefit analysis, and you’ll never see the industry finance those”

“No reputable economist anywhere believes it’s [gambling] an economic tool”

“For every dollar of revenue generated by gambling, taxpayers must pay at least $3 in increased criminal justice costs, social welfare expenses, high regulatory costs, and increased infrastructure expenditures”

Courtesy Christopher B.

Courtesy Christopher B.

“Generally, traditional businesses were slow to recognize the way in which legalized gambling captured dollars from across the entire spectrum of the various consumer markets, but now they know”

“People will spend a tremendous amount of money in casinos, money they normally would spend on refrigerators or a new car. Local businesses will suffer because they’ll lose consumer dollars to casinos.”Quoting Donald Trump

“And as far as jobs go, for every one job that the casino creates, one is lost in the 35-mile feeder market”

“A study in Illinois in the mid-1990s found that 65 percent of businesses were hurt by the proximity of gambling”

From the travel math website , http://www.travelmath.com/cities-near/Glendale,+AZ,  one can find that the following cities and towns are within 26 miles of Glendale.

Cities, towns, and suburbs near Glendale, Arizona. The center of each city listed is within 26 miles of Glendale, AZ:



down the drainIf nothing else, this bit of information should give these cities pause when they learn that the economic impacts of a casino can affect anywhere from a 35 to 50 mile radius. I wonder if Mayor Barrett of Peoria would be so enthusiastically supportive of this proposed casino if he were to realize that the giant, economic sucking sound affecting Peoria was due to this casino?

As Professor Kindt suggests, it’s time for a cost-benefit analysis – not a fiscal impact study (having been fooled by previous fiscal impact studies I know they can be made to prove or disprove anything) – but an extensive and thorough cost-benefit study that proves or disproves once and for all, the impact of a casino in Glendale.  A local economist such as Elliot Pollack could perform such a study but who would pay for it? The Tohono O’odham? Not on your life. The State? Nope, again. Glendale? It’s tapped out. How about a consortium of the cities in the above list? After all, they would be affected… wouldn’t they?


Casino…good, bad or indifferent? Part 3

Posted by Joyce Clark on April 16, 2013
Posted in Casino  | Tagged With: , , , , | 1 Comment

We know the proposed site of the casino. We know about the state voter approved gaming compact and how the Tohono O’odham acquired the land.  Is a casino is healthy for an urbanized area?

There is one disclaimer however. I am not commenting on the casino as a social justice issue. For this discussion this issue is not about the white man having treated Indians badly over several hundred years. It’s not about owing Tribes for past wrongs. Today’s society has crafted many solutions for ameliorating social injustice. What this is about is whether a casino, whether owned by Las Vegas interests, Atlantic City interests or the Tribes, is a good thing within a major city. Glendale is a major city with a population of nearly a quarter of a million people. It is the fourth largest city in the state. It definitely qualifies as an urban area within the Phoenix metropolitan area.

threaten 2How is crime related to a casino? Does crime go up, go down or stay the same? The following is an Abstract entitled Casinos, Crime and Community Costs by Earl L. Grinols and David B. Mustard, originally published in 1996 but this excerpt is from the Review of Economics and Statistics (February 2006). The authors say, “We examine the relationship between casinos and crime using county-level data for the United States between 1977 and 1996. Casinos were nonexistent outside Nevada before 1978, and expanded to many other states during our sample period. Most factors that reduce crime occur before or shortly after a casino opens, whereas those that increase crime, including problem and pathological gambling, occur over time. The results suggest that the effect on crime is low shortly after a casino opens, and grows over time. Roughly 8% of crime in casino counties in 1996 was attributable to casinos, costing the average adult $75 per year.

“Casinos increased all crimes except murder, the crime with the least obvious connection to casinos. Most offenses showed that the impact of casinos on crime increased over time, a pattern very consistent with the theories of how casinos affect crime. The crime-ameliorating effects of casinos through increased employment opportunities and wages for low-skilled people will be concentrated shortly after opening. Between 5.5% and 30% of the different crimes in casino counties can be attributed to casinos.

“This translates into a social crime cost associated with casinos of $75 per adult in 1996. This figure does not include other social costs related to casinos, such as crime in neighboring counties, direct regulatory costs, costs related to employment and lost productivity, and social service and welfare costs. Overall, 8.6% of property crime and 12.6% of violent crime in counties with casinos was due to the presence of the casino.

crime 1“According to the study, five years after a casino opens, robbery in the community goes up 136 percent, aggravated assault is up 91 percent, auto theft is up 78 percent, burglary is up 50 percent, larceny is up 38 percent, rape is up 21 percent and murder is up 12 percent, compared to neighboring communities.

“Crime-lowering effects, like additional police and the new jobs represented by a casino are overwhelmed by rising crime increased by the presence of the casino, according to the study.”

Since this study was published in 1996 many pro casino interests have attempted to debunk it. Be that as it may, this is a definitive study that has been repeatedly cited by many reputable public policy groups in attempting to determine the benefits and negatives of a casino.

The New Hampshire Center for Public Policy Studies in its April, 2010 report entitled Impact of Expanded Gambling in New westgate 1Hampshire concluded in part, that negative impacts could be substantial:

  •      Decrease in meals and room taxes away from other, traditional sources (a shifting of tax revenue away from hotels and    restaurants such as Westgate, toward gambling facilities)
  •      Visitors and residents spend money on gambling that would be spent on other goods and services (known as “substitution”)
  • The state will have increased expenses related to expansion of personnel to accommodate the new facility
  • Creates an atmosphere of increased competition for state investments and subsidies
  • Shifts workers currently in one industry to the gambling industry (known as “displacement”). This new development may take workers from other industries and moves them into the casino industry
  • Social costs increase related to increased crime and pathological gambling
  • Significant potential political influence from a single industry

This New Hampshire study also offered, “For a standard casino, most patrons come from within 30 miles and participation declines exponentially as distance increases. These markets do not conform to state or other political boundaries.”

casino 1Another issue identified by the study said, “In casino markets like Las Vegas and Atlantic City 8-10% of casino patrons are ‘problem gamblers” (National Opinion Research Center, 2000). A person is not going to have a problem unless they have access to gambling. Proximity to a casino impacts propensity to gamble. Proximity to a casino (e.g. within 50 miles) increases the risk of pathological problems (National Opinion Research Center, 2000). Problem gambling will impact communities closest to the gambling venue and decrease the further away you are.”

In addition, “An analysis by the New Hampshire Lottery Commission shows that scratch ticket sales have declined in the last six months of 2012 in the region of New Hampshire closest to the Oxford County casino.”

This New Hampshire study raises issues not previously discussed publicly such as a diminishment of state lottery sales in the geographic region closest to a casino or that pathological gambling increases in the geographic area closest to the casino.

roads 2What about the issue of traffic? The Connecticut South Western Regional Planning Agency issued a Casino Traffic Impact Study in 2009.  “The purpose of this study was to estimate the possible traffic and air quality impacts of the development of a casino in Bridgeport.” The study concluded, “that the development of a casino would have a significant impact on traffic congestion in southwestern Connecticut. Casino traffic is not seasonal because the number of trips to and from casinos is relatively consistent from month to month. Casinos operate 24 hours per day; there is no peak travel period to and from casinos thus traffic impacts of casinos may be experienced at all times of day.” Many transportation agencies in many states where casinos have located have done similar studies. All recommend new transportation infrastructure whose costs are borne by taxpayers.

roads 1The increased traffic in the area will not just be due to the number of visitors to the casino. Add to that, traffic from employees as well as vendors and suppliers making deliveries with their semis at all hours of the day and night. In Glendale a traffic impact analysis study was done for Westgate and the University of Phoenix Stadium. As a result of those studies, additional traffic mitigation was created and paid for by the developers of those projects. There is no mechanism to compel the Tohono O’odham to enhance road infrastructure in the area. As a sovereign nation there is no local, state or federal mechanism to compel another nation (think of it as another country) to reimburse the costs of enhanced transportation infrastructure to and from their site.

constructionIn return for the problems created by a casino in an urban area, supporters of the casino continually use the mantra of (1) it will pump up business in the adjoining local area. They say that customers will leave the casino environment and move to Westgate to eat and to shop.  I doubt the restaurants and hotels, or Tanger Outlet Mall in Westgate would agree with that notion. More likely, customers with limited disposable income will make choices and it will be one or the other – Westgate or the casino – not both; and (2) it will bring jobs – temporary construction jobs and later, permanent jobs servicing the casino. Keep in mind, 25% of the jobs created, whether temporary construction jobs or permanent service jobs later, are reserved for Native Americans. At Talking Stick Casino, “Chanen Construction, which has worked with Casino Arizona for 14 years, divided the enormous job of sheet-rocking the interior and exterior into 10 different bid packages. This resulted in five firms getting the work, instead of one, which is the norm. But Chanen wanted ‘to maximize opportunities for different project participants,’ the company told McGraw-Hill Construction in a profile of Talking Stick published last fall. ‘We have a process where we let tribal members who own businesses participate as subcontractors, so we want to make the packages in smaller bites so more participation could occur’.”

The Tohono O’odham has said repeatedly there will be 6,000 construction jobs. The Maryland Live! Casino is a 332,500 square foot facility (twice the size of the proposed TO casino) and anticipates creating 2,750 construction-related jobs (half that number would be approximately 1,400 jobs and reportedly a much more realistic number for this facility). In an effort to “sell” the benefits of the casino, it is quite possible numbers have been inflated. It is a subtle form of deception, no doubt, but not unexpected considering the TO’s actions with regard to Proposition 202.

Problems throughout the country related to casino construction have surfaced. Here is but one example – a Press Release from a coalition of unions in California issued on January 15, 2013, “ROHNERT PARK, CA: Graton Rancheria’s (my note: a coalition of Indian tribes) promises to Sonoma County union workers have been dashed by lay-offs of local union members as out-of-area workers are being brought in to take their places. Sonoma County union construction workers report that workers are being brought in from “Nevada and the L.A. area” and even as far away as Alabama to work on the Graton Rancheria casino/hotel project in Rohnert Park.

Reports started as early as November, as a local member of the Carpenters Union raised the first alarm about locals being replaced by out-of-area workers.   Now the complaints are coming from a union cement worker who believes that approximately 70% of the casino workforce is made up of the out-of-towners.”

Those who think the casino is the answer to Glendale’s problems, will dismiss the arguments made in this blog and take this as an opportunity to respond in the negative. As long as comments are respectful of one another and deal with the issue at hand, they will be posted as responses to this blog.

In the next blog we will look at the legal issues and a basket full of attorneys involved in the casino issue.