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Think Tank: Issue 6 A $1B Giveaway To Wealthy
Tuesday, Oct 14, 2008
By Donna Willis
The right to open a casino in Southwest Ohio would be worth $1 billion if this right were offered at a public, competitive open auction. Those were the findings of a report issued Tuesday by the Buckeye Institute, a Columbus-Based think tank.
Buckeye Institute said Ohio taxpayers could forfeit nearly $1 billion in revenue with the passage of Issue 6. Report author and Buckeye Institute adjunct scholar Jeffrey Hooke called Ohio Issue 6 “a $1 billion giveaway to wealthy individuals.”
FULL REPORT Read the Buckeye Institute’s complete report. (PDF)
Related Story:
Donnie Clark
Issue date: 10/17/08
Issue 6 on the November ballot, sponsored by MyOhioNow, seeks to bring a $600 million resort casino to southwest Ohio near Wilmington. The casino is intended to keep money in Ohio rather than in surrounding states where gambling is legal, and aims to open 5,000 new jobs.
According to Issue 6, which was proposed by Lakes Entertainment, a Minnesota-based company, the casino would be required to pay a 30 percent tax on revenue to the state of Ohio, which would be distributed to all 88 counties based on population.
The main concern comes from the presence of a loophole in the bill. The proposed amendment says the casino’s tax rate would be lowered to the percentage being paid by another casino in the state, if it is authorized by the federal or state government. Walgate said the bill could lead to the construction of an Indian casino in Ohio, which would not be taxed by the government. As a result, both casino’s could claim zero taxation from the government.
“They wrote the wrong language,” Walgate said. “The only casino that can be built by federal law is an Indian casino, so why would they include that. They knew what they were doing.”
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I’m not clear why they think this would be such an economic boom (except for the owners). All recent studies are showing even casinos suffering economically (especially Atlantic city) right now.
All recent studies are showing even casinos suffering economically (especially Atlantic city) right now.
Not that I doubt that, but do you have cites handy?
And even if true, businesses generally don’t build things based on current economic situations, they build based on the future.
Not that I doubt that, but do you have cites handy?
And even if true, businesses generally don’t build things based on current economic situations, they build based on the future.
There are a TON of articles about this. I think in December of ’07, all casinos around the country were starting to struggle but Las Vegas was doing fine. Now, Las Vegas has been losing a lot of revenue and they’ve even put a lot of construction on hold.
The chilling effect of the global meltdown is felt in other cities too where gambling is prevalent. According to Rick’s Cabaret International, which owns 20 clubs in seven U.S. cities and two overseas, the establishment had lost 74 percent of its market value in 2008. The operators of the Foxwoods Resort Casino and the Mohegan Sun Casino in Connecticut reported a 16 and a 13 percent drop in their income in September compared to the same period last year. They attributed the revenue decline to Americans becoming more cautious with how they spend their disposable income.
However, I also believe that they are operating on potential future revenue, not the current economic state.
Not that I doubt that, but do you have cites handy?
And even if true, businesses generally don’t build things based on current economic situations, they build based on the future.
There are a TON of articles about this. I think in December of ’07, all casinos around the country were starting to struggle but Las Vegas was doing fine. Now, Las Vegas has been losing a lot of revenue and they’ve even put a lot of construction on hold.
The chilling effect of the global meltdown is felt in other cities too where gambling is prevalent. According to Rick’s Cabaret International, which owns 20 clubs in seven U.S. cities and two overseas, the establishment had lost 74 percent of its market value in 2008. The operators of the Foxwoods Resort Casino and the Mohegan Sun Casino in Connecticut reported a 16 and a 13 percent drop in their income in September compared to the same period last year. They attributed the revenue decline to Americans becoming more cautious with how they spend their disposable income.
However, I also believe that they are operating on potential future revenue, not the current economic state.
That’s true to an extent, but casino’s are also especially subject to the laws on dimishing returns. The proliferation of casinos actually undermines the very tax-benefit premise they’re supposed achieve, which is to create a stable revenue stream. This is why there’s so much litigation and legislation involved in the gaming industry, because the protection of their business model is very much predicated on controlled the legal environment under which they operate.
If people are going to give away $6b, it’d be much more effective to put that into an industry which wasn’t so easily replicateable with cookie cutter resorts whereever one wants to put one.
That’s true to an extent, but casino’s are also especially subject to the laws on dimishing returns. The proliferation of casinos actually undermines the very tax-benefit premise they’re supposed achieve, which is to create a stable revenue stream. This is why there’s so much litigation and legislation involved in the gaming industry, because the protection of their business model is very much predicated on controlled the legal environment under which they operate.
If people are going to give away $6b, it’d be much more effective to put that into an industry which wasn’t so easily replicateable with cookie cutter resorts whereever one wants to put one.
Thank you! This was my point exactly – they are no different than strip malls in this regard. And trust me, once the initial benefit runs its course, the usual reaction is to build more casinos who can cash in on the trendiness and newness of that particular location.
Friday, October 24, 2008
By James Nash and Jim Siegel
If the barrage of television ads and mailers for and against a gambling measure on the Nov. 4 ballot don’t tell the story, new campaign-finance numbers do: The battle over a proposed casino is the most expensive campaign in Ohio history.
Nearly all of the money going into Issue 6 is coming from two casino developers: Minnesota-based Lakes Entertainment Inc., which would build and operate the $600 million casino resort in southwestern Ohio, and Pennsylvania-based Penn National Gaming Inc., whose Argosy Casino in Indiana near Cincinnati would lose business to the new casino.
READ MORE
Saturday, October 25, 2008
By James Nash
Ohio’s economy is heading into a depression, supporters of a ballot measure to allow a casino in southwestern Ohio said yesterday as they promoted their measure as a way to counter the hemorrhaging of jobs.
Opponents hit back on the economic argument, saying the casino would simply soak up money that otherwise would be spent at restaurants and stores.
Proponents and opponents of Issue 6 held a testy debate on the merits of the proposal to allow a $600 million casino resort in Clinton County, between Columbus and Cincinnati.
Both sides drilled into economic arguments.
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I think the “no on 6″ ads are one of the most effective campaigns I have ever seen.
I am also dangerously close to voting yes on 5 because of the no on 5 ads. “The Job Killing Issue” is seriously laughable.
A friend and I were going to drive to Niagara Falls last night to play poker (bored, what can I say). Instead we opted for the Argosy Casino (my first visit) somewhere in Indiana close to the Ohio border with Cincy. Other than the two Connecticut casinos, Foxwoods and Mohegan Sun (I don’t count AC in this mix, but maybe should) it was my first experience at a casino that is a “jobs and economic development tool”. Based on my observations last night at the Argosy, I would definitely vote NO on issue 6.
At about 3 this morning, I sat and watched thousands of people pour out of that casino. I can’t help, but to judge. A huge majority of the crowd pouring out were the working poor and elderly who had no business being there whatsoever. By a rough estimate I bet that place is taking in 2 million a day out of working people’s hands.
Listening to the stories people were telling was a huge bummer. People were arguing over who owes each other what after impromptu loans were giving because “the slots were now warm” and “ready to hit”. I overheard a guy on his cellphone telling his wife he was “staying there” that night, and “this time it’s different” because he’s up. The entire place reeked of desperation and social problems.
And, hell – that gets back to me. I guess I’m a spoke in that wheel for taking people’s money at the poker table, but the poker room there is a tiny, tiny slice of that casino. I naively throw poker into a different category of gambling. All I know is that the slots and tables will crush the uneducated, desperate and poor creating a ton of social problems that we’re ill-equipped to foresee or handle here.
So you have the capacity to determine what risks are appropriate for both you and them, but they don’t have the capacity to figure that out for themselves?
Gambling is a vice. Its a sad state of affairs when we have to justify gambling to pay for schools.
Gambling is also an activity. For far more people than it is a vice or addiction, like John for instance…
I will admit, I was in Detroit a while back and, not having anything to do one night, we checked out one of their casinos. They did reek of desperation and after 10 bucks we left because we felt bad for being there.
I don’t think that I can assume that someone’s financial position or choice of employment makes me better equipped to decide what they choose to do with their money.
If someone makes statements like the ‘slots are warm’ or doesn’t have an understanding of probability, yes. Unequivocably.
Poker is a game of both a raw understanding of probability and people-reading skills. In Blackjack, an understanding of probability can close the long-term odds to close to 1.
A.
If someone makes statements like the ‘slots are warm’ or doesn’t have an understanding of probability, yes. Unequivocably.
A.
I don’t think that means they, necessarily, don’t have an understanding. I prefer Blackjack or Roulette, but I play slots when I am in Vegas too. Well, did at least, I’ve gotten sort of bored with gambling now that I have a house to pay for…. (I am sure at least one of you will turn that into something) I understand probability but it’s easy to get superstitious when your having a good time. I don’t think overhearing a few phrases uttered gives you the right to judge the intelligence level of all of the people in a 100,000 sq ft. facility. Even if they don’t understand why the slots are always cold when they are there, as long as they aren’t addicted and spending more than they can, I don’t have a problem with it.
I know it’s a cliche argument, but I don’t see the difference between any potentially habit forming vice. A lot of people are making money off of people addicted to alcohol, tobacco, cold medicine, adult movies, cable, the internet…
I was actually thinking the other day about how different my opinion is of smokers, compared to the one I had growing up. I agree it’s a gross, unhealthy habit, but I am talking about the emotional response triggered from 15ish years of propaganda. Removing cigarettes from record covers and book jackets is, in my opinion, going way too far. Makes me wonder if we’ll reach a time when we’re removing tumblers and wine glasses as well.
I must be one of those rare people who feel adults can decide for themselves what to do with their money & their time.
Or perhaps I should anticipate a day when someone approaches me, says I drink too much beer, and decides to bring Prohibition back to Ohio.
Come to think of it, maybe we should outlaw investing in the stock market, too.
Too many uneducated people losing too much money they can’t afford to lose.
I think the “no on 6″ ads are one of the most effective campaigns I have ever seen.
Yeah, they’re not too bad. Sure they’re disingenuous – but they ARE political ads, of course.
And I’d expect nothing less than effective ads from the casinos in neighboring states who are funneling tens of millions of dollars into such ads. Those guys ain’t stupid.
i think they should have revived the casino proposal from last time that was tied into college scholarships. i know it was defeated then, but i definately think it would have a better shot this time. that and it was miles ahead of the current proposal as it didnt have the big tax loophole or give a monopoly to one out of state company.
+ 100000
I would have still voted against it, but if you do want casino gambling in Ohio, you should really wait for a better plan. This constitutional amendment is a horrible plan to enrich one individual.