Casino executives from the northeast attending an industry conference seem to agree that the gambling market in that part of the US has reached a saturation point.”It just can’t go on forever,” said the general manager of Philadelphia’s SugarHouse casino. “There’s a finite amount of gaming revenue out there. We are in a very volatile time and we’re in a frenzy of gaming expansion. It needs to stop.”Here are three reasons why this is important to Florida:
1. Expanded casino gambling in Florida would not be a draw for tourists.
According to an Aug. 10, 2014 New York Times article, “more than half the population in the Northeast now live within 25 miles of a casino featuring video lottery, table games or slot machines.” According to statistics from Visit Florida, tourists from Massachusetts, Connecticut, New York, New Jersey, Ohio and Pennsylvania comprised just over 30% of total domestic visitors to our state in 2013 (citation here). Expanded casino gambling in Florida would not draw in tourists who can so easily gamble at home. Recall that the Spectrum Gaming Report, funded by the Florida Legislature, found that over 90% of the revenue from expanded casino gambling would come from locals, not tourists (citation here).
2. Casinos hurt local businesses
The gambling industry loves to spin the fable that casinos are an economic boon for communities that are struggling financially. The truth is, money spent in a casino is simply money not spent in another sector of the economy. In addition, as this market saturation cuts into casino profits, casinos routinely under-deliver on promises of tax payments which hurts local and state government (see headlines from Delaware, Baltimore, Ohio).
After gambling has gained a foothold, local businesses surrounding a casino struggle to stay open. After casinos were legalized in Atlantic City, 40 percent of restaurants and one third of the retail establishments there went out of business (Robert Goodman, The Luck Business: The Devastating Consequences and Broken Promises of America’s Gambling Explosion p. 23). Billionaire casino owner Steve Wynn said it best in 2006, “There is no reason on Earth for any of you to expect for more than a second that just because there are people here, they’re going to run into your restaurants and stores just because we build this building here.” (citation here)
3. In order for casino companies to grow they must expand into new markets – and Florida is considered a top prize.
In order to maintain their profits, casino companies must continually find new gamblers to lose money in their casinos.
Florida’s large population and heavy flow of tourists have always made us a coveted target of casino companies. But expansion of gambling here would threaten our family-friendly brand that is the envy of virtually every other state in the U.S. Several years ago Las Vegas tried to become a family destination and failed miserably. And now, Atlantic City is trying to reinvent its image following an economic meltdown caused by multiple casino closings last year. It’s quite simple: a gambling brand and family-friendly brand are not compatible.
US Gambling Market Saturated, yet Casinos Keep on Coming
By Wayne Parry
May 28, 2015
ATLANTIC CITY, NJ – The casino market in the northeastern United States is saturated, yet that’s not stopping some states from approving gambling legislation and companies from building new gambling halls.
That’s the consensus of participants at a major casino conference in Atlantic City.
Eugene Johnson, of Spectrum Gaming Group, says by the end of this year, there will be 60 casinos in the northeast. That figure will rise to 65 by 2018, according to his colleague, Joe Weinert.
“There’s not a politician in the land who is going to choose a tax increase when gaming looks so good on paper,” said Wendy Hamilton, general manager of Philadelphia’s SugarHouse casino. “We have to avoid the siren song.”
Asked if casino closings outside New Jersey are likely, she said nothing appears imminent, but “of course it’s going to happen” if expansion continues at its current pace.
“Pennsylvania doesn’t care what happens to New Jersey, and New York doesn’t care what happens to Pennsylvania,” she said. “It just can’t go on forever. There’s a finite amount of gaming revenue out there. We are in a very volatile time and we’re in a frenzy of gaming expansion. It needs to stop.”
Ed Sutor, president of Dover Downs casino in Delaware, said the entire mid-Atlantic region saw decreasing revenue in the first quarter of this year.
“New Jersey, Delaware, Pennsylvania, West Virginia and Maryland — the entire market is down,” he said. “That is, friends, saturation. You’re just moving money around. You bring in a new operator and the money just moves around and the entire market doesn’t go up.”
Sutor noted his state is considering adding three more casinos, which he said “makes no sense.”
Atlantic City has lost half its casino revenue and thousands of jobs to competition from Pennsylvania, which is now under pressure from casinos in Ohio and Maryland, said William Ryan Jr. chairman of the Pennsylvania Gaming Control Board.
“We in Pennsylvania know the competition we now confront will always be there, and the days of double digit growth in that area are probably gone,” he said.
More casinos are planned soon for Philadelphia, Massachusetts, Rhode Island, Maryland and New York. Hamilton noted that a planned second Philadelphia casino is being appealed to the state Supreme Court.
“There’s a lot of competition right now,” she said. “If you look at the entire mid-Atlantic region, you’ve got people really hammering each other to win people over. There’s not $400 million in new money in that market. There’s just not. We’re keeping a wary eye on what’s coming down the road; it’s a scary situation.”
New Jersey is considering allowing a casino in the Meadowlands, and possibly a second one in Jersey City, both just outside New York City.
“We’re at a point where we’re just moving money around,” said Chris Brown, a New Jersey state senator from near Atlantic City, who opposes a plan to extend casino gambling to other parts of the state. “All you’re doing is cannibalizing the market you already have.”
Lou Kirven, an executive with New York’s Empire City casino, said adding two northern New Jersey casinos to a market also planning for three new southern New York casinos would be “one too many. We have saturation.”
Bill Hayles, vice president and general manager of Pennsylvania’s Hollywood casino at Penn National Race Course, said Maryland’s casinos have cut into his business.
“We’re feeling it from the Baltimore region, seeing some erosion in our business,” he said. “The sad part is before they open, you spend all your time trying to figure out how to right-size your own property.”
Read the full article online here