Monday, June 30, 2014

Casino Affect To Your Community

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PBS (Public Broadcast System) WGBH in Boston had reported on the financial aspects of casino gambling.   The segment was based on the “The National Impact of Casino Gambling Proliferation: Hearing Before the House Committee on Small Business, 103rd. Congress, 2nd. Session 77 (1994).  There is also a lot that can be added to another report by Professor John Warren Kindt, of the University of Illinois at Urbana-Champaign who wrote "The Business-Economic Impacts of Licensed Casino Gambling in West Virginia: Short-Term Gain but Long-Term Pain”.  

Following the American Civil War up through 1910, there was legalized gambling in the United States.   By 1910 there was essentially no legal gambling in the United States.   The restriction of legal gambling was put in most state constitutions.    It has been determined by 1910 that legalized gambling eventually causes the following:

1. Increased taxes
2. Loss of jobs in region
3. Economic disruption of businesses
4. Increased Crime
5. Social Welfare costs.

This is what is feared in Massachusetts and currently exists locally in Connecticut around Foxwoods and Mohegan Sun.

In our recent economic history, the activities of legal gambling has been subsidized by in one form or another by the tax payer.  The costs are found in.

(1) infrastructure costs,
(2) relatively high regulatory costs,
(3) expenses to the criminal justice system,
(4) large social-welfare costs

Casino Related Crime Rates

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On February 26, 2012, The Associated Press reported on crime rates around Connecticut casinos since openings.  In 1992, Foxwoods opened and in 1996 Mohegan Sun opened.   In 2011 Mohegan Sun generated $719 million in slot machine revenue and Foxwoods generated $650 million in slot machine revenue.   Prior to the opening, Governor Lowell Weicker warned in 1991 that the opening of Foxwoods in 1992 would lead to crime, prostitution, drunk driving, and other related crime.   After Foxwoods, the first casino opened, thefts rose substantially with larcenies accounting for most of the crimes.   Today, Larceny is the largest theft crime among both casinos.    Embezzlement's have more than tripled due most likely to gambling debts.   Connecticut averages about 158 embezzlement annually.   Before the casinos, the number of reported embezzlement's cases averaged around 49.

In 2006, the professors, Earl Grinols at Baylor University in Texas and David Mustard at the University of Georgia completed a study on crime resulting from casinos.  They were not paid additional for this study.  This was part of a faculty study at the University of Georgia.  They found that except for murder, there was a rise in all crimes with 8% property crimes and 12% violent crimes when a casino was put in place.   They wrote in 2006, "Specifically, problem and pathological gamblers commit crimes as they deplete their resources, nonresidents who visit casinos may both commit and be victims of crime, and casino-induced changes in the population start small but grow,"

Layoffs for Mohegan Sun and Foxwoods

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In the first quarter of 2013, Foxwoods reported through WFSB (Eyewitness News 3) that they would be laying off workers due to what they say is due to as the CEO Scott Butera said "increased competition and a presently declining market."   He went on to say ""We are focused on efficiency of operations at all levels in order to achieve success in today's challenging environment and to sustain that success well into the future with a goal of supporting strong employment levels for years to come,".

About a year later, Foxwoods reported through the Associated Press on May 15, 2014 that they would be cutting hours and have possible layoffs.    A memo to employees obtained by the associated press indicated that there would be "staffing changes across all levels of employment."   This change was also reported on the same day by WTNH News 8 in Connecticut.  Earlier reports show that layoffs happened before at Foxwoods for example the Associated Press reported that layoffs would affect approximately 2% of the 10,000 employees.  The workers were laid off on June 26 of that year.    The job cuts occurred a month after Foxwoods opened its new MGM Grand Casino.   In this same report by the Associated Press, Mohegan Sun had reduced its workforce by a few hundred through attrition.     At the time of this report, Analyst Dennis Forst of Key Banc Capital Markets said that Las Vegas customers had begun to cut back due to economic concerns.    He also reported that all US gaming markets spending was down and expected the trend to continue.

In the fourth quarter of 2012, Mohegan Sun announced layoffs on NBC Connecticut and Cape Cod Times.   The layoffs were reported to be 328 by the end of October 2012 (George Brennan of Cape Cod Times).  Two years earlier, the casino laid off 350 workers.   In 2012, the Massachusetts Gaming Commission Chairman Stephen Crosby had declined an interview about the Mohegan Sun Layoffs.