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Wednesday, October 5,2011

Positive or not?

A casino would bring jobs and revenue to Lansing, but how much and at what price to other operations in Michigan?

by Nyssa Rabinowitz

Lansing Mayor Virg Bernero said a casino in Lansing would have a “tremendous positive impact," but some experts disagree.


On Friday, following reports that his
administration is negotiating for a casino, Bernero issued a written
statement saying his “administration strongly supports the concept of a
casino in Lansing because it would have a tremendous positive impact on
our local economy.” 


But Matthew Fletcher, MSU professor of
law and director of the indigenous law and policy center said building
a casino in Lansing would siphon wealth from other communities rather
than create new wealth.


“Michigan Indian gaming is what I would
call zero-sum, it’s grown as much as it can,” Fletcher said. “If a
casino generates let’s say $100 million, almost all of that is going to
come from other communities.”


Fletcher said the Indian gaming industry
leveled off about 10 years ago at the $10 billion mark. Even the three
non-Indian casinos in Detroit started siphoning money from the Indian
casinos.


“There certainly will be positive
economic impacts (for Lansing), there will be some growth,” Fletcher
said. “The significance of it isn’t going to be a whole lot.”


Bernero did not give any numbers. Bob Trezise, president/CEO of the Lansing Economic Development Corp., did not return calls.


Ted O’Dell of the Lansing Jobs Coalition
disagrees with Fletcher. He sees a Lansing casino as a massive job
creator that would bring 1,500 new permanent jobs as well as 300
construction jobs.


These jobs could range in salary from
$9,169 plus tips for dealers to $169,047 for the casino’s general
manager, he said, citing his own research. 


The Lansing Jobs Coalition, headed by
O’Dell, has been researching the possibility of bringing a casino here
for months in order to create more jobs. Earlier this year, O’Dell
circulated a petition for a ballot issue to ask if Lansing residents
wanted a casino. O’Dell said he also introduced tribal leaders to city
officials in February, hoping to move the project forward.


“For us it’s not about the gaming,” O’Dell said. “It’s about job creation.”


But a study prepared for the National
Gambling Impact Study Commission by Adam Rose and Associates in
Pennsylvania in 1998 found that most casino jobs are “low-skill,
low-paying service opportunities” that rely on tips.


James Nye, a spokesman for the
Saginaw-Chippewa Indian Tribe, owner of Soaring Eagle Casino &
Resort in Mt. Pleasant, and the Nottawaseppi Huron Band of Potawatomi,
owner Firekeepers Casino in Battle Creek, said the tribes’ casinos
provide a wide-range of jobs at the casino as well as the tribal
government itself. Some jobs may be minimum wage, but others would
offer higher salaries, he said.


Another potential downside to casinos is
that they can drain a municipality’s resources in terms of fire, police
and emergency personnel protection when the casino first opens, the
Pennsylvania study said. However, the study concluded that the casino’s
revenue would more than pay for sustained public service commitments
over time.


According to Michigan law, 2 percent of
slot machine revenue goes to the local government, O’Dell said. The
city would also receive revenue from the city income tax that casino
employees would pay.


A 2006 study of state revenue from gaming in New England
found that New England states receive between 2 percent and 7 percent
of their state revenues from gaming. However, contrary to O’Dell’s
beliefs, the study found that permanent casinos divert tourists away
from local businesses, making the main form of revenue the casino
itself. The study was conducted by the New England Public Policy Center
at the Federal Reserve Bank of Boston.


Despite the negatives, the Pennsylvania study found that casinos help diversify a region, which can help attract more tourists.


“It adds another dimension of things to
do and entertainment,” said Lee Hladki, president and CEO of the
Greater Lansing Convention and Visitors Bureau. “The more choice you
have as a visitor, the more attractive that destination is.”


Michael O’Callaghan, executive vice
president and chief operating officer for the Detroit Metro Convention
and Visitors Bureau, said the three casinos in Detroit “have been a
positive aspect for the city.”


“They have certainly attracted
out-of-state visitors to the region,” he said. But O’Callaghan also
believes that visitors don’t come for casinos alone. He cited the Henry
Ford Museum, the Detroit Institute of Arts and the success of the
Detroit Tigers as examples of other attractions that have brought
visitors to the city.


O’Callaghan agreed with Fletcher that over-saturating the market with casinos would make each individual casino less profitable.


“There are only so many people in a region who have an interest in gaming,” he said.


Another concern is that the Sault Ste. Marie Chippewa
tribe — the tribe that is reportedly interested in Lansing — went
through banktruptcy at its first metropolitan casino, the Greektown
Casino in Detroit. The tribe lost ownership of the casino in 2010 after
it entered bankruptcy in May 2008 with over $755 million in debt, but
the tribe still owns the land. Fletcher said problems with the tribe’s
other investors, which were supposed to contribute 50 percent of the
costs, forced the tribe to come up with all the funds itself.


“They started way in debt before they
even got going,” Fletcher said, but there’s no way to tell if the same
situation could happen in Lansing.


While Fletcher would not comment on
whether a casino should come to Lansing, he said that the positive
impacts generally outweigh the negative impacts of casinos.


“Michigan needs more economic growth, it needs job growth, and this could be a job creator,” Fletcher said.



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