What do We Know about Gambling, Gaming, Casinos & Economic Development in Prince George's County, Maryland?

               It is probably the inadequacy of my search skills that prevents me from finding a detailed report on gaming and gambling in Prince George's County. I am pretty sure that I am one of the very few voters who has not seen such a report and therefore ill-informed on the social and economic impacts and benefits of slots and casinos in Prince George's County and in the Sate of Maryland. I would be interested in reading the 300 years of Maryland laws on gaming and gambling as well as a review of court cased that involved enforcement. I am also looking for metrics and expected development goals and gains besides the now faint to nonexistent support of the horse racing industry.[1]

               The importance of the social effects cannot be understated, though the literature  is growing it remains thin; there is much work to be done to support anecdotal and personal observations as to the negative impacts of gambling on a community. A report from the GAO notes that the "...social effects of gambling on communities are more difficult to measure than the economic effects, primarily because of limited quality data on social effects, the complexity of identifying and measuring social effects, and the difficulty of establishing a cause-effect relationship between gambling and social problems due to the difficulty of isolating any one factor that causes social problems. NGISC made no conclusion on whether or not gambling has increased family problems, crime, or suicide for the general population."[2]

               Because casinos are subject to higher levels of taxation than other enterprises in most locations. the benefit to government revenue streams is well documented. This success means that government itself is a major stakeholder with a big interest in the establishment and will encouraged growth of gaming and gambling as an industry of choice. There is little doubt that gambling benefits government directly. And there seems to be some indication of positive economic development gain. Taxes from casino gambling typically more than pay for government expenditures on roads, police services, and fire protection needed to support the casinos. However the same report points out that social costs were not considered and even recognized and that these costs might be significant.[3]

Laurie Volk, an economic development consultant based in New Jersey, said casinos do little to attract the highly educated younger workers who are considered crucial to urban redevelopment. Those workers prefer more cultural amenities and meeting places such as coffee shops and casual restaurants.[4]                My inability to easily find a detailed Prince George's County Maryland report on the impact and economic development plan that explains the strategy for establishing gaming and gambling in the county raises some concern that we are embarking on another quick fix to some problem scheme. Research indicates that casinos which "...cater to a local market generally do not bring outside money into the economy through the spending of their patrons. In fact, such casinos may have no net ancillary economic impacts. Residents patronizing such casinos may simply substitute gambling for other goods and services. The secondary impacts of spending on the foregone goods and services would therefore be lost, offsetting any ancillary benefits from gaming  expenditures at the casino. However, if a casino attracts gamblers who otherwise would be gambling out-of state, it can have net positive ancillary economic effects."[5]

               It is clear that a new casino catering to a local market can generate positive secondary economic effects that positively impact the high unemployment rate. If there were an equal amount of attention to science,  engineering and venture capital projects, the overall effect of casinos would be a plus at least in the short run. If however our economic development strategy is to create endless entry level service jobs, we probably are not positioning our county to compete in the world markets of tomorrow.  It is very clear that gambling and full casino services would help enhance National Harbor as a major national convention site destination. It is important for the dynamics of National Harbor to provide a wide range of services to attract convention customers. 

               Moreover,  we need to keep in mind that casinos and gambling will have unintended, but predictable, consequences on established small business in the county. The National Gambling Impact Study Commission Report summarized evidence from across the country on the ancillary impacts of casinos on other forms of entertainment. Small business owners from Atlantic City, NJ testified that in 1978, the year that casinos opened, there were 311 taverns and restaurants in the city. Nineteen years later, only 66 remained. The same report discusses the dangers of inter-jurisdictional competition point out that “[i]f every metropolitan area had a Las Vegas style hotel (and perhaps a small casino) … no one would travel far to gamble, and the substitution effect would reach 100%.”[6]  And there are unintended consequences for the gambling industries' major constituency, government, which, in its haste to solve one revenue problem, may exacerbate its financial problems by enabling casinos at the expense of individual discretionary spending on state lotteries.

               If I could find funding, I would provide a complete white paper including literature review, history of the industry and detail of the county and state plan for the economic development potential of gambling and its impact and relation to other economic development strategies. If such a detailed report is already out there I would appreciate any help that would lead me to it so I can sort out the gambling issues before us here in Prince George's County and in Maryland.     

• Prince George's works hard to bring back gambling facilities while the rest of country goes on-line 
•  Anonymous support for gambling in Prince George's County Maryland

  

---

[1] Once upon a time we were told that the reason to bring slots was in major part to help support the horse racing industry. I note a very loud silence on this original concept. We seem to be engaged in political mission creep.

[2]  Bernard L. Ungar. United States General Accounting Office. Impact of Gambling. April 2000. [accessed January 21, 2012] http://www.gao.gov/new.items/gg00078.pdf

[3] Bernard L. Ungar. United States General Accounting Office. Impact of Gambling. April 2000. [accessed January 20, 2012] http://www.gao.gov/new.items/gg00078.pdf

[4] John Gallagher. Detroit casino gaming has not led to any noticeable redevelopment downtown. Detroit Free Press. September 30, 2007. [accessed January 21, 2012] http://www.theverifiabletruth.com/2007/09/detroit-casino-gaming-has-not-led-to.html

[5] Heather Brome. This memo summarizes data on state revenues from gaming in New England and provides a review of the literature on the potential secondary impacts of casinos on local economies. Preliminary findings Federal Reserve Bank of Boston. September 14, 2006. [accessed January 21, 2012] http://www.bos.frb.org/economic/neppc/memos/2006/brome091406.pdf

[6] Heather Brome. This memo summarizes data on state revenues from gaming in New England and provides a review of the literature on the potential secondary impacts of casinos on local economies. Preliminary findings Federal Reserve Bank of Boston. September 14, 2006. [accessed January 21, 2012] http://www.bos.frb.org/economic/neppc/memos/2006/brome091406.pdf

:"Nevertheless, a new casino catering to a local market can generate positive secondary economic effects through its employees if it induces an increase in total employment in and around its host community. Such affects are greatest for new casinos in areas of high unemployment (for example, rural Mississippi). Under such conditions, the increased purchasing power of workers who otherwise would be unemployed or “underemployed” generates multiplier effects. However, at the other extreme, a new casino in a tight labor market may cause competition for service sector labor."