• Casinos Fail Old Industrial Towns

    July 14, 2015

    Tags: , ,
    Posted in: Economy, Minimum Wage

    sands casino


    It wasn’t just a business, it was a way of life– what residents of Bethlehem, Pennsylvania referred to simply as “The Steel”– a mill once America’s second largest steel producer with 31,500 souls working in a single facility.


    The Mill

    The mill made the steel for the Empire State building and the Golden Gate Bridge, and for WWII warships. After cheap imports flooded the United States in the 1980s, the Bethlehem Steel facility closed, leaving behind a mile-long scar of rusted out buildings people call the brownfields, along the Lehigh River. Allentown, Billy Joel’s bitter saga of industrial decline, name-checked the town.


    The Promise of Legalized Gambling

    So as soon as Pennsylvania legalized casinos in 2004, Bethlehem scrambled for one of the first, and won. Symbolically, Las Vegas’ Sands corporation would build right on top of the old mill. Everyone hoped the casino would replace a decent portion of the jobs lost when The Steel left. But by 2014, there were only 2,200 positions at the casino, plus 700 at leased businesses inside. Was a casino really the answer?

    Even those new jobs didn’t come for free. Roads, some $10 million worth, had to be built or repaired to make it easier for out-of-towners (New York is only 75 miles away) to reach the casino. The city added to its police force. Since the casino was located outside the downtown business district, the city paid for a shuttle bus to try and draw players to their shops. But the casino had its own retail mall competing with anything local. No one should “plan on a casino to bring about urban renewal,” said a Wynn Casinos property manager in nearby Philadelphia, “because that’s not what casinos do.”


    The House Always Wins

    Still, there was money to be made in Bethlehem. Casino profits, of course, were repatriated to the owners in Las Vegas. Pennsylvania requires casinos to pay a 55 percent tax on revenues, but only four percent of that goes to the host community. For Bethlehem in 2013, that totaled $9.5 million, not game-changing money for an area so economically devastated for so long. Baltimore, an early adopter of casino gambling as an economic resurrection strategy, has seen similar results. In Atlantic City, the first major destination outside Las Vegas to feature legalized gambling, four major casinos closed in the past year.

    Bringing in a casino is about jobs and money. Jobs created statewide in Pennsylvania via gaming do not even equal the number lost in Bethlehem alone. As of 2013, Pennsylvania casinos directly employed only 17,768 people, leaving significant questions about the role of gaming in lifting America’s devastated rust belt towns out of unemployment-driven malaise.

    As for money, a report notes that after some initial successes, revenues in Pennsylvania from gaming declined by 2013. Statewide, casinos did contribute about $81 million in taxes last year. However, it is unclear how much of the revenue behind those taxes came from local residents, what might be called churning rather than creation, a back-door tax on those ill-prepared to lose money at the slots (affluent people visit casinos less often than poorer people do.) One group of frequent visitors who have found a way to beat the house come from New York’s Korean community; they sell the promotional meal vouchers from the casino on the black market.

    Competition is a serious problem, as new casinos open in surrounding states. For example, New Jersey is considering a casino at the Meadowlands, only 30 minutes outside New York City, which will pull many away from Bethlehem’s new bright lights. Pennsylvania is also among the states with the highest casino tax rate in the nation, raising further the question of market cannibalization should gaming corporations seek out lower rates in adjoining states. Casino revenues nationwide have not recovered their 2007 peaks, and Moody’s projects a drop through 2015, cutting industry earnings by as much as 7.5 percent.


    Don’t Gamble if You Can’t Afford to Lose

    Only a generation ago, Bethlehem, Pennsylvania had a steel mill employing tens of thousands of people at good wages. Including benefits, an average union steelworker made $26.12 per hour then, the equivalent of $40.66 today. It was enough to create one of the most powerful economies on earth, supported by a robust middle class driving demand for housing, cars, everything. They could afford to gamble a bit on yearly vacations, too.

    The typical casino worker today in Bethlehem makes $10-12 an hour. Many are part-time. They labor in the shadow of the mill that helped build the Empire State building and the Golden Gate Bridge, a new way of life that may flounder on a bad roll of the dice.



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  • Recent Comments

    • John Poole said...

      1

      Let’s see- if the casino tanks there is always cock fighting, a dog track, legalized prostitution? Wait, somehow The Best Little Whorehouse in Bethlehem” sort of sounds funny. But make it look like a inn with a manger and have the muscle stand around in elaborate silk outfits and seated on camels.- Get a super powerful laser klieg type light to shine a tiny spot in the sky that can draw the tourists from as far as Iowa! Sounds like a good kickstarter idea. Go for it Pitch! You could be the mean tempered Inn Keeper who tells everyone there’s no more room in the parking lot for their RVs.

      07/14/15 7:49 AM | Comment Link

    • John Poole said...

      2

      Let’s see- if the casino tanks there is always cock fighting, a dog track, legalized prostitution? Wait, somehow The Best Little Whorehouse in Bethlehem” sort of sounds funny. But make it look like a inn with a manger and have the muscle stand around in elaborate silk outfits and seated on camels.- Get a super powerful laser klieg type light to shine a tiny spot in the sky that can draw the tourists from as far as Iowa! Sounds like a good kickstarter idea. Go for it Pitch! You could be the mean tempered Inn Keeper who tells everyone there’s no more room in the parking lot for their RVs but they can in the muddy field next to the Inn.

      07/14/15 7:50 AM | Comment Link

    • John Poole said...

      3

      what the? How did that happen? Sorry Pitch, I meant you to apply to be the cranky Inn Keeping not a mean spirited one.

      07/14/15 8:47 AM | Comment Link

    • Bruce said...

      4

      That’s trickle-down.
      Subsistence.
      And, STFU already!

      07/14/15 11:00 AM | Comment Link

    • bloodypitchfork said...

      5

      John Poole said…

      quote” Sorry Pitch, I meant you to apply to be the cranky Inn Keeping not a mean spirited one.”unquote

      No problem. Cranky comes with the 70yr old territory. Mean spirited however, comes out when I deal with Michigan red necks, pushy salesmen, halfwitted government bureaucrats and our present day totalitarian government tyranny. I’d just as soon spit in their face.

      As for the post at hand, I’ll say this. I lived on the southern coast of Oregon for 10 yrs, which is one of the poorest areas on the west coast. To help with the local economy, the State allowed various local Indian tribes to incorporate and build casinos. Unfortunately, they were built and run by out of State “entertainment” corporations, who paid a yearly lump sum to each tribe the Casino was licensed to. While these Casinos did help attract a tourist trade, and provided limited low paying employment for locals, it also turned many locals into destitute gambling addicts, including the very tribes the casino’s were built to help. So many in fact, the Casino was forced to help open and fund a “gambling anonymous help center”, as it became almost epidemic.
      Meanwhile, as usual, it was the out of State corporation and the State that benefited most. What really astounds me though, is you would think that for a very small town like Coos Bay, one Casino would suffice. Ut unh. Once the economy started improving..they built another one, right next to the first one. Now the locals have a choice where they fulfill their gambling addictions. Sheeezus.

      As for me? I hate gambling. I haven’t got a dime to give to these fucking thieves. And thieves they are. Legal thieves. Corporate thieves. Well..to each their own, but they don’t get one cent from me. EVAH. If I’m going to waste money…I’ll drink it away. At least I get something for my money.

      One thing I did get from the Casino. Pallets. Lots of pallets. Which was a large portion of my firewood. However, one day while picking up a load, three huge black limousines pulled up to the management building, which was adjacent to the pallet storage area. A half dozen corporate executives in $2k suits, stepped out, with their girlfriends in tow. It was right out of “Goodfellas”. I mean, they looked like the mob.

      As a light Oregan coast drizzle was coming down, one of these crooks looks over at me, and says..”Hey dickhead, go get me an umbrella.” He thought I worked there. I said back..”Hey asshole..go fuck yourself”. He came back..”What did you say”? I replied..”You heard me..go fuck yourself..I don’t work here”. Which made every “executive” turn my way. By the looks on their face, I could tell it was time to skidattle out of there. Which I did..pronto. But, to see the look on that assholes face was worth the risk. I’ll never forget it. He was astonished someone had the guts to tell him to go fuck himself. I think he would have shot me right there and then had I stuck around.

      All I know is..these Casinos are still run by the mob, no matter how “corporate” they look.

      07/15/15 8:26 AM | Comment Link

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