chasing a mirage:

Shipboard Casinos a bad bet for the aloha state

 

the honolulu advertiser

3/21/00

 

For the past few years gambling lobbyists have been working our State legislators to introduce large-scale gambling as an instant cure for our ailing economy.  In the news recently is an effort by the Mainland owners of the Windjammer Cruises to introduce shipboard-based casinos to our Islands. 

promise millions in taxes — but ignore true costs.  As usual, the lobbyists and local agents dangle claims of enormous economic benefits, bountiful state tax receipts, "more jobs and less welfare," "money for education," and an "economic boom for all sectors" before revenue-hungry legislators.  They use statistics and optimistic projections compiled by the gambling industry, or select only the most optimist estimates from a State study.  And also as usual, they never talk about the costs of dealing with horrendous social problems caused by gambling, or the cannibalizing of locally-owned small businesses resulting from dollars being siphoned away by offshore gambling owners. 

Neither the lobbyists or their friends in the Legislature mention, for example, the many negative warnings contained in the study done on shipboard casinos by our state's Department of Business, Economic Development and Tourism.  Nor do they mention:

* a well-known objective study that found Illinois taxpayers had to pay $3 to remedy gambling-associated social problems for ever $1 of state tax revenue collected.[1]

* a recent Maryland study finding that for each $40 generated by gambling, the state spent $200 on service.[2] 

* the 1994 study conducted by Florida's Department of Commerce that found that the costs and impacts on the criminal justice system, the social welfare system, small businesses, and the local economy, would be significantly greater than any revenues brought in by casinos.[3]

 

Get a foot in the door, first.   Nancy Todd, who helped run the campaign to legalize riverboats on Mississippi's Gulf Coast, admits that gambling companies follow a carefully scripted "ladder" approach to move into a state.  "Areas that have no gambling at all warm up to the `cruises to nowhere' as the first rung on the ladder.  The next step would be dockside.  At the top would be land based casinos."[4]

Many Mainland examples demonstrate how carefully crafted campaigns led ultimately to legalizing other forms of gambling.   The Louisiana legislature initially approved "riverboat gambling" on ships that cruised; today they are permanent dockside gambling casinos.  In order to earn greater profits, gambling vessels routinely flout going-to-sea requirements, and instead remain moored at their docks.  In the first half of 1997, for instance, Louisiana's floating casinos "canceled" between 88 percent and 98 percent of their scheduled cruises.[5]

casinos are an economic drain on local communities.  Illinois has ten river boats licensed, operating, and bringing in taxes.  But a comprehensive analysis of revenues — which included harmful social and economic costs borne by taxpayers — showed that riverboat casinos resulted in a net loss of $ 6.7 million to the state.  Local areas found $239.7 million a year drained from their economies.  In sum, concludes a report issued by the Federal Reserve Bank of Kansas, "Casino riverboats are detrimental to the economic development of local areas in which they operate."[6]

major hidden costs.  Everything I have researched about gambling leads me to conclude that legalizing gambling will inevitable increase human misery and economic dislocations in our Islands.  Money spent on gambling won't be spent at local restaurants, theaters, retail stores, and visitor attractions.  On the Mainland, for example, 

* Six of the counties with the highest bankruptcy rates in the nation in 1996 were located near the ten riverboat casinos in Tunica, Mississippi.[7]

 

* Iowa counties with a casino, racetrack or riverboat, have a bankruptcy rate 21 percent higher than the state average.[8]

 

Jobs (mostly lowpaying) gained through gambling will only partially offset the loss of jobs from bankrupt local businesses.  Casinos also destabilize real estate prices, skyrocketing the prices of land and property taxes near gambling sites, and depressing prices in surrounding neighborhoods most affected by an inescapable jump in crime.

The data also show that easy access to gambling facilities dramatically increases problem and addictive gambling, domestic abuse, child neglect, suicides, and more.  And gambling is the fastest growing teenage addiction, being twice the rate of adults.  Up to 90% of problem gamblers commit crimes to pay their debts, including stealing from employers and parents, credit card and insurance fraud, and tax evasion.  To address gambling-associated problems we will have to increase social spending 100-550%, say experts.¹

Hawai'i already has its pathological and problem gamblers, who now must travel out-of-state to satisfy their addiction.  If shipboard or land‑based casinos are allowed in Hawaii, the amount of problems associated with gambling addiction will likely increase, reports the State's Department of Business, Economic Development and Tourism.[9]

don't ruin the aloha state.  Cheryl Lau, Hilo born, and Nevada's Secretary of State for four years, advises Islanders to be very careful about losing Hawai`i's idyllic ambiance as a Paradise of the Pacific.  She worries that Hawai`i's sense of place would be affected by the taint of mass gambling. "Making gambling legal as it is in Nevada, won't offer a quick cure.  Nevada is a different place altogether."  Cheryl Lau loves her birthplace and looks forward to returning to Hawai`i eventually.  "Don't covet Nevada's reputation.  The trade‑offs are just not worth it."[10]

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Ira Rohter is a Professor of Political Science at the University of Hawai`i — Manoa and serves as a State CoChair of the Hawai`i Green Party.