(Blue Dog 23 August 2001)
Gambling With Other People's Money
by Bruce Jackson
Other People’s Money
Like gambling casino owners and operators, politicians breathe an atmosphere in which the oxygen is other people’s money. The bigger-deal politician they are, the less their notion of money has to do with our notion of money. Think about Dubya’s tax cut, rammed through a rollover Congress before the Federal budget was in place, which is pretty much the equivalent of going out and buying a huge gas-guzzling SUV and a 30-foot motorboat without knowing how much money you’ll be making when the bills for those swell new toys start arriving or what you’re going to need for food, rent, medical bills, and the kids’ school expenses.
Or, closer to home, think about George Pataki flying into beleaguered Niagara Falls on June 20 to announce a memorandum of understanding with a segment of the Seneca Nation that would permit construction of gambling casinos in that city, in Buffalo, and at an undetermined third location.
There had been no studies of the social and economic impact of casino gambling on the two cities, no notice taken of their hugely different economic and social situations, no attempt to link this long-term agreement to other Seneca-state issues (such as the massive Grand Island legal action or the continuing dispute about tax-free cigarette sales). Neither had anyone considered the insurance and work-conditions problems sure to arise from plopping into two urban areas a new industry subject to none of the usual rules and safeguards protecting workers. It was just a deal, cut in secret in the dark of night announced against a Niagara Falls postcard background in time to make the evening news, one more political fait accompli, one more grand scheme based on other people’s money.
The next day, Pataki flew to Buffalo for a dog-and-pony show with officials here. At both the Niagara Falls and Buffalo press conferences, Buffalo’s mayor Anthony Masiello was fairly atwitter with visions of other people’s money flowing into the city once a casino was built.
And where was it to be built? The mayor clearly favored the Statler Towers, directly across the street from city hall. The owners of that building, I hear, are applying all kinds of pressure to make the deal to go through without delay: right now, they’re doing okay with the building, but if it’s sold as part of a gambling casino development deal they’ll make a fortune.
The governor and mayor carry on as if we’ll all benefit from the proposed casinos. Not likely. Most casinos make money, but they don’t make money for everybody, and some casinos cost everybody money except the people owning and operating them, the real estate owners who sell the land for them, and the developers who build them. Some cities have helped themselves with casinos; some have harmed themselves. Members of some tribes owning casinos have gotten wealthy; members of other tribes have gotten nothing, or close to it.
When asked about the flood of money Mississippi riverboat casinos supposedly brought to the state, Public Health Service doctor David Romine pointed out that “Casino gambling has brought quick money to the state, but very little trickles down to poor folks or ‘mom and pop’ type businesses. Gambling has also brought increased prostitution and one of the highest syphilis rates in the country.” A Ford Foundation study of Indian-run gambling in Minnesota found that gambling increased tribal income and direct state income, but that much of the money came from other industries within the state, especially entertainment, food and lodging.
The deal Pataki has offered Buffalo—1.5% of casino profits, well under $1 million a year—is a real stinker. When pushed, even Mayor Masiello agrees that it’s chump change. The Senecas would benefit financially, if not politically: the casino would be in our downtown, not on their reservation. They’ll get jobs out of it and whatever portion of the profits they get to split with the state and the professional casino developers; we’ll get the mess—the petty crime, vandalism, increased prostitution, increased police, medical and street maintenance costs.
What’s astonishing isn’t that Mayor Masiello is enthusiastic about this. He’s not a social scientist or an economist or an urban planner, and Governor Pataki has dangled all kinds of political sugarplums before his eyes. What is astonishing is that he signed on without at least trying to find out what scorpions may reside in the purported pot of gold. Or if the pot only contains Fool’s Gold.
Some places are known for public works. Our area is known for public wrecks: the Kensington slashed through viable neighborhoods and made suburban living so easy for downtown workers that the city’s retail trade suffocated; the Niagara river segment of the Thruway cut all but a few of the city’s residents off from its waterfront; the convention center was a flop from day one and it’s ugly to boot; the Scajaquada Expressway bisected one of Frederick Law Olmsted’s great parks and destroyed one of the city’s great boulevards; putting UB out in Amherst, the mother of all lousy urban planning decisions, directly caused a huge population shift to the suburbs; and on and on. If nothing else, you’d think city hall would have learned by now to at least look both ways before crossing the street.
A large number of sophisticated studies about the impact of gambling in urban areas such as ours have been done in the past decade. Many of those studies were done by groups with no religious position or financial interest. But no one in the governor’s or mayor’s offices seems to have paid them any mind at all. It isn’t that they don’t know about them, but rather that they don’t want to know about them.
The Usual Suspects
Masiello appointed a task force to consider location and traffic options for a Buffalo casino—but not whether or not a casino in Buffalo was a good idea in the first place. That issue, they were told, had already been decided. By whom? By the governor and the mayor and the developers.
Two members of the mayor’s task force are M&T vice president Keith Belanger and Buffalo developer and major campaign contributor Carl Paladino. Belanger chairs and the mayor and Paladino are members of Buffalo Place, a supposedly-independent nonprofit downtown community improvement organization. On July 12, Paladino and the mayor got the Buffalo Place board to pass a resolution endorsing a downtown casino. The endorsement resulted from a telephone ballot, with five of the fifteen board members not participating. No studies, no reports, no nothing. Just telephone calls on a ballot initiated by the mayor and a developer. Make you wonder?
There’s more to wonder about. Former Buffalo Sabres president and real estate developer Larry Quinn is also a member of that Buffalo Place board and he also voted for a downtown casino in Masiello’s and Paladino’s telephone poll. In January 2000, a Buffalo News reporter asked Quinn, “What is the most important action that should be taken to move the regional economy out of its doldrums?” Part of his answer was, “Stop promoting casino gambling and low-paying hotel jobs as the future -- if you think Buffalo's potential is best realized as a convention site, you should move out of town.” What changed between January 2000 and the telephone ballot? Who or what got Larry Quinn to reverse his position?
Assemblymen Sam Hoyt and Arthur Eve, Senator Charles Schumer, Congressman John LaFalce, Buffalo Niagara President Andrew Rudnick, and the New Millennium Group are all urging restraint: look first, they say, think about the implications, do serious rather than pre-loaded studies. The mayor and governor want none of that. The gambling industry wants none of that.
In the past six years, the great majority of gambling referenda on state and city ballots have been rejected by voters across the country, which is particularly impressive given that the gambling industry usually spends huge amounts of money trying to win such referenda and gambling opponents may have facts on their side but they rarely have other people’s money to spread around buying opinions. In Michigan, the gambling industry spent millions and won by a slim 1% margin. The last thing the gambling industry wants is for this issue to be subject to free and open discussion and for the decision to be made by an informed electorate. Politicians are much easier to influence and manipulate.
Plunging ahead without serious preparatory study on an urban casino—an enterprise that is extremely complicated and has potential for incalculable harm—is the political equivalent of marrying someone you met and got drunk with at a bar in somebody else’s town late last night. Sure, you might get lucky. But the odds are awfully good that you won’t.
Facts for Sale
I wrote “serious preparatory study” above because all studies are not created equal. Establishing a commission or committee to look at a problem is the most favored device of bureaucrats who want to pretend they’re moving on a problem when in fact they’re standing perfectly still and intend to remain standing perfectly still. The fact that a problem is being studied tells us nearly nothing except open discussion is over and the conversation is being controlled. Far more important is who is doing the studying and the exact question they’ve been told to study.
Commissioning and utilizing studies is like shopping for clothes. Shop carefully and you can get whatever you want or need. If one place doesn’t have it, another will. If you get something that doesn’t look or fit right, you can throw it out and shop around until you get something that does. If you want a committee to come up with a certain conclusion, appoint people to it who are already committed to that conclusion or make the committee charge so narrow it can’t do anything else.
A few years ago the Narragansett Indian Tribe pressured the Providence, Rhode Island, government to let it build a casino. Providence, like Buffalo, is a town that has seen better times. Casino promoters promised lots of easy dollars and new jobs, but the city turned them down: the dollars weren’t going to go to the right places and they decided the casino would do the city more harm than good.
In response, the Narragansetts hired Cambridge consultants Arthur D. Little, which dutifully reported that there would be 29,040 new jobs and $82 million new tax dollars from a casino in Providence. Neither Mayor Vincent A. “Buddy” Cianci nor Governor Lincoln Almond believed ADL’s undocumented claim that the money going into the casino wouldn’t be taken from elsewhere in the community or that the tax dollars would compensate for community costs resulting from the gambling industry moving into town. The mayor and the governor both know that consultants give you the report you pay for.
I learned this first hand years ago when I worked for Arthur D. Little on a White House study of crime in America. ADL executives shaved key data from the research team’s final report. The ADL vice president supervising the project told angry members of the research team that if the deleted data had been included, Treasury officials would have been unhappy and wouldn’t have given ADL any more criminal justice contracts. The data was being transmitted orally to a Treasury official by someone high in the company, he said. I don’t know what, if anything, the Treasury official was told, and it was moot anyway because a few weeks later he left Treasury for a job in private industry and shortly after that he was killed in a plane crash.
Some people honestly believe a casino in the city of Buffalo will be a good thing for this city at this time. Some others honestly believe a casino in the city of Buffalo will make them rich or richer, or powerful or more powerful.
Which of those pushing it and trying to shut down discussion of the merits fall into which camp? How can any of us know for certain? Some may fall into both camps. Surely they all have their good reasons. But one thing I learned in 25 years of doing research with murderers and other violent felons is this: no one is the bad guy in his own scenario. Every man’s position makes sense—to him. That’s never a reason for the rest of us to fall back and say, “Okay, whatever you say.”
Their motives are not our concern. We’ll never know them, anyway; at best, we can speculate. Our concern is the casino proposal, and what a casino would or wouldn’t do for or to us.
It’s not politicians and their paid consultants and stacked committees you go to for truth in matters like this. Those people all have agendas. These questions need the same kind of open study now going on with the Peace Bridge. Hire consultants, but let the public know what questions they’ve been asked and see what reports they produce. Involve the public every step of the way and do it all in daylight, not at night in secret sessions.
And, most important of all, begin with the questions, not with the conclusions.
copyright 2001 Bruce Jackson