There are good arguments on both sides of Building a Casino

Joe Petrowski - Overlooking the Business Battlefield

Listen to Expert Talk on Casinos in the Podcast

 

The City of Brockton like many communities is debating the Pros & Cons of a Casino to drive economic development, generate tax revenue and permanent jobs.

There are positive points on a Casino:

  • First of all, it creates 1,500 construction jobs;
  • Secondly, over 2,000 permanent jobs paying $120 million per year in wages;
  • Last, it generates tax revenues in the $10 to $20 million range.

There are two points on the negative side:

  • First, the gambling market is saturated as evidenced by Atlantic City’s struggles, northern New Jersey’s plan to expand gambling in that state, Maryland and Pennsylvania have recently entered the market and over all North American incumbents lurk the specter of a revitalized Havana Cuba;
  • Second, opponents of casino gambling also point to the social costs of gambling addiction, funneling disposable income away from more desirable or necessary purchases (food, education, housing, investment) but those can be managed and it is not the government’s function to determine how we entertain ourselves. Casinos on their own do not depress housing values nor will they will generate a lift. It depends on how the casino fits into the overall economic development of the community.

So, how should Brockton, MA proceed?

According to Joe:

  • Casinos are a Net Positive when they bring in visitors from outside the community rather than recycling locals’ money. That would be unacceptable in this country and to only admit non-Brockton residents and impossible to execute. Greenbrier resort in West Virgina only allows registered guests in the resort to gamble which is a more effective way of achieving the same purpose. A casino if built should be bundled with a resort, day spa, or athletic facility.
  • Who operates the casino is key. Only an established casino operator with a record of success and as established marketing book should be considered.
  • Thirdly, Casinos use substantial amounts of energy to: heat, cool, light, cook, vacuum and launder. Their nighttime prime usage is a desirable load profile. Most casinos have their own CHP (combined heat and power) facilities. This allows them to produce electricity for 8 cents/kwh and sell it back to the grid at a profit during the day. Record low natural gas prices are supporting this.
  • Additionally, bundling the site construction and operation with another enterprise such as a school or elderly care facility would make great economic sense.
  • Massasoit, U Mass, and Bridgewater State have looked to develop a satellite school collaboratively in Brockton. Building a school focusing on hospitality and gaming management would give students tangible experience while providing the casino with a pool of talent.

What everyone can agree on, Brockton desperately needs an expanded tax base and economic development generating employment and opportunity for its young. While a casino might not be the perfect choice it can be a net positive, if a first class operator is in place, non Gambling revenue is generated, costs and uses are spread among other activities, and attract revenue from outside the community.