Thursday, February 2, 2012

Conservative Opposition Dooms Destination Resorts Bill

One of the most contentious fights during the 2012 legislative session (other than redistricting) has been the battle over several gambling bills: legislation that would ban internet "sweepstakes" gambling cafes, and also a proposal that would allow the creation of "mega-casinos" (or, as the proponents refer to them, "destination resorts") in South Florida.

The fate of the internet cafes still remains to be seen, but the destination resorts bill appears to be scheduled for execution within a few hours...

Florida House Bill 487, the so-called "Destination Resorts" bill, comes up for a vote in the Business and Consumer Affairs Subcommittee tomorrow morning. (Read the full text of the bill here.) Earlier tonight, Representative Scott Plakon tweeted that he had decided to vote against the bill:

I will voting "NO" on the Destination Resort Casino bill (HB 487) tomorrow morning. #sayfieThu Feb 02 23:46:06 via HootSuite

Representative Carlos Trujillo has also taken a strong stance against the bill, writing an op-ed detailing his reasons for his opposition (the bold highlighting is mine):

The Risk of Certainty: Miami-Dade County and Destination Resorts
Ten years ago, few could have predicted that Midtown would be home to some of finest restaurants in the United States, that the Design District would become an international cultural and design hub, or that Downtown Miami and Biscayne Corridor would see the rise of new, inspired, and immediately iconic architectural gems.  Gifted chefs and restaurateurs such as Michael Schwartz and Michelle Bernstein, art gallery owners such as the Rubell Family and Martin Margulies, developers such as Craig Robbins and the Related Company with a pioneers’ spirit, took risks, with no certainty of success, to force a needed evolution and renaissance in our still burgeoning world class city.  Yet today casino proponents have arrived in South Florida with absolutes and guarantees of the 100,000 jobs that will be created, that existing businesses will thrive and that casino expansion will generate additional revenue.  These are the same casinos that have time and again peddled false promises of economic prosperity and the same casinos that our community has rejected by referendum in the past.
Mega casinos thrive as they cannibalize existing local businesses.  Casinos are purposefully designed to be self-contained and include dining, entertainment and gambling under one roof so that patrons do not leave the casino premises.  The proposed casino is no different – 5,000 rooms and over 50 restaurants, bars and night clubs.  Our local hospitality, entertainment and retail industries will suffer similar consequences to those in Atlantic City where only 10 percent of the businesses nearest to casino locations are still open today, and the number of retail businesses declined by one-third within the first year of casinos opening.  In Iowa, taxable retail sales in cities without casinos grew more than five times faster than sales in cities with casinos.  Lastly, an independent gaming commission in New Hampshire found that bringing one casino would eliminate seven local existing jobs for every 10 casino jobs created.  Do we truly believe that competing local businesses surrounding a mega casino will survive? How will that affect the natural process of economic and cultural improvement already occurring in these areas?  Local venues are likely to see reductions in revenue because neither local nor tourist dollars are being spent in Midtown, Design District, Miami Beach or Brickell.  If these bleak numbers are not enough to convince you, take it from one of the biggest proponents of gaming in the world, Steve Wynn of Wynn Resorts, who told a local businesses owner in Bridgeport, Connecticut which considered casino expansion in 1990: “there is no reason on earth for any of you to expect for more than a second that just because there are people here, they’re going to run into your restaurants and stores just because we build this building here.”
Casino proponents claim that 100,000 jobs will be created and that expanded gaming will generate additional revenue.  This figure is widely misleading for several reasons.  The figure includes a substantial amount of temporary and part-time jobs, of which most will be low paying.  Moreover, the skills required to perform casino jobs are not easily transferred to other industries thereby limiting upward mobility and inhibiting the marketability of a displaced worker during difficult economic times. It is not a coincidence that the highest unemployment rate, the highest foreclosure rate and the highest personal bankruptcy rate in the U.S. are in casino dependent Nevada.  While expanding gambling produces additional revenue, it also increases social costs.   In 2010 the same New Hampshire study showed one casino would raise $219 million in state revenue but the total social cost would be $287.7 million – a net loss of $68.7 million.  Much of the social cost will burden Miami-Dade County who will be forced to allocate limited funds to improve its transportation infrastructure, regulatory expenses, and increase public safety.              
Numerous studies detail that crime rates are low shortly after a casino opens, but crime rates increase with the passage of time.  Studies show that there are increases in the amount of prostitution and statistical data taken from FBI Index I crimes shows that new casinos have a direct correlation with increases in crime, including: rape, robbery, aggravated assault, burglary, larceny and automobile theft.  Counties that neighbored casinos did not have corresponding reductions in crime, indicating that crime was not shifted from county to another, but rather, that casinos created new crime.  It is estimated that 8.6 percent of property crime and 12.6 percent of violent crime is due to the presence of casinos in the counties observed.
Contrary to the argument posited by proponents of HB 487, it is undeniable that this is an attempt at expanding gambling.  To say otherwise is wrong, preposterous, and unfortunately, an attempt to mislead a community in desperate need of economic relief.  I am not opposed to competition – quite the contrary, my voting record in the House of Representatives exemplifies my credentials as a proponent of the free market.  I am opposed to HB 487 on empirical data that shows Miami-Dade County as the next community that will fall victim to the expansion of gambling.  We must be skeptical of the casino industry’s promises because when one over promises, often times one under delivers.  Let us not forget that the only certainty with casinos is that “the house” always wins.
Plakon and Trujillo both serve on the Business and Consumer Affairs Subcommittee, which has control over the fate of this bill. If the bill is not approved by the subcommittee, it will die there and not proceed any further in the legislative process. By my calculations, there are not enough votes to promote the bill out of committee, so destination resorts seem least for this year.

UPDATE: The Miami Herald also predicts that the destination resorts bill will fail.

1 comment:

  1. Good for these guys. A local community should be allowed to say they don't want things like giant casinos/gambling (and the things that come with it as the op-ed points out), strip clubs, or alcohol. Yes, there are actually dry counties in some parts of the country. Imagine that, the locals deciding for themselves what kind of town they want to live in.

    While it might seem like it, this type of *local* control doesn't subvert the free market. Rather, it is simply another part of it. Community A says "you have proposed that your business will benefit us X, but we see that it will cost us Y (more police, infrastructure, etc) No, thanks." Community B might disagree and decide they're willing to take the risk. When that type of discussion and decision happens locally, it seem healthy to me.

    Personally, the voters of Columbus where I used to live bought the silly arguments about how great a casino would be in my backyard. I moved out before they broke ground. That was my free market choice.


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