death of the casinos-part 2

[notes1]

 started a part 2 because part 1 was in vegas section. also, ted and db's squabble has cluttered the thread. it is easy and obvious to point to the poor economy, over saturation and poor management for causing the problems in the casino business. but, the gambling industry does not operate like most any other business. why, because the government is involved from the onset. i would just hope that those who favor more and more government, would see the relationship. most of the casinos built over the last 10 years resulted from a desire for additional tax revenue or tribal income. the highest bidder won the rights to build or some tribe deemed it land that was once stolen from them, and get exclusive rights. the casino has no incentive to be competitive, there is limited/if any competition and the government gets what they want, more money to spend and credit for more jobs.  the concept is flawed from the beginning. the end user, the players,  ought to be the primary concern, but instead, they are taken for granted. as payouts decrease, the novelty wears off and the cost of gambling increases, everyone loses. if a true free market existed, only the strongest, those that offered the best value for the customer would survive. many casinos would not even had been built to begin with. would there be an apple, an amazon, an ibm if their beginnings, started with government approval?      

[case]

States that don't have any or very little gambling are losing revenue as their people cross borders and gamble in nearby states. Look at Texas for an example. How many of their residents head to Oklahoma and Louisiana to gamble? How long before Texas caves in to demand? They are losing so much in revenue to the two mentioned states that it will be only a matter of time before you see Texas casinos. When they do build Oklahoma and Louisiana will be crippled. Same thing happened to casinos along the Indiana border when Ohio started to build. The casino built in Cincinnati had a huge impact.

So greed and demand will be the biggest downfall for casinos. Perhaps in the future we will see more casinos but they will be much smaller with less overhead instead of the huge Winstars we see today. Or they will be huge casinos that drive out all the smaller casinos.

Notes is right about the government relationship to casinos. They call the shots.

Something has to change.

[FloridaPhil]

Good points.  I have to give it to Florida for not going overboard with casinos.  Obviously, the players are there, but too many casinos are bad for business.  I also think bad odds are due to governments sticking their hands in the cookie jar.  Vegas will survive because they have dreams to sell instead of casinos in the middle of a slum.   Personally, I think two types of casinos will survive in the future,  mega resorts in vacation oriented locations and small "gambler friendly low overhead" facilities.  No shopping mall or nice waterfall can make a bad casino profitable.

[Tedlark]

A couple continuations with regard to the posts made by:

notes - Not always has the highest bidder been awarded a casino license.

case - Illinois politicians are too ignorant of how much gaming revenue is leaving the state because of the legislature's inability to place casino(s) largely near the Illinois/Indiana and Illinois/Wisconsin borders. It is illogical to think that Illinois, with legalized casino gambling, cannot agree on a casino (or multiple casinos) in Chicago. A casino in Chicago would play a minor part with conventions but just the number of Chicagoans who flock to Indiana casinos is a high number. Granted: Indiana allows smoking in casinos while Illinois doesn't but the smoking ban Illinois has, was in place for several years now.

   

[Chicagoan]

There is a balance to the revenue a state can realize from casinos in the expenditures on social services and law enforcement/prosecutions. I have a friend who is the Assistant Special Agent in Charge of a very large metropolitan office of the FBI. He has told me that the big increase in casino availability has greatly increased white collar crimes, especially embezzlement. But the way state budgets are implemented, there is never a true analysis of the real cost of gambling, so we will never know if the increased revenue is truly "profit" for states. I do know this: in Tennessee, Louisiana, North Carolina and Illinois (4 states that were included in an analysis I did professionally) the state lottery was originally established to provide additional funds for the state's educational systems, and in all 4 states the school systems continue to be badly underfunded.
So are those states such as Texas which are sending residents across the border to gamble really, in fact, losing revenue?

[notes1]

congrats ted, you found a flaw in my post. i am sure there are more. a bidder with poor financials, a questionable background, did not pay enough of a bribe to those who are making the decision or some other reason, would disqualify a potential applicant.

[notes1]

case is spot on, few states could resist the temptation of additional revenues and many casino operators could not resist the notion of a gaming monopoly in an area. this opened the gaming license flood gates. but again, it started with the government being involved from the onset. it was based on producing tax revenues or tribal income, rather than a service the customer wanted, at a value, they considered reasonable. these days many companies locate their operations where the taxes are the lowest, instead of where the burden is the highest.  chicagoan appears to have some expertise in this area. but, what i have read, is that states that start lotteries to pay for education, simply reduce the monies they were allocating for that purpose, when the lotteries are approved. as a result, few additional dollars are spent, monies are diverted to other areas. also, what is the proper defintion of schools being 'underfunded'. DC schools have an average expenditure of approx $29k per student, per year. and, they will still argue they are not getting enough. more money is not always the answer, spending it wisely is rarely discussed. 

[Chicagoan]

Notes, the total operating allocation per student per year varies widely. It is greatly influenced by factors that may not be under the control of local educational leadership, including: cost of living, climate, and relative age/quality of the actual school buildings themselves. It is very difficult to build an "honest" nationwide cost-to-benefit analysis because of the widely varying operating cost differences. (Lucky Larry might be able to add to this comment.)

[notes1]

i was simply trying to make 2 points. more money does not always solve a problem and once a lottery is put in place, the monies that were being spent on education, are often directed elsewhere. obviously, it costs more to operate in nyc than some town in n.dakota.

[DaBurglar]

i was simply trying to make 2 points. more money does not always solve a problem and once a lottery is put in place, the monies that were being spent on education, are often directed elsewhere. obviously, it costs more to operate in nyc than some town in n.dakota.Notes1, respectfully......in numerous posts here and in other threads, you keep repeating this mantra (WHICH IN ITSELF I TOTALLY AGREE WITH IT as an OBVIOUS truth) that "more money does not always solve problems"  (of course, its a lot more complex and involved than simply THAT!)       Also you keep mentioning that it is better to spend money "wisely" , to which I also say of course!But then you have said numerous times that when lotteries or casino tax revenues are received by cities & states to use for noble pursuits like education, often it ends up being "diverted" or flat out used in some different fashion......Can you possibly offer some proof or direct examples of this actually happening to back up this assertion?       Let me help you do so with this:    I have no DOUBT that somewhere in some city or state where casino or gambling revenues are collected that some of that money gets spent on things that were originally NOT the intended target.     I am not disputing that your statement is wrong, I am questioning the notion of this happening "OFTEN", and furthermore, I then ask....SO WHAT?What you are griping about and asserting is absolutely NOTHING new under the sun, and has been happening since the first state and federal budgets were passed in out history......it is called ADJUSTING and CHANGING priorities and circumstances due to a uncertain and dynamic world!      Year after year, cities & states come up with planned budgets with goals on what to spend and where.....but then reality intrudes, problems happen, storms and accidents and catastrophes and mistakes and before you know it, the budgets need to be revised or scrapped, money needs to be redirected or reallocated or rescinded out right, and everyone gets upset.     How a city or state deals with this simple reality is as difficult to master as it is getting politicians to SPEND the money WISELY as you wished above.....But there is hope and it actually exists right now, but many cities and states do not like doing this because it limits their flexibility:     THEY (i.e. city and state legislators) CAN MAKE IT LEGALLY BINDING that money (or revenue) from casino or lotteries ONLY gets spent on specific things or issues (like education ONLY), and that NO exception to this is allowed!     I am sure you know this......This has been attempted numerous times at all levels of government, whereby an earmark of funds from some tax or revenue source is specifically AND ONLY devoted to a certain thing.......your example of education funds that come from gambling being diverted elsewhere would be solved by this simple provision.    BUT, as you can see and as I pointed out, they HATE doing this because it is too constraining.The greatest example of what you are decrying is of course the whole SOCIAL SECURITY scandal, whereby the Federal government, with the complicity of BOTH parties, has for years used the VAST social security surplus (or what was a surplus until very recently) to mask both overspending (the democrats carrot) as well as tax cuts on the very rich (the republicans' carrot).     In 1983, there was a SSI payroll tax hike  in the midst of the Reagan administration (but with a Democratic Congress mind you), which should have guaranteed the solvency of Social security indefinitely (i.e. FOREVER)........but soon after, and beyond right up to present day, BOTH parties have used those funds to perpetrate one of the worst, least known and least understood scandals in US fiscal history!This is why I keep saying that a third party is needed to threaten the existing 2 parties to either reform or become extinct.