If a state or region hemorrhages red ink and faces long-term revenue generating challenges, chances are the governor and legislatures are landing on a quick fix: gambling. Yes show me a state or city in trouble and I bet they’re considering bringing in an Indian Casino, racetrack slot machines, or riverboat poker.
Some governors are even doubling down. Just last week New Jersey’s Chris Christie proposed a state takeover of the gambling district in Atlantic City, an early entrant (back in the late 1970s)for using gambling as a remedy for urban regeneration. For a while, AC became an East Coast alternative to Las Vegas and generated tens of millions in revenues for a suburban state without much industry. But the gaming gambit did little to revive poor neighborhoods adjacent to the casino district, and more recently the proliferation of gambling competition from other nearby needy states has sapped visits to increasingly shabby beachside hotels and their gambling dens. One major AC casino lost its air conditioning in the midst of last week’s hellacious heat wave. And New Jersey faces one of the biggest state budget gaps in the country.
Where Nevada and New Jersey used to be the only states to establish full scale gambling operations within their borders, casinos now have since spread far and wide. In the Northeast alone, Connecticut entered into deals with local remnants of Indian tribes to allow casinos, more recently Philadelphia brought in riverboats, upstate New York opened Indian casinos outside Buffalo and Syracuse (the Catskills are next), and in the last year the Poconos in Pennsylvania has become a gambling destination. States once content to enact lotteries and numbers games to raise funds, now go full bore, establishing mini Monte Carlos to close prodigious funding gaps. Are we surprised that New Orleans opened a Casino a decade ago to boost its flagging fortunes or Michigan is hot into gambling.
But the nationwide proliferation of state-sanctioned casinos creates ruinous competition. Even Las Vegas, the king of U.S. gambling meccas, sees business decline precipitously as folks watching their budgets in the recession use their travel money to get their fix in at a local slots parlor instead. One of the big Connecticut casino operators, once flush with cash, now seeks to restructure massive debt. And then there is Atlantic City where glitzy new boardwalk hotels had temporarily glossed over urban blight. Now it’s the poster child for states bad bets on gambling.
And while Las Vegas still may be able to attract high rollers from around the country and around the world to the unique Strip scene, its high-end business has been eroded recently by new casino development in Asia.
In the end, the grab for gambling revenues is really a ruinous zero sum game when everyone tries to glom in on the market and turns the experience into a commodity—more like going to the corner bar than a high end resort. For the average recreational slots player, it’s just as pleasurable to hit the nearby casino dive. After a few hours of booze, smoke, and flashing lights it really doesn’t matter where you are.
For politicos pinning their hopes for economic revival on gambling, the wager speaks of desperation. It’s like a poker player down to his last chip.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
