Wednesday, November 11, 2009

Casinos? Here's what happened in Alton

My old buddy, Jim Shrader, who served as publisher of The Times-Reporter for much of the '90s and who is now publisher of the Alton (IL) Telegraph, offered his thoughts on Ohio's casino issue. Without further ado, here's his take:
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I agree with you and reader Kyle on the issue of casinos. They can be important to jobs and new tax revenues for the state, but let caution be the guide.
I lived in Alton, Ill., in 1991 when the city was awarded the first license in Illinois for a riverboat casino. The boat actually had to cruise the Mississippi River, and patrons paid to board the boat. At the time, the city was teetering on the brink of bankruptcy. Streets weren't repaired, damaged vehicles weren't replaced, infrastructure was being pieced back together and layoffs were evident in every department in city government.
Then the Alton Belle Casino opened its doors. The city (and the state) both received $2 for everyone who boarded the boat, PLUS a share of the profits. It didn't take long for the city to go from a deep deficit to a huge surplus. All the backlogs in repairs and replacements soon were being addressed, and the city was more than flush. Those were the good old days.
Even the opening of another casino in East St. Louis (about 30 miles south) left plenty of profits for the boat operator, the city and the state. Life was good.
Life was so good that the folks in neighboring Missouri wanted to play, too. And they did in a big way by licensing "boats-in-moats," land-based casinos surrounded by a shallow pool of water. The resulting casinos were not locked in by the size of the boat and they were bigger, fancier and glitzier than the little boats in Illinois. Guess where the gamblers flocked?
Strike 1.
Fast forward to January 2007 when the Illinois Legislature banned smoking in all public buildings. Government buildings, bars, restaurants, stadiums, bowling alleys and CASINOS no longer could allow smoking indoors. Now what do gamblers do with their free hands? Yep. Drink and smoke. Want to smoke in an Illinois casino? Stop your gaming and step outside. But right across the river in St. Louis, they welcome your cigarettes! Guess what happened to casino (and city and state) profits.
Strike 2.
The one advantage Illinois casinos had over Missouri was they did not cap losses. In simple terms, you had to register with a magnetic card to enter a Missouri casino, and you could only lose $500 in a 24-hour period. Now high-rollers didn't like that cap, so some of them continued to frequent Illinois casinos.
Then Missouri passed legislation to lift the loss-cap. And more recently, when Missouri passed its version of a smoking ban, casinos were EXEMPT!
Strike 3.
Last week the City of Alton laid off 10 percent of its police and fire force and is manning shifts with fewer officers and firefighters. All city departments have had RIFs (reduction in force) through layoffs and attrition. And the city still is facing a deficit.
Yes, casino gambling can bring new monies to the state and the city. The Buckeye State should learn from Illinois, and Cleveland should learn from Alton. Build a rainy-day fund and leave it alone. I promise, one day you will need it.

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