Casino Study Bolsters Rival Sides In Debate
LANSING — Frank Fahrenkopf and Rep. Patricia Birkholz agree that a report by the National Gambling Impact Study Commission is the written authority that best supports their opinions on casinos.
That’s about all they agree on.
Considering the strong opinions on both sides of the casino debate, any agreement at all is surprising.
Fahrenkopf is president of the American Gaming Association, based in Washington, D.C. Birkholz, R-Saugatuck, has helped lead the legislative battle against casino development in eastern Allegan County.
With a 52-51 vote, the House recently rejected a proposal that would have encouraged gambling compact negotiations between Gov. John Engler and the Gun Lake Band of Potowami Indians.
The Gun Lake Band still plans to build the casino, which would include a hotel and restaurant, about midway between Grand Rapids and Kalamazoo, without state support. To move forward with the project, the band says it will negotiate with the federal government to give the proposed site trust status, eliminating its need for a state compact.
Casino opponent Rep. Wayne Kuipers, R-Holland, vows, “We’re going to watch them try.”
Michigan has 21 casinos — only Nevada has more — with nine American Indian tribes looking to start new operations, and many existing operations expanding.
In the debate over casino industry expansion in Michigan, a main arguing point for both sides is whether the industry lives up to its main promise: large numbers of steady, high-paying, entry-level jobs.
Tribal officials project their proposed casino complex in Allegan County’s Wayland Township would directly employ 1,500 people and create 43,000 casino-related jobs.
But Kuipers says casino advocates should “re-evaluate those numbers. Our data shows that for every $1 spent at a casino, the cost to society is $3. So you can talk about new jobs and businesses, but in the long run a casino really undermines the local economy.”
Citing the 1999 national gambling commission report, Birkholz agrees. “The documented research shows what happens to communities, and in the long run it’s not positive. There’s an influx of cash originally, no doubt about that. But in the end they do not provide the promised amount of good, high-paying jobs.”
Fahrenkopf, however, counters that such qualms about the long-term benefit of casinos and casino jobs are unfounded. Citing the same report, he says that destination-based casinos — casinos with restaurants, hotels and other businesses — are proven to improve local economies, reduce unemployment and attract new capital investment to struggling communities.
Fahrenkopf refers to a section that reads, in part, “The economic benefits of casino gambling have been especially powerful in economically depressed communities where opportunities for economic development are scarce. Unlike many industries, casino gambling creates full-time, entry-level jobs, which are badly needed in communities suffering from chronic unemployment and underemployment.”
Birkholz’s sharply contrasting view is also supported by the report, however, with testimony from several casino-hosting cities, including Atlantic City, that detail the demise of small businesses after casinos came to town.
The report also notes differences between tribal and commercially owned casinos. According to the report, testimony from tribal leaders showed “a handful” of large, successful businesses, but the vast majority of tribe-owned casinos aren’t financially viable.
The report also showed that, nationally, tribal reliance on federal assistance has not been affected, and unemployment among Native Americans “continues to hover around 50 percent.” All but three of Michigan’s casinos are tribally owned. The commercially owned casinos are in Detroit.
The report by the federal commission, comprised equally of pro- and anti-casino members, contains evidence that can support Birkholz or Fahrenkopf, but hands victory to neither side.
The report reads, “There are both significant benefits and significant costs. The key question is this: How do gambling’s benefits measure against its costs? Even after two years of extensive research, the question cannot be definitively answered.” Pointing to the complexity of the question and the inadequacy of previous studies and collected data, the commission recommended intensive and impartial research.
Birkholz says it’s important to remember that casinos aren’t the only way to create jobs, and that a casino’s social cost to a community might eliminate some other options.
“I know of several other businesses looking to locate in Allegan County, and they’d offer everything from service-oriented to high-level management jobs. There are always companies looking for a place to locate, and we also need to retain the businesses we have.
“One of the main reasons businesses choose western Michigan is our high quality of life. We need to maintain that quality of life for our communities to stay competitive.”