It pained John McKendry to hear that, as he's no fan of the casino. In fact, this small businessman in the Cobblestone District is one of several plaintiffs in the lawsuit against the Buffalo casino, and knows the deal about casino gambling better than most. Still, that's where the woman was headed, so John, not without some concern, dropped her off there.
Later that day, back at his offices, John saw the same woman walking down Perry Street, and went out to talk with her. She had lost her $50 at the casino, and was making her way back to the West Side. With a heavy heart, John gave her a ride home.
A story like this can easily get lost amid all the high-profile and high-drama controversy over the Buffalo casino. Coming on the scene late in the Pataki administration, it was once one of the hottest issues in Western New York. First there was the to-ing and fro-ing about a suburban vs. downtown location. Then the massive protest at project initiation in 2005 and the controversial demolitions and environmental concerns on the project site. The 2006 protracted, head-butting negotiations between City Hall and Seneca Gaming, which became so rocky that at one point Mayor Brown declared an impasse. And the raucous public hearing prior to Common Council's narrow vote to approve the sale of Fulton Street.
But the potential "hidden" cost of having casino gambling in the City of Buffalo, especially surrounded by one of the poorest neighborhoods in all of western New York, has always been on the minds of many. When the Seneca Buffalo Creek Casino appeared likely to go forward, a group of plaintiffs led by CACGEC, the Coalition Against Casino Gambling in Erie County, and funded by the Wendt Foundation, filed suit, claiming the US Department of Interior acted illegally in granting a permit for an off-reservation casino. One of the primary drivers behind this action was the fear of stories like the elderly woman, but multiplied by hundreds or thousands, in a city already afflicted by significant poverty and ill equipped to handle such impacts. In 2012 the legal action remains active and has been making its way through the courts -- having been successful in establishing that point of law but not yet in securing an injunction against operation.
And in addition to the lawsuit, other work has been underway to engage the community on this issue and try to get a handle on its scope. CACGEC conducted a regular series of "Conversations on Gambling" on WUFO AM1080, on which this writer appeared while I was researching an earlier article. And two recent reports have added increased weight to the idea that a casino in Buffalo is an extremely dicey deal for the community.
The first of those reports, a study carried out by Professor Steven Siegel, a Buffalo resident who teaches at Niagara University, shows the casino will be a raw deal for local business and the local economy. His findings were discussed before Buffalo Common Council, and triggered a (weak, in my view) rebuttal from Seneca Gaming. Bolstering his findings are their consistency with those from elsewhere in the nation where this has been studied -- see for example, Bad Odds (from the Wall Street Journal, via Scribd), covered by Buffalo Rising in 2007. So, overwhelmingly, both regional and nationwide studies now show that primarily local casinos do not produce economic development for localities -- at least not positive economic development. And Seneca Gaming has stated in Federal filings that its casino ambitions in Buffalo are to target, predominantly, locals.
The second report, Poverty and Casino Gambling in Buffalo, released last year by the Partnership for the Public Good, considers the socioeconomic impact of having a casino in the city. The message? For poverty-stricken Buffalo, drawing the casino card only weakens an already shaky hand. Sam Magavern of the Partnership told me that the idea for the report was suggested at a community forum in 2010. While the Partnership's press release (PDF) provides a good overview of the report's findings, it's worth taking a look at the full report (PDF). It's accessible, nicely laid out, and a revealing read. It's also footnoted, so you can delve deeply and to your heart's content. Below I've excerpted some passages I found especially revealing.
For 2012, opposition to casino gambling was chosen as a "plank" in the annual public policy advocacy platform of the Partnership for the Public Good. PPG worked with CACGEC and Citizens for a Better Buffalo (a group aiding the casino lawsuit) to focus expertise and public attention on the issue. One of the outcomes has been the Buffalo Common Council resolution which will be submitted this week.
To many, the casino project represents bad planning and urban design. To others, it is not smart economic development. But even more visceral is the social injustice of predatory gambling targeting our city's vulnerable poor, elderly, and weak-minded. Folks like the woman who was walking to the casino with her last $50. Statistics may blur them all together, but to John McKendry and others who pay attention, each remains a face.
When it comes to poverty, yeah, Buffalo needs a new pair o' shoes. But when you run the numbers, rolling the dice on casino gambling looks like the wrong way to go about getting 'em.
Stay tuned for more developments.
Excerpts from PPG report, Poverty and Casino Gambling in Buffalo
Casinos increasingly a venue for poor and minorities
We all know the oft-quoted statistic of Buffalo being the third-poorest city in the nation. So the presence of a casino targeted primarily at locals (as stated in Seneca Gaming documents) raises profound questions. According to the PPG report:
People living in or near poverty are very susceptible to gambling, especially when it is close at hand and convenient. According to a 2004 study, people in the lowest income quintile have more than three times the rate of pathological gambling than people in the top four quintiles. The [study] authors note that the "poor may see gambling as an escape from poverty, making them more prone to gambling pathology."
Disturbingly, the study also found that race was the most significant predictor of problem gambling, with minorities having higher rates than whites.
NGISC [National Gaming Impact Study Center] also found that African-Americans were at more risk for these problems, and that pathological gambling was found proportionately more among the young, less educated, and poor (4-11). Perfetto [a source quoted in the report] reports that 14 percent of extremely frequent casino users have very low household incomes.
Interestingly, this marks a change from 1975, when upper income groups were more prone to compulsive gambling; the authors suggest the change may have come due to the growth in opportunities to gamble for the poor.
The casino around the corner
Compulsive gambling becoming predominantly a problem of poor and minorities represents a turnabout from a few decades ago. According to the PPG report:
How much people gamble is closely related to how close and convenient the gambling opportunities are. The National Opinion Research Center states that having a casino within 50 miles is associated with roughly double the rates of problem and pathological gambling (NORC, 28). Similarly, Welte [a source quoted in the report] states that people within 10 miles of a casino have more than twice the rate of problem or pathological gambling as people further away (7.2 percent versus 3.1 percent) (2004).
The proximity factor is particularly important for people with low incomes, who are less likely to be able to afford trips to "destination" casinos and resorts.
Not just people living in poverty, but impoverished neighborhoods as a whole are at particular risk for problem and pathological gambling. Welte's research shows that people in the most disadvantaged neighborhoods gamble, on average, 72 times per year, while those in the least disadvantaged areas gamble only 29 times per year. Given that in the Buffalo-Niagara metro area 81.4 percent of African- Americans live in high poverty neighborhoods, Welte's findings are particularly troubling.
Unfortunately, the Buffalo Creek Casino is located in a high poverty zone - in census tract 13.02, where the per capita income in 1999 was $11,127, and 59 percent of households were below the poverty line. A major public housing project, the Commodore Perry Homes, is just a few blocks from the Casino.
In the five adjacent census tracts, the per capita income was $11,649, and the poverty rates ranged from 26 percent to 42 percent in 1999. Within walking distance of the Casino one finds areas of dense and extreme poverty, such as tract 71.02, with 3,275 residents and a poverty rate of 47 percent; tract 16, with 4,316 residents and a poverty rate of 44 percent; and tract 71.01, with 4,389 residents and a poverty rate of 53 percent. For the 29,760 people who live nearest the Casino, the per capita income in 1999 was only $13,142.
Just as putting a toxic dump in a low-income area is an environmental injustice, putting a casino in an impoverished neighborhood is a social injustice.
The casino in context: explosive growth of gambling
From the PPG report:
This [report] comes amidst a growth in gambling of near-epidemic proportions. New York has pulled behind New Jersey and Nevada in gaming activity. And nationwide, gambling losses more than doubled in the decade between 1994 and 2003, from Nationwide, gambling has also soared. While in 1994, Americans lost $30 billion in gambling, by 2003 they were losing $68 billion - spending more on gambling than on movies, videos, DVD's, music, and books combined (18).
The core of casino gaming is the closed, contained environment, plus slot machines. The essence of operating a casino is creating an environment in which people will play slot machines as often and as long as possible. As the California Research Bureau notes, "Video poker, slot machines, and other video gambling terminals are the most addictive forms of gambling as well as the most effective at generating revenue. These machines combine quick-cycling, sensory-rich experiences, the psychologically attractive principal of intermittent reward, and the statistically inevitable house advantage which are assured to produce significant gambling losses over time"
Casino patrons are not just gambling with the cash they bring to the casino. According to the NGISC [National Gaming Impact Study Center], patrons bring only 40 percent to 60 percent of the cash that they end up wagering. They get the rest from ATMs, credit markers, and cash advances (casinos charge fees for cash advances ranging from 3 percent to 10 percent or more).
The casino as an economic boon? Not so much, to not so many.
The report suggests one bright spot is the potential for members of the Seneca Nation to reap economic benefits of casino gaming. However, what's played out along these lines has been uneven and inequitable, at best. So far, the casino seems to have primarily benefited well-connected "high rollers."
According to the PPG report:
As feared, corruption and inequity have become problems in the ensuing years. The experience of the Seneca Niagara Casino shows, however, that tribe members are gaining fewer of the jobs and profits than might be expected. In 2004, only about 100 of the 2,145 workers at Seneca Niagara were Seneca, and, as of 2004, the jobs started at less than $5 per hour plus tips (Zremski). Meanwhile, the head of SGC [Seneca Gaming Corporation] was receiving a $574,615 salary with a $650,000 bonus. By 2007 his salary was to increase to $1.2 million, with a bonus of up to $400,000.
Unfortunately, much of the initial profit from the Seneca Niagara casino flowed to a Malaysian gambling mogul named Lim Kok Thay. Lim loaned the Seneca Gaming Corporation $80 million to build the casino at the astronomical interest rate of 30 percent, with the loan earning Lim $96 million over its five-year life. A casino finance expert called it "the worst deal I've ever seen." There have also been cases of corruption among those connected with Seneca Gaming, including significant kickbacks in a land deal for a golf course.