racetracks

30 • NORTHEAST PENNSYLVANIA BUSINESS JOURNAL • SEPTEMBER 2003
Horses, slots create ‘racinos’
‘Racinos’ could provide ‘destination entertainment’ venues at
existing race tracks, benefit ancillary businesses
Continued from page one
a race track, which ultimately reduced the
daily income at the track and made it more
difficult to run a racing operation. Smaller
and smaller crowds eventually took their
toll on the breeding industry as well, with
the reduction of purses to the horsemen,”
said Dissinger.
In the early 1980s,Atlantic City took a
swing at the gaming industry.Their success
was followed by riverboat gaming and
large-scale gaming developments by the
Native Americans across the country, all of
which also contributed to a further decline
in revenue on the horse racing scene,
according to Dissinger.
“In the late 1980s, the introduction of
interstate simulcasting allowed more
opportunity to increase revenue for the
horse racing industry. (But) that is still not
enough,” said Dissinger.
More needs to be done, he said, to save
the sport and business of horse racing —
currently valued at $1.4 billion in
Pennsylvania as reported by the
Pennsylvania Department of Agriculture
this past June.
The Tomlinson Bill is aimed at offsetting
the state’s current budget deficit by introducing
a new gaming market while preserving
the horseracing industry.
The combination of the two industries is
anticipated to bring about other positive
impacts on regional economic development
through the expansion of hotels,
restaurants, and other businesses that will
benefit from an influx of visitors.
According to Ewing Cole,“In order to
accomplish this, integrated racing and
gaming destination entertainment developments
should be strategically located
around the state to maximize the ultimate
revenue potential in a region. Care
should be given to identify locations
that can capture revenues outside the
borders of Pennsylvania.”
“The racing venue must become part of a
larger complex,” said Dissinger.
Successful “destination entertainment”
venues must be developed with a more
comprehensive view that capitalizes on
multiple revenue generators.
“This includes interactive attractions,
game arcades,‘eater’tainment,’ specialty
retail, museum attractions, sports bars, hotel
and conference faculties, and luxury spas.
The overall goal is to maximize revenue by
increasing patron length of stay and repeat
visitation while enhancing the overall visitor
experience,”Ewing Cole notes.
“Legislation has stalled over the summer
as proponents of the various gaming bills
attempt to find agreement on the best plan
for the state,”said Dissinger.
The legislative debate centers around an
important issue: to only introduce slot
machines at existing, state-licensed racetracks
and a few future ones and, in addition,
to allow land-based faculties in
urban areas.“The goal of this legislative
initiative is twofold: add additional
income to the state treasury through the
taxation of additional gaming revenues,
Gambling: the pros and cons
PRO:
Members of Bring Our Taxes Home (BOTH) support
placement of slot machines at Pennsylvania's
licensed standardbred and thoroughbred racetracks
“because of the revenues it will generate for
state and local governments, for the jobs it will
save and the new ones it will create and for bolstering
Pennsylvania's sagging racing heritage.”
BOTH members argue that this can be done simply
by bringing home dollars now spent by
Pennsylvanians on slot machines in neighboring
states. Their argument:
WHERE PENNSYLVANIANS GO TO GAMBLE
Pennsylvanians made 9.6 million trips to gamble
out of state in 2001 (That's an average of 26,200
trips a day)
■ Twenty-five percent of monies wagered in
Atlantic City come from Pennsylvania (Pennsylvanians
made 2.9 million day trips and 4.3 million
overnight visits to Atlantic City in 2001 and spent
$2.88 billion).
■ Pennsylvanians made 575,000 trips to Las
Vegas in 2001 and spent $349 million there
■ Forty percent of monies wagered in DE come
from Pennsylvania.
■ Twenty-five percent of monies wagered in West
Virginia comes from Pennsylvania.
■ Additional Pennsylvanians wager in New York,
Connecticut, Canada.
This adds up to a staggering $3.2 billion of
Pennsylvania dollars spent (left behind) in those
states. Most (80 percent) is spent on slot
machines. And this doesn't include an additional
$1.5 billion in non-gambling expenditures while in
those states like lodging, retail, entertainment,
food and beverage, transportation.
(Sources: Atlantic City Visitor Profile - 1998
Final Report, Plog Research, Inc.; Profile of the
American Casino Gambler, Harrah's
Entertainment, Inc., 2002; International Gaming
& Wagering Business, September 2002; Las
Vegas Visitor Profile - Fiscal Year 2001 Annual
Report, GLS Research; Las Vegas Convention And
Visitors Authority Research Dept, 2002; Atlantic
City Convention & Visitors Authority Research
Department; Christiansen Capital Advisers)
CON:
Citizens for a Stronger Pennsylvania (CSP) is a
campaign by Pennsylvanians Against Gambling
Expansion (PAGE), No Dice, and other Pennsylvanians
to prevent the introduction of various forms of casino
gambling, including slot machines, riverboat gambling
and video poker. CSP’s argument:
IOWA — Problem gambling has more than tripled
since casinos opened, with rates rising from 1.7 percent
to 5.4 percent of all adults, said a 1995 statesponsored
survey. A similar jump in Pennsylvania
(which has about 8.4 million adults) would mean over
300,000 new problem gamblers.
ILLINOIS — Gov. Jim Edgar admitted riverboat gambling
“hasn’t increased tourism or generated new
income.” The state’s Economic and Fiscal
Commission found little evidence of spinoff benefits,
and an independent study in June 1996 estimated
the casinos actually produce $239 million per year in
net losses for local economies — even counting tax
revenues as gains.
MINNESOTA — The state’s Restaurant and Hotel
Association reported business down 20 percent to 50
percent at establishments near Indian casinos.
Gambling-related personal bankruptcies have soared
to an estimated 1,000+ per year, and a state that
previously had just one Gamblers Anonymous chapter
now has 53.
WISCONSIN — A 1995 survey of customers at
Indian casinos found: “More than 10 percent of the
locals would spend more on groceries if it were not
for the casino, while nearly one-fourth would spend
more on clothes. 37 percent said that their savings
had been reduced.”
LOUISIANA — Political scandals and organizedcrime
raids led gubernatorial candidate Phil Preis to
joke in 1995, “The only growth industry we’ve got
right now is the FBI.” Other negatives include a “very
high” 7 percent problem gambling rate, and a study
showing that riverboat casinos drained $102 million
from the metro New Orleans economy through 1994.
MISSISSIPPI — Thefts and other crimes roughly
doubled in the towns of Gulfport and Bay St. Louis
after casinos opened. In Biloxi, divorces rose 250
percent, crisis calls to a local women’s shelter doubled,
and total violent crimes rose from 5,072
Above are two views of the proposed “Freedom Park,” a “racino” to be located off Route
33 in Palmer Township, provided it gets slots and a state license. According to the
Allentown Morning Call, “other major players are looking to snare an available
Pennsylvania license.” Churchill Downs is backing plans for “Pittsburgh Palisades Park,”
a $500 million racetrack-casino-retail development. Magna Entertainment, a Canadian
company, proposes to build a thoroughbred track near Pittsburgh International Airport.
Edson Arneault, who operates a gaming resort in West Virginia, has pledged to donate
$60 million to build a hockey arena for the Pittsburgh Penguins if Pennsylvania gives him
a racetrack license. Rendering courtesy of Ewing Cole Cherry Brott
while enhancing horse racing,”he added.
Advocates of the bill want to retain
Pennsylvania’s fair share of the gaming
economy that has expanded significantly
over the last several years in such places as
Atlantic City and other states ,like West
Virginia and New York, which have recently
incidents in 1993 to 7,413 in 1994.
NEVADA — With over 300 casinos, Nevada consistently
ranks at or near the top among all states in per
capita suicide rate, incarceration rate, high school
dropout rate, deaths per vehicle mile, and child death
by abuse.
NATIONWIDE — US News & World Report (Jan. 15,
1996) computer-analyzed data from casino areas
across the country. In terms of economic growth, the
magazine found no significant difference between
casino areas and the rest of the US. But crime rates
in casino areas were nearly twice as high — 1,092
incidents per 10,000 population vs. 593 — and
approved slots at racetracks.
Those against the bill deem it “illegal
and immoral,” saying it creates a potential
for addiction, but proponents say it’s just
another form of entertainment — one
from which Pennsylvania has an opportunity
to benefit.
“towns with casinos have experienced an upsurge of
crime at the same time it was dropping for the nation
as a whole.”
A final note: Ten years ago, problem gambling
among teenagers in the United States was considered
a rarity. In 1995 about 12 percent of the calls to
the nationwide 1-800-GAMBLER helpline involved people
under 21.
(Sources not cited nor taken from public records: Edgar quote, Chicago
Tribune. Illinois study, Better Government Association of Chicago. Minnesota
figures, Minneapolis-St. Paul Star Tribune. Wisconsin survey, Wisconsin
Policy Research Institute. New Orleans study, Policy & Management
Associates for URA of Pittsburgh.)
TGI Friday’s benefits raise money for Make-a-Wish
A check for $20,000 was presented to the Make-A-Wish Foundation of Northeast PA
from money raised at the Wilkes-Barre, Williamsport and Quakertown TGI Friday’s
Bartender Challenges and also at a recent benefit golf outing. From left to right are
Andy Sweitzer, general manager, TGI Friday’s; Jeffrey Metz, vice president of operations,
TGI Friday’s; Art Owens, director of program services, Make-A-Wish
Foundation; and Jessie Hardy, president and CEO, Make-A-Wish.