US states embrace casinos to drum up tourism in sluggish economy

Betting on Casinos

FILE - This Jan. 4, 2012 file photo shows gamblers at the slot machines at the Resorts World Casino at the Aqueduct Racetrack, in the Queens borough

New York Gov. Andrew Cuomo announced last week that he would work with the Genting Group, one of the world’s largest gambling companies, to build a $4 billion convention center and big-time casino on the outskirts of New York City.

Massachusetts passed a law in November allowing up to three resort casinos, plus a slot machine parlor, at locations around the state.

Ohio is poised to see its first commercial casinos open this year, after voters approved up to four gambling halls in 2009. Maryland’s first casino opened last year, with more on the way. Pennsylvania’s first casinos opened in 2006, and already the state is threatening to surpass Atlantic City as the nation’s second-largest gambling market.

In Florida, lawmakers are hotly debating a whopper of a bill that would allow up to three multibillion-dollar casinos, plus additional slot machines at dog and horse tracks. Genting appears confident the law will pass. It has already spent around $450 million to acquire waterfront property in Miami, where it wants to build a $3.8 billion complex that would include a casino, dozens of restaurants and a shopping mall.

US States have embraced casinos, after years of trepidation about their societal costs, for two simple reasons: a promise of a rich new revenue source, plus the possibility of stimulating tourism.

Last week alone, Genting’s new gambling parlor at Aqueduct made nearly $13 million.

Some experts, however, have questioned whether revenue bonanzas that large are realistic, and say states should be cautious about giving up too much to lure these projects. Competition for a limited pool of gambling and tourism dollars is already fierce, and recent years haven’t been kind to casinos.

As gambling options have increased in the eastern US, in the end few people will need to travel to gamble. And that could mean that the tourism promise of the casinos largely goes unfulfilled, as the gambling tables and slot machines are played predominantly by locals taking revenue from other parts of the economy, rather than out-of-state visitors bringing in new dollars, said the Institute on Taxation and Economic Policy, a Washington DC research group that advocates for progressive tax codes.