Pros and Cons of Building a Casino in Your Neighborhood

Pro’s †¢ New Jobs †¢ Entertainment †¢ Expand Tourism †¢ Contribution to Community †¢ Contribution to Charitable Organizations †¢ Lower taxes for Residents †¢ Tax Revenues †¢ Higher Wages †¢ Higher Property Value †¢ Extends Visitors Stay in Area †¢ Money put back into Local Economy †¢ Adds to a City †¢ Attracts People †¢ Traffic of People – Better Known Con’s †¢ Street Crime †¢ Prostitution †¢ Takes from Local businesses †¢ No New Businesses †¢ Erosion of Work Ethic †¢ Pathological Gamblers †¢ Increased Bankruptcy Rates †¢ Preys on Poor and Elderly †¢ Lost Productivity †¢ Traffic Congestion †¢ Entry Level Jobs – Low Paying Reality Money not re-spent in Local Economy †¢ No Taxes †¢ Environmental Effects Three essential conditions must be simultaneously satisfied if a particular cost is to be classified as a private cost: 1. G amblers must be fully informed 2. Gamblers must be rational 3. Gamblers must be required to bear the total costs of their gambling If any one of these conditions fails to be satisfied, an element of social costs exists. For example, if gamblers cease work in order to gamble and gamble away their family assets, leaving their families to claim social welfare benefits, the rest of the community is bearing social casts.The gamblers may have mad rational decisions in that they know that the community will provide a safety net. They might have made different decisions had the safety net not existed. One distinction that must be made is between real and pecuniary costs. Real costs represent a withdrawal of resources from other potential uses- they represent a subtraction from society’s total welfare. Pecuniary costs represent costs borne by some members of the community but which are exactly matched by benefits received by others. For example, assume that gambling increases levels o f corruption in the public and private sectors.Corruption can have both pecuniary and real effects. It can produce a redistribution of income, which is a pecuniary effect. It can also produce a real deterioration in efficiency as productive resources are allocated according to sub-optimal, non-economic criteria. Generally speaking, when identifying the real costs, we can classify the costs and benefits on gambling into two categories- tangible and intangible. Tangible costs are costs that can be valued in the marketplace. Any reduction in these costs will yield resources that will become available to the community for consumption or investment purposes.Intangible costs are costs that cannot be readily valued in the marketplace and which, when reduced, will not yield resources to the community for consumption or investment purposes. Examples of both tangible and intangible costs of gambling: Tangible Productionreduced on the job productivity Reduced workforce Reduced unpaid household services Heath and Counselingpsychological treatment of gamblers Treatment of families of gamblers Treatment of victims of crime attributable to gambling CrimePolicing Judicial systems Penal systems Insurance administration Regulationregulation supervision Regulatory programs ResearchEvaluationDevelopment Welfare PreventionCrime prevention Intangible Loss of life Suffering Quality of life Cultural impacts Stress to crime victims Stress to gamblers and others The purpose of this paper is to assess the economic impacts of Casino gambling within a community. The Seneca Indian Tribe opened a temporary casino on its land in Buffalo after federal approval, to satisfy its agreement with the state. The majority of the community are now turning their heads and not showing interest for the casino. They believe the operations will adversely affect the economic and social environment of the already struggling city.The community is looking for other sources of revenue and find out ways how to c lean up the streets. Opportunity cost is any good or service that has value of all the other goods or services that we must give up in order to produce it. We all use the idea of â€Å"opportunity cost† in our everyday lives. The Casino in downtown Buffalo will drain money from the city and local businesses will be affected by the advancements of the casino. The casino is looking to expand to a high class resort that will have room availability and food/beverage.The negative aspect is that the people that enter the casino will not leave to go out to local restaurants or hotels and spend dollars in the all ready weakened Buffalo economy. The casino will provide jobs, the jobs will be at a lower pay and with few, if any, of the protections against displacement. A downtown casino would severely devastate and/or drive out many of Buffalo’s restaurants, hotels and nightlife in the area. Many studies have been performed on Casino gambling and the economic impacts. Many econo mists have researched how the casinos do not contribute to local businesses and negative reputation within communities.Casinos are not helping the economy but only themselves. It is not appropriate for Buffalo to have to struggle anymore due to Seneca Indians and their eagerness to start up something is bound to fail. In New York State our way to protect the environment of nature and humanity. Indian casinos are also exempt from New York health codes, they can permit smoking. Employees in casinos have none of New York’s health protections, and even if they did they can’t sue in New York courts, so they have nowhere to go if they are injured by inhaling second hand smoke.The people buying the tax-free tobacco are not even contributing to the state budget, part of which in part pays for the huge cost of tobacco smoke and leads many to develop lung disease. Questions, discussions, and opinions are on a rise to whether a new casino should be built in Buffalo, New York. If we ask what benefits, or what economic development will this casino bring to the community there would not be enough answers as to compare to the negative effects it will actually bring.This essay will discuss the economic impacts, social and opportunity costs brought by casinos from economist researchers who have showed significant points to why casino worsen the economy and making it harder for local businesses and employment opportunity. To answer the question, â€Å"What is economic development? †Dr. Grinols professor of economics at Baylor University and author of Gambling in America: cost and benefits, 2004 said, â€Å"When individuals undertake productive activity, they engage in the creation of goods and service that provide greater welfare or satisfaction than the inputs used. † (Grinols 2004).Economic development is the creation of greater value by society from its available resources which means greater income and wealth, which lead to greater utility for me mbers of society (Grinols 2004). Dr. Grinols claims when a casino hires a hundred new employees they are equivalent to the same hundred loss jobs at other businesses, and casinos revenues are matched by reduced revenues at those other businesses, which leads to no economic development because greater value is not created. Casinos not only create economic loss, they intensify the problem by taking the money they get from the casinos out of he local communities (Day 2008). The casino industry do not re-spent their profits into the local economy. Statistics show thirty five to eighty seven percent of the profits are sent out of state in the form of vendor contracts, capital investment dividends and parent company profit sharing. The money does not get reinvested into the community, which is the foundation of economic development. In defense to the negative impact brought by casinos, the gambling industry tries to prove that casinos create job opportunity as a measure of economic develo pment; however Dr.Grinols argues that job creation is not an indicator of economic development and that local residents may not benefit at all from job creation. He goes on to say jobs are neither necessary nor sufficient for economic development. Secondly he argued, â€Å"A significant amount of promotional material claims that casinos decrease unemployment,† but most importantly because casinos represent a negative and not a positive economic development, in the long run the number of jobs are drastically decreasing and not created.In 2007 professor Frederic H. Murphy of Temple University proved in his economic impact analysis of expanded gambling in Philadelphia, because money was leaving the area and not staying in the local economy there will be a loss of over four thousand jobs. Dr. Grinols claims â€Å"according to research not sponsored by the casino industry, commercial casinos nationwide generated job loss in more than forty two percent of the counties with casinos .