by Steve Norton
CEO, Norton Management

Talk it out: Have Northeast Ohio's casino and racinos met expectations? | cleveland.com

My comment:

Ohio's big mistake in locating their casinos was in choosing downtown over suburban sites. You only have to look at St. Louis and Kansas City, to see the folly of a downtown location; compared to other casinos in the neighborhoods.

First, downtowns usually have a very small part of a metropolitan area's overall population (Philadelphia has 50,000 persons out of a metro area of over 6 million). Second, traffic congestion always works to the disadvantage of a downtown location, and third, the cost of parking is usually much higher in city center locations.

The biggest advantage of a downtown location, in destinations (excluding resorts, like Las Vegas, Orlando, and Miami), is the number of hotel rooms; primarily rented mid-week, to traveling businessmen, city wide conventions and trade shows; and on weekends to vacation visitors. So cities like New York, Chicago and Washington D.C. with over 100,000 rooms; plus Atlanta and Los Angeles, with over 90,000 accommodations could support a destination casino, with little reliance on the resident population. Those downtown casinos that have proved most successful, like Detroit, have no competition in city neighborhoods or nearby rural areas. So when estimating the tax and revenue potential of a particular city, you might want to consider residential locations in those cities with limited hotel accommodations downtown.