by Steve Norton
CEO, Norton Management

Casino gaming would pump funds into Hope Scholarship | WRBL

My comment;

Casino gaming is not new to Georgia. As a child, I remember slot machines being offered at the Faryland Club, on Lookout Mountain, GA; where my Father was the Manager. And nearby was the Lookout Mountain Hotel with a full casino.

In a study's by an anti gaming group, representing downtown Atlanta interests; one key prediction is that most of the Atlanta casino revenue will come from locals. A quick look at Las Vegas, which has a total win of over $7 billion, over 80% comes from visitors, and the number of casino rooms available, dealing with the tourist/ convention market on the Strip and Downtown Atlanta is only about 10% more in Vegas. Clearly not all of Atlanta's 94,0000 hotel rooms are not all downtown, considering the Hartsfield is the World's busiest airport. I would not expect Atlanta with one or two casino serving the Atlanta market would generate the kinds of casino revenue as the LV Strip (over $6 billion); but I would not be surprised to see a single casino in downtown Atlanta generating over a $billion annually, primarily from visitors. A neighborhood casino, or racetrack with slots, would primarily serve the local population, avoiding downtown traffic and costly parking fees.

This study refers to the reduced win at the Harrah's New Orleans casino; but they failed to mention the competition from nearby Louisiana riverboat casinos and land based gaming in Mississippi; or the recent cigarette ban at the New Orleans casino. There is also no mention of the prohibitive minimum casino tax in New Orleans; that was originally proposed by me, 40 years ago, in a study prepared for the State of Louisiana. It was based on a monopoly casino in New Orleans, with US competition only coming from Nevada and the soon to open casinos in Atlantic City.

This study concentrates on displacement revenues, but fails to mention the payroll and spending by the thousands of new casino employees, that will be dining and shopping in those communities lucky enough to obtain a casino license. Plus it overlooks the revenues generated by millions of new visitors, or the return of GA resident spending at casinos in Alabama, Florida, Mississippi, North Carolina or Nevada, where over 90 flights a day leave Atlanta's Hartsfield for Las Vegas.

With only 4 to 6 casinos, the GA Lottery will likely suffer no adverse impacts. When helping the MA Senate on their earlier efforts to pass casino and racino Legislation, I prepared a study on State Lotteries, where new gaming had been introduced. In major states like California and New Jersey, lotteries grew in revenue, along with the casinos. Only in Louisiana and Iowa, were lottery revenues negatively impacted; primarily a result of the amount of new competition approved. In Louisiana, 15 riverboat casinos were spread around the State, with 3 Tribal casinos, 3 racetracks with slots; plus slots allowed at bars and truck stops, Statewide. Iowa also has 20 casinos on riverboats,Tribal operations and racetracks with casino games. And Iowa has less than 1/3 of the Georgia population.

The study mentions the negatives of crime, compulsive gambling, bankruptcies, impacts on neighborhoods; all items to consider. But crime increases will depend on how many new visitors are attracted by the casinos. In studying the FBI Statistics on Violent and Property Crime; the resort communities in Florida, including Tampa, Miami and Orlando (the US' top family destination), all had higher Violent and Property Crime rates, than Las Vegas. But crime stats are misleading as they compare total crime to an areas permanent population; totally disregarding the millions of visitors. In fact, even though Atlantic City's crime rates (based on the 40,000 residents) tripled, (primarily petty crime); a residents chance of being a victim declined by over 60%; as those at risk included 35 million visitors and another 60,000 plus employees that commuted from other South Jersey communities.

And when opponents discuss the increases in compulsive gambling, which is a true negative; they forget to mention that state Lotteries typically earn their highest per capita spending from their states lowest income neighborhoods.The communities mentioned as receiving most of their casino revenue from residents, have more casino locations, that proposed in Georgia, and far fewer hotel rooms that Atlanta, providing an estimated 30 to 40 million guest nights annually, spent by visitors, traveling businessmen and attendees and exhibitors to city wide conventions and trade shows..

Casino proponents, like MGM, need to hire an independent firm, to provide a more realistic view of gaming's probable impacts on Atlanta and other communities, before State voters are asked for thier approval.

Georgia to vote on casino bill - Focus Gaming News

My previous comments:

Recent article indicates support for limited gaming in Georgia; as long as it provides meaningful tax revenue to the Hope Scholarship and other programs. Representative Ed Sellers considers casino gaming a "gimmick" that other states have tried, without positive results. Senator Lindsay Tipping's refers to Atlantic City's experiment as failed. But in response to the negatives; I am very familiar with the Atlantic City experiment; having provided an impact statement for the successful 1976 casino referendum, and assisting the Legislature draft the Casino Control Act. And in 1978, helping to open the first legal US casino, outside the State of Nevada. Our positive experiences have lasted for nearly 40 years, including a quarter century as a monopoly in Philadelphia, New York City and New Jersey. We providing over 50,000 casino industry jobs, with many more in support businesses; over $10 billion in new construction, plus $10 billion in programs for NJ Seniors and the disabled. And the majority of the customer support and spending came from residents of other states, than New Jersey. Today, with new competition in Eastern Pennsylvania, New York City, Maryland and Delaware, AC's casino win has been halved; but that is still over $2 billion annually.

Naturally AC experienced negatives, like an increase in crime, traffic congestion and compulsive gambling. But the crime increase was much lower than the increase in visitors; with residents much less likely to be a crime victim. And we have seen from resorts in Florida, including Tampa, Miami and Orlando, the World's top family resort; that all have higher FBI violent and property crime rates that America's top casino destination, Las Vegas.

And if Georgia is concerned about compulsive gambling, then take a good look at which communities have the highest per capita spending at the GA Lottery. If it's anything like the US's most successful Lottery, Massachusetts, it will likely be in the lower income neighborhoods. And it reminds me of an Illinois Lottery billboard, in certain Chicago communities; "Your Ticket Out". Guess which neighborhoods included these billboards?

Casino traffic, is a concern, but is less of a problem that going and coming from a major sporting event or concert; as customers come all 24 hours, but avoid daytime drive times; and preferring visiting the casino and its entertainment on weekends and evenings.

Senator Beach's proposal make a lot of sense for Georgia, because it could produce the needed funds, from a voluntary tax; that would keep the Hope Scholarship Program solvent in the future. Georgia, with its own support population, and a proposed limit on the number and type of new gaming; would bring back much revenue from GA players now going to casinos in Florida, Alabama, North Carolina, Biloxi or Las Vegas. In fact there are 93 flights a day from Hartsfeld International just to Las Vegas, about 5 million available seats; although many are from other Southern states, using Atlanta as a hub.

And the worry, that casinos will harm the GA Lottery, are certainly misplaced. When I was helping the Massachusetts' Senate with their casino and racino Legislation (2001-04); I prepared a study on state Lotteries, after the introduction of casinos, slot parlors or race tracks with slots; and found only two cases where Lottery sales declined; and they were not in New Jersey, California or other large states; but only in Louisiana and Iowa. Iowa has 20 casinos, on riverboats, Tribal casinos and racetracks, with a population of just over 3 million. Louisiana has 15 riverboat casinos, 3 Tribal casinos and slots at 3 racetracks, plus up to 5 slots in bars and 25 slots at truck stops, to serve a population of less than 5 million. Georgia has over 10 million residents, and its major Atlanta casino would primarily serve business travelers, convention/trade show attendees and visitors, staying at the 94,000 accommodations in Atlanta.

Both MGM Resorts International, Wynn Resorts, Hard Rock and the LV Sands; would be the largest gaming companies capable of such a development in Greater Atlanta. They would most likely build the kind of facilities that would house and promote larger convention/trade show events, and improve occupancies and average rates of Atlanta's existing accommodations. Other areas in the State, Augusta, Savannah, Columbus and several Atlanta suburbs have surrounding area populations, that exceed a half million, and could support some version of a casino or race track; with slots/and or table games and attract neighboring state population; like, Jacksonville, FL; Montgomery, AL; and Southern South Carolina.

Since the Strip in Las Vegas has promoted the trade show and convention trades; their occupancies and average room rates (at the 23 largest resorts) have reached 92.1% and $163 (year end 6/30/2016); to a point where non gaming sales produce 65% of total property revenues, and the non casino departments produce 73% of the operating profits. With just a single casino in downtown Atlanta, the casino would produce probably 70% to 75% of the resort revenues; but most of this gaming income would be provided by guests staying at Atlanta's existing hotels.

There are many ways that Georgia can introduce different forms of gaming, depending on what is most important to achieve. I call it the style of gaming, and it can include destination casino resorts; slots at racetracks, riverboat casinos, cruises offshore, slots in bars, Internet Cafes, Online Gaming, Fantasy Sports and other new gaming options currently being discussed. The primary benefits offered by different forms of gaming, include jobs, taxes, construction and tourism; and depending on which are most important, will lead to successful implementation. And the best style and tax treatment, could be very different for Downtown,Atlanta, the Atlanta suburbs, Savannah, Columbus, Augusta, or other possible locations in the State. A 2/3rd majority in the Legislature is a high hurdle, but the Hope Scholarships are badly in need of a new source of funding; and casino taxes are a rare form of voluntary tax.