Contributors
Carol A. Mumford: Casino the worst business deal for R.I.
01:00 AM EDT on Friday, September 29, 2006
Shakespeare spoke for Rhode Island when he heralded the approach of Macbeth with the warning "Something wicked this way comes" (IV,i,47). Macbeth may be long gone, but Harrah's casino looms dark and heavy on our horizon.
Some may interpret this statement to mean that I oppose casino gambling, but in reality, I do not.
Before my appointment to the 2002-03 Special House Commission to Study Gaming, I did think that a major percentage of those who frequent gambling parlors were destined to become addicts. Although "problem gambling affects a small but significant proportion of the general population and results in a long list of individual and social dysfunctions" (Volberg, 2001), the majority of people who gamble do so as innocent recreation.
Since we do not ban liquor and we do not ban long-distance running, even though both have been found to be addictive in small segments of the population, it would be unwise to outlaw gaming on this premise. We already have Lincoln Park and Newport Grand, and I certainly do not oppose their existence.
Does my opposition stem from a belief that the Narragansett Indians should not participate in the gaming industry? No. In fact, Chief Sachem Matthew Thomas and Randy Noka attended almost every meeting of the yearlong gaming commission, and during that time I came to believe that they were two of the finest gentlemen -- with the emphasis on gentlemen -- who had ever pressed a cause with the General Assembly.
Why, then, is the constitutional amendment to allow Harrah's a no-bid contract such a wicked proposal?
After eight years on the House Finance Committee and more than 22 meetings of the Special House Commission to Study Gaming, I can unequivocally state that this prearrangement would be the worst business deal possible for the taxpayers of the State of Rhode Island.
We would be embarking on an uncharted voyage, with the only certainty being that we would lose money. Never mind that the deal would be a no-bid contract; never mind that we do not know the particulars of whatever contract may or may not have been signed; never mind that the proposal is being touted as property-tax relief, when no such relief is possible; the business deal stinks.
Why no property-tax relief? We would be killing the proverbial golden goose, or, in this case, geese. We already have two low-profile state-run gaming establishments, which pay the taxpayers of the State of Rhode Island an approximate 60-percent tax rate. I have no connection with these two establishments and cannot remember ever visiting either one, but when the Finance Committee reviews state revenue each fiscal year, gaming is our third-largest source of revenue. These two under-the-horizon gaming firms do not give out loyalty points; do not operate clothing boutiques, or world-class restaurants that compete with our restaurant industry; are not open 24 hours a day; and certainly have not posed a threat to the Providence Performing Arts Center, the Ryan Center, the Rhode Island Convention Center, or the Dunkin' Donuts Civic Center.
What business person would exchange a 60-percent take, with little or no collateral impact, for a purported 25-percent take that would threaten the very fabric of the restaurant, entertainment and clothing industry in Rhode Island? That we have come this far already boggles the mind.
Forget about increased traffic on Route 95. Just ask Ledyard, Conn., about its 400-percent traffic increase. Forget about increased town and state services; forget about the impact on the economically profitable private higher-education industry in Rhode Island.
Do remember that "[i]n Las Vegas Strip casinos, for example, revenues generated from food and beverage, hotel, entertainment and other ancillary components are now 52 percent of total facility revenues, surpassing that from gambling" (Report of the Rhode Island Special House Commission to Study Gaming, p. 29).
The only conclusion for me to draw is that Harrah's would like to repeat its Las Vegas success here. Success would be to have one-stop shopping: You could eat in a world-class restaurant; shop in boutiques with deeply discounted prices; see a first-class show; and gamble -- all in the same visit. With the glitz and first-class marketing approach, why would we visit Federal Hill or Knightsville or Newport to dine? Why would we visit PPAC for shows that would no longer book there? Why would we shop at the malls? You could have all this and gambling, too. Our tourist industry could implode, unless it were dedicated to one casino with a 25-percent (?) tax rate.
Have I mentioned "slippage"?
First, Harrah's said that we could earn $145 million from its casino. We already collect at least $245 million from Lincoln and Newport, with the current take estimated to approach $300 million. Did you know that last fiscal year Foxwoods -- purported to be the largest casino in the world -- gave Connecticut only $205 million? Yes, that's right: Foxwoods gave Connecticut less than Lincoln and Newport give to the taxpayers of Rhode Island.
A destination resort casino would take little time killing Lincoln Park and Newport Grand, so "slippage" would be born: When the inevitable happened and Harrah's killed these establishments, we, the taxpayers of Rhode Island, would make them whole. Yes, that's right: Under a deal between the state and Lincoln and Newport, when profits decreased, the taxpayers would make up the difference.
Let's recap: The $145 million from Harrah's would quickly kill the approximately $300 million we receive this year and in future years, but taxpayers would make up the difference? In a scenario that is almost comical, we would exchange $300 million for $145 million, but still owe money to the dead gambling halls, because we would have to make up the difference?
How far a stretch is it that we lose money in this strange, silent deal? The $300 million disappears and we are millions in the hole. Never mind that the detailed governance and regulatory structures that were proposed by the Special House Commission have been ignored; never mind that the State Police have been completely left out of the equation; never mind that resulting problem-gambling issues have not been addressed; never mind that fiscal-impact studies have not been made; never mind that enabling legislation has not been introduced to create a regulatory body with a stipulated number of members and duties; in fact, never mind.
Oh, yes, and property-tax relief: Just ask taxpayers in Connecticut how relieved they feel. Last time I looked, Connecticut was second highest in the nation in per-capita state and local property taxes! (The Taxpayers Network, 2005 edition)
Shakespeare was right. "Something wicked this ways comes."
Carol A. Mumford, representing Scituate and Cranston, is senior deputy minority leader in the Rhode Island House of Representatives.
| Sweetbriar provides opportunities for Tara Dodson and her daughter Avery | |
| Police seize large quantity of marijuana in Woonsocket | |
| H1N1: Pregnant women struggle to find flu vaccine source |
We want to hear from you
More editorials
Most Viewed Yesterday
Patriots journal: Porter says refs have different rules for Brady
Governor vetoes R.I. saltwater fishing license
Narragansett sachem: ‘Outsiders’ no more after Obama meeting
Most active surveys
What's your favorite breakfast/lunch place?
Will you get vaccinated against swine flu this year?
Will you allow your children to be vaccinated against swine flu? Why or why not?
Most e-mailed in the last 24 hours
Reader Reaction









You must be logged in to contribute. Log in | Register Now!
You are logged in as screenname | Log Out
You are logged in, but do not have a "screen" name. Create a Screen Name