Toronto is contemplating a Casino. A recent report says there is a lot of money to be made and the city should not pass on the chance to play host to Ontario's newest gaming house. The economic benefits are clear, construction jobs and then permanent ones; one time payments to the City and then ongoing tax revenue. The report also contained the figure of .2%, this is the number of expected problem gamblers. It was also noted that if the casino goes to somewhere else in the GTA Toronto will get fewer of the benefits but still deal with most of the problems associated with a Casino, addiction, entertainment competition. The conclusion is couched in the form of , "a casino is coming, it's better to be part of it."
I'm not a fan of Casino development. Gambling as entertainment is just a little more rational than burning money for heat. I understand that the development will include Rooms; shows; perhaps more convention space and restaurants. People go to Casinos for the Gambling. They take in a show; use a room or eat at a restaurant, but gaming is the central attraction.
Casino development brings increased incidences of gambling addiction, and perhaps a minor spike in crime. These are small and can be dealt with by diverting a portion of casino revenue to bulk up programs dealing with addiction and crime prevention. I'm not attempting to minimize the devastating effect of gambling addiction but it's effect is personal and with treatment addressable.
My interest is in the economic side of Casino development. Casino's are service providing industries. They don't make anything. They don't, like a clothing manufacturer turning cloth into suits, adding value. Like the retail outlet providing a space to sell the new suits; once again adding value; creating wealth. A casino is like Spa or Salon a service is provided that transfers wealth from the customer but does not create any.
Casinos are wealth redistribution devices, they take your money on the promise of a chance to win more than you spend. It's not an even circumstance, the Casino always comes out ahead because the gaming odds are in the theirs favour. People do gamble for fun; for the chance to be the exception to the rule and hit the 1/350000 chance and walk out of the Casino a winner. Most people go, lose a couple of hundred and walk out wishing they had won but also feeling they had a good time.
That is the larger problem. Casinos are large gravity wells only they attract money instead of matter and lots of it, concentrating it in one place. Ideally money spent in a Casino is disposable income, as opposed to your rent money. This is income you might have placed in a savings account; spent at a retail outlet; Salon; given to charity; a homeless person you walk by on your way to work. The are many and diverse ways to use disposable income. We generally spread it around and in doing so support many wealth creating businesses as well as smaller wealth redistribution enterprises; and of course the employment of many of our fellow citizens. The impact on local business depends on how much wealth redistribution comes from local sources. If the majority of Casino revenue comes from outside Toronto locals business the harm is reduced and if the tourists spend money outside the casino, may in fact benefit. Though if you widen then scope, money spent by a tourist couple in a Toronto Casino, isn't spent locally on goods and services in there home town, the effect is the same, just removed from Toronto. One report I have read suggests the majority of Casino patrons are local, within 50 miles, exceptions are Border Casinos. The fact that there are 6 million people within 50 miles of Toronto may appear to lesson the impact. For a city like Kenora, for whom the report was authored, local participation in gambling is a major concern.
Whether you are diverting spending from local businesses or the hometowns of tourists the problem remains. Wealth is concentrated at Casinos at the expense of other outlets. The outcome will be reduced revenues at these businesses possible reduction in employment or closings. If such is the case, employment after the construction phase would be eventually out, with little net gains. This effect would also carry into the revenue side, not the property tax or hosting revenue but income tax or expected rise in taxes from businesses. These would no doubt reach an equilibrium if not on a local level then at least on a GTA or Provincial one.
Casinos bring benefits and headaches. Plenty of deliberation and debate should go into the decision to host such an enterprise. Our elected representatives must look past the revenues, hard in these cash strapped, anti tax times; and truly investigate the whether a Casino is the cure to what ills. They are a mixed blessing at best, at worst, they create more problems than they are meant to relieve.
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