Sat04192014

Opinion

Is gambling an OK tool for making economic development ‘luck’

Gambling is legally restricted in the United States, but its availability and participation is increasing.

 
 William Reed

Gambling is legally restricted in the United States, but its availability and participation is increasing. Under federal law, gambling is legal and each state is free to regulate or prohibit it. Almost every state allows some form of gambling. African Americans have little impact in gaming, except as employees.

As African Americans lag, the gambling industry continues to prosper. In 2011, gambling activities generated estimated revenues of $92.27 billion as follows: card rooms – $1.18 billion; commercial casinos – $34.41 billion; charitable games and bingo – $2.22 billion; Indian casinos – $26.02 billion; legal bookmaking – $168.8 million; lotteries – $24.78 billion; pari-mutuel wagering – $3.50 billion.

Commercial casinos provided 354,000 jobs, and state and local tax revenues of $5.2 billion. Nevada is the only state where casino-style gambling is legal statewide. Both state and local governments impose licensing and zoning restrictions. All other states that allow casino-style gambling restrict it to small geographic areas (e.g., Atlantic City, N.J. or Tunica, Miss.,) or to Native American reservations. As sovereign nations, Native American tribes have used legal protection to open casinos. There are 19 states (and two U.S. Territories) that allow commercial casinos in some form.

The economic impact of legalized gambling is tangible and quantifiable. They include construction of casinos that lead to many jobs for construction employees, employees to staff the casino, and the suppliers for ongoing casino operations, and multiplier effects that ripple throughout the overall economy.

The reality is, nearly one in four American men and 1 in 8 women gambled on the recent Super Bowl in some way. Furthermore two-thirds of all Americans have gambled, and some 80 percent of us approve of legal gambling as a means of collecting taxes.

Entrepreneurship in gambling and gaming has traditionally been eschewed by African Americans. More often than not, the image of an attractive man or woman holding a drink in one hand and dice or cards in the other is an African-American taboo. But, it was labeled “race progress” in 1955 when the integrated Moulin Rouge Hotel-Casino Resort opened in the Westside of Las Vegas. The resort had partial ownership by boxer Joe Lewis and was built to accommodate African Americans banned from Strip resorts. The integrated hotel-casino site afforded African Americans work and more well-paying jobs such as managing and dealing.

Not until Don Barden became the owner of the Majestic Star and Fitzgeralds Casino did an African American have an ownership presence on Las Vegas’ legendary Strip. In 2003, Black Enterprise Magazine rated Barden one of the nation’s top African-American businessmen and one of the top African-American employers in the nation – with more than 4,050 employees.

Over four decades, the late entrepreneur became a self-made multi-millionaire in real estate, the cable TV industry, and in later years, a dominant force in casino gambling. Barden’s influence in gambling came against the odds. After success in politics, real estate and cable, Barden joined forces with powerful Blacks attuned to gambling. In 1998, he and Michael Jackson submitted a proposal for an amusement park along the downtown Detroit Riverfront called The Thriller Theme Park. That project was rejected. In 2006, Barden tried again for a license to build a new casino, this time in Pittsburgh with Smokey Robinson. He got the license, but not the casino. Before he died in 2011, Barden had casino operations across America.

But the debate continues about whether or not gambling is an appropriate economic development tool. The argument against it is that although the numbers of jobs associated with new gambling facilities is significant, for some it is not a compelling enough reason for its legalization. Detroit’s casino gambling has led to no noticeable downtown redevelopment.

Still, African-American political, civic and church leaders have to admit that gambling can be a powerful economic development tool. Las Vegas is a powerful testament to impressive job growth, a low tax burden that many state and local governments envy and prosperity levels that have spawned significant private and public sector investments.

(William Reed heads the Business Exchange Network.)

 

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