Philly slots lose hand

Last week, Gov. Ed Rendell lambasted Philadelphia City Council members for delaying the progress of the Foxwoods and SugarHouse casinos, calling them a “City Council with no guts that can be extorted by community groups.” If it were not for Mayor Michael Nutter’s revoking of the SugarHouse building license just prior to this statement, I might have lost all faith in the concept of representative democracy.

It is not only the prerogative of City Council to serve their constituencies, but their duty. In making this statement, Rendell clearly dictated that he would rather immerse himself in the corporate orgy of corrupt pay-to-play politics in Harrisburg than serve the city that granted him his political career.

The good governor would have Philadelphians believe that the construction of these casinos would supply the city with more than 7,000 jobs, increase revenue for the city and state, boost economic and business activity, and increase real estate and residential property values.

However, the introduction of casinos into the city would divert so much business from smaller surrounding businesses, that the loss of jobs would actually exceed the initial gain.

“Instead of spending their money on existing recreation, restaurants and historical tourism, people simply shift their money to the casinos and no new spending is generated,” said Fred Murphy, a Temple professor of management sciences who has done substantial research on the topic.

It is nearly impossible for small businesses to compete with free booze, entertainment and slots. For every casino job gained, nearly three jobs are lost due to the forced relocation of smaller businesses and increased taxes and crime, according to a study conducted by John Kindt, a professor of business administration at the University of Illinois.
Moreover, the jobs that those 7,000 Philadelphians need “so desperately” — valet and janitorial services and kitchen work — will pay minimum wage and will not be enough to lift the 25 percent of Philadelphians who are beneath the poverty line. Foxwoods Casino admits that the average wage for these jobs will be about $20,000.

This is not the first time we have heard this rhetoric. Atlantic City often serves as a paradigm to compare the potential effects that gambling could have on a host community. According to research compiled by Casino-Free Philadelphia, a community-based activist group, the number of restaurants in Atlantic City dropped from 48 the year casinos opened to 16 in 1997. Within just four years, one-third of the city’s retail businesses had shut down. Casino gambling fostered the rising crime rate as well.

Foxwoods Casino released a report in 2006 that states, perhaps correctly, that the city stands to make $41.8 million in wage, sales and real estate tax. This report, however, does not take into account the resultant social costs that casinos will have on the city such as crime, business and employment costs, bankruptcy, social service costs and suicide. According to Murphy’s research, these social costs will run the city and state more than $285 million, not including the tax losses from local businesses that lose revenue and profits.

So to our new mayor, the gutless City Council members and the community extortionists who are able to see that the odds are stacked against us, thank you. This is one gamble that Philadelphians are sensible enough to walk away from.

Sam Benesby can be reached at  samuel.benesby@temple.edu.