Say Yes to New Hampshire. Say NO to Casinos.
2- Casinos Cannibalize Existing Business
Economic Damage
2. A Casino monopoly would cannibalize existing NH businesses.
Because it would depend primarily upon New Hampshire residents for revenue, a convenience casino here would displace consumer spending from existing, local New Hampshire businesses, such as restaurants, hotels, conference centers, entertainment venues, and retailers ranging from auto dealers to food and clothing stores.
Midrange estimates of this displacement, or cannibalization effect, are 50-60 percent. This means that a single border-casino generating $75 million in annual taxes (at the proposed 25% tax rate on slots gross win) would drain at least $200 million in annual revenues from existing New Hampshire businesses, most locally owned and operated.
New Hampshire casinos would subject thousands of existing New Hampshire businesses to an unfair and anti-competitive disadvantage.
Here’s how. Casinos throughout the U.S. always use monopoly slots profits to “comp” (discount below cost or give away for free) rooms, meals, drinks, entertainment, and other amenities. Using standard casino comp/gross profit ratios (2011 Atlantic City data), a single Salem casino would comp at least $100 million in these amenities annually.
Local businesses recycle revenues and profits back into the local economy to a greater extent than would an out-of-state company proposing a casino here. The local businesses harmed by this unfair competition from casino monopolies are often integral parts of our local community life.
Casino cannibalization also kills existing New Hampshire jobs. The New Hampshire Gaming Study Commission, 2010, (see page GSC 70), found that a North Country casino would wipe out 7 existing local/regional jobs for each 10 casino jobs.
Experts on casino cannibalization have stated:
- A Federal Reserve Bank of Boston cannibalization study found that, “Casinos that cater to a local market generally do not bring outside money into the economy through the spending of its patrons … Residents patronizing such casinos may simply substitute gambling for other goods and services.”
- Manchester business leader Steve Talarico commenting on a potential Salem casino: “It’s going to suck all the business out of Manchester.”
- Ledyard, Connecticut’s Mayor, “There has been no economic development spin-off from the [Foxwoods] casino … Gamblers have one thing in mind: get to the casino, win or lose their money, get in their cars, and go home.”
- Donald Trump: “People will spend a tremendous amount of money in casinos, money that they would normally spend on buying a refrigerator or a new car. Local businesses lose customer dollars to casinos.”
Steve Wynn, addressing Bridgeport, Connecticut business leaders, “There is no reason on earth for any of you to expect for more than a second that just because there are people here, they’re going to run into your restaurants and stores just because we build this [casino] here.