Indeed, thus far, the new racino seems wildly profitable, so much so that Gov. Cuomo sees it as just the beginning of the development of new gambling and entertainment opportunities at Aqueduct.
In other areas of the country where full-scale gambling has been considered, a battle has broken out over benefits versus cost. If that same fight is taken up here, attention is likely to focus less on whether social costs of gambling exist than whether the positive financial impact of gambling outweighs those social concerns.
And in that contest, casino opponents may face prospects no better than the average gambler who visits the quasi-casino that already exists in Queens.
Revenues high and growing
The benefits of gambling to New York are obvious and easy to quantify. All the numbers and statistics making headlines at the moment point to the Racino being a boon for all New Yorkers. Despite not opening until the tail end of October, the Aqueduct Racino brought in $90 million in revenues for the state in 2011, most of which went toward education. And according to Stefan Friedman, managing director at consulting firm SKDKnickerbocker, which represents Genting, the revenues are expected to remain impressive even after the Racino's "novelty factor" wears off; Genting expects to bring in $300 million to $400 million for the state each year, not including the profits they'll keep for themselves.
Perhaps even more powerful are the estimates of what New York is missing by restricting what its gaming facilities can offer. Friedman says $3 billion to $5 billion in entertainment spending leaves New York each year, bound for full casinos (which unlike Racinos have live dealers and table games) elsewhere.
"Gaming is here," he says. "There are dollars going out of state right now, and look, we love our friends in New Jersey and Connecticut, but we don't love them that much to be giving away revenues to them at a time when frankly, every year, there are budget deficits. Every year, we've been seeing stagnant employment."
So it's no wonder Cuomo, at the helm of a state that's still very strapped for cash, has hopped on the casino bandwagon: It looks like free money for the state that doesn't involve raising taxes, it creates lucrative business for the private sector and, maybe the most important concern in this economy, it appears to be a great source for job creation. Still, some say there is more to the picture.
"Typically, [upon the opening of a new casino] the economic studies find a boost in local revenues as well as business, an increase in a number of jobs and a bunch of things like that. The other side of the coin is harder to measure," says David Just, associate professor of economics at Cornell, referring to the social costs that often accompany casinos. "That's why it's really hard to argue against these things."
Tall order for opponents
The success of Aqueduct and the estimates of foregone revenue mean anti-gambling groups such as the Coalition Against Gambling New York (CAGNY) and Stop Predatory Gambling face some major hurdles in convincing the public that casinos are not worth the social costs.
"Over the long-term, no one wins in a casino," says Charlotte Wellins of CAGNY. "Our government is pushing an addictive product, pure and simple… What if our government started pushing drugs like they're pushing gambling? You know, if they were going to push prostitution, that would bring in revenue too. But will it improve the quality of life of our citizens?"
Beyond the moral concerns raised by gambling, Wellins argues that the job creation and perceived economic benefits of running casinos are overblown.
"Many casinos, if you look at Atlantic City, many of them hire part-time employees so they don't have to pay benefits to them," she said. "They're low-paying jobs to begin with and they produce nothing. How can that help our economy? There's nothing produced in a casino."
Dan Hajdo of Casino-Free Philadelphia also speaks strongly against the supposed benefits that are meant to come from opening casinos, saying the "social costs, in economic terms, outweigh any political revenue."
Hajdo points to a number of reports and studies that document the addictive nature of casino gambling and the ruinous effects it has on the lives of addicted gamblers and their loved ones. One of these is the 2007 Pennsylvania Intergovernmental Co-operative Authority Staff Report, which estimates the yearly social costs per pathological gambler ranges from $15,000 to $33,500. According to Just, the prevalence of pathological gambling increases among locals when a casino opens up.
Before a casino opens, Just says, a person who has lost a job or suffered some other blow might need a few days to regain their bearings and then go out and start looking for work or looking for some way to solve the problem. A casino can interfere with that cooling-off period, Just says. "What tends to happen when you have the casinos right down the street is, in that period when you're trying to get your head together, you're out gambling because you see that as a way out; you see that as a way to quickly make back this money that you lost. Bankruptcy rates increase noticeably – something along the lines of 6 percent."
Impact on the poor
The 1999 National Gambling Impact Study Commission found that compulsive gambling rates double in areas within 50 miles of a gambling facility.
But accepted forms of state-sponsored gambling in New York, like lottery jackpots and scratch-off tickets, can also eventually lead to gambling addiction. What's more, those games—more than casino gambling—disproportionately attract low-income people.
Contrary to one anti-casino myth, the majority of casino gamblers are not poor—that would be a risky revenue model for gaming companies—but low-income people are more likely to gamble than more affluent Americans.