For casinos to remain viable over the long-term, they must engage their surrounding communities positively and work to overcome the negative social impacts of gambling, experts told the New England Gaming Summit.
While Connecticut’s two resort casinos received high praise at last week’s summit for their contributions to the state and support of local communities and their Native American tribes, Mohegan Sun and Foxwoods were called on to increase the countermeasures to their negative impacts on the community, particularly gambling addiction.
“We don’t have planning for the social costs in an effective way,” said Marvin Steinberg, executive director of Connecticut Council on Problem Gaming. “It is the equivalent of lip service.”
A recurring theme of the New England Gaming Summit at Mohegan Sun in Uncasville is the need for casinos to exhibit great corporate responsibility, engage their communities and use their revenues for more than business profits.
When Maine’s harness racing tracks pushed an initiative to install slot machines at their facilities, the focus was the benefits to agriculture and the horse community. After the machines revived the tracks, the facilities’ owners sent checks to all Maine farmers, even those without horses. They also funded the state gaming oversight board to cut down on governments expenses in regulating the industry and built up the smaller horse racing venues throughout the state to keep the industry viable at more than just the racinos.
“Our success is because of our contribution to agriculture and farms and open space,” said Donald Marian, lobbyist for Maine Harness Racing. “Now our horse industry is absolutely unbelievable.”
Foxwoods resort casino in Mashantucket has contributed $3 billion to Connecticut’s general fund, $85 million to charities, $3 million in local property taxes and $7 million in regulatory fees. Mohegan Sun has paid out similar, unspecified amounts, although slightly lower since the casino hasn’t operated as long.
More than the monetary contributions, Mohegan and Foxwoods were praised at the summit for their use of casino revenue to improve the livelihood of the members of the Mohegan and Mashantucket Pequot tribes. Foxwoods, for example, built a community center and a museum dedicated to the history of its tribe.
“The purpose (of the casino) was the community,” said Rodney Butler, chairman of the Mashantucket Pequot Tribal Council, which operates Foxwoods.
Foxwoods’ and Mohegan’s commitment to the community and their tribes is a model for emerging casinos in Massachusetts and New Hampshire, particularly efforts by the Wampanoag tribe to build two Native American casinos in Massachusetts, said Cedric Cromwell, chairman of the Mashpee Wampanoag Tribe.
Before the Mohegan Tribe opened a location in Pennsylvania, the tribe worked with the local community there to help prepare for the coming change. As the tribe wants to expand into Massachusetts, it set up an office in Palmer more than a year ago to get to know the local community. The idea is to make the local community a partner in the casino endeavor, much like southeast Connecticut has become.
“I have seen the skepticism of this region… evaporate,” said Mitchell Grossing Tees, CEO of the Mohegan Tribal Gaming Authority.
When southeast Connecticut lost jobs from the defense manufacturing industry after the Cold War ended, the casinos helped fill the void with high-paying service sector jobs, said Charles Jaskiewicz, chairman of the Norwich Board of Education.
Foxwoods and Mohegan Sun have not had a negative impact on the school system in the region, despite the claims of critics and the results of statewide test scores, Jaskiewicz said, and the region is better off than before the casinos. However, the public safety issues need to be addressed, he said.
When Foxwoods and Mohegan first started contributing a quarter of their slot revenues to the state in the 1990s, more than 75 percent of that revenue was sent back to the local communities as local impact aid to deal with the public safety and educational issues. That percentage of local impact aid dropped considerably and has hovered around 20 percent for the past five years.
When other states open casinos, the gaming operators need to create airtight pacts giving portions of the government contributions to local communities, Jaskiewicz said.
None of the $5 billion Foxwoods and Mohegan have contributed to the state has gone to programs treating gambling addiction. The state runs a program funded by the Connecticut Lottery, even though slot machines are the No. 1 reason for gambling addiction, said Lori Rugle, director of Connecticut Problem Gaming Services.
Gambling addiction impacts 1-2 percent of the population when a large gaming facilities moves in, and that’s a significant number considering Foxwoods and Mohegan’s markets include Boston, New York and Connecticut, consisting of millions of people.
Impacts of addiction include crime, bankruptcy, unpaid taxes, treatment, loss of productivity, mental health issues, unpaid debts, foreclosures, homelessness, divorce and suicide. Although pinning down an exact formula is difficult, the cost of problem gambling in Connecticut is estimated at $299 million, Rugle said.
While addicts make up a small portion of casino customers, they make up between 40-60 percent of gaming revenues because they play so much, said Jim Rubens, chairman of the Granite State Coalition Against Expanded Gambling. A business model built on negative social costs won’t sustain itself over time, he said.
In addition to funding treatment programs, other solutions for the gaming industry include giving players reports on their activity, setting time and monetary limits for gamers, requiring timeouts from gambling, and tracking activity through player cards.
Connecticut State Sen. Andrea Stillman, D-Waterford, said she is working with a contingent of state legislators to gain greater support to treat problem gambling in the region and the state.
“There are downsides to casinos,” Stillman said. “It is not always as easy as it appears on the outside.”
