THE BACK PAGE: Government, for better or worse
by Charles Anderer
October 1, 2009
The global economic downturn has led many in gaming to refocus the bulk of their attention on the place where the industry’s 20-year-old boom started: the United States. And the news is mostly encouraging.
The fiscal plight of state governments in many parts of the country is driving growth, both in existing and potentially new jurisdictions. Older Americans, who remain the core casino customer, have been among the least-affected by the economic downturn. They are less in debt than younger generations and enjoy the relative stability of a government check every month and access to low-cost health care to supplement their own savings and income. The economy, for its part, looks to have found its bottom, even if the best it will be able to muster over the next year or two is a jobless recovery as businesses and individuals continue the achingly slow process of deleveraging and rebuilding financial health.
Things are fluid in the Land of the Free, where near-term pragmatism is what really drives the culture, not the endless bleatings about government and creeping socialism, talk radio jocks and political extremists of all stripes. No matter who is in charge of the federal government, one-third or other of the country professes a deep sense of anger, often bordering on hysteria. Business, of course, always keeps its eye on the money ball. The gaming industry is well-positioned to catch any number of breaks in the coming years as state governments cope with record-setting deficits and a growing set of burdens and the public sector, beset by falling revenues, gets drawn into cleaning up America’s housing, health care and (next up) college education bubbles.
Witness the complete flip-flop of longtime gambling foe Gov. Ted Strickland of Ohio, who is now helping to drive voters to approve a statewide ballot initiative on casinos this November. The issue, as always, is to keep the tax burden as low as possible, and Ohioans have, so far at least, followed their governor down the pro-gaming path. Some 58 percent surveyed by Quinnipiac University last month approve of the governor’s plan to authorize casinos in Cleveland, Cincinnati, Columbus and Toledo. Some six in 10 of those same Ohioans also back Strickland’s plan to add video lottery gaming at seven racetracks, and a general question on legalizing gambling had a 56 percent-to-37 percent pro-industry response. For a brief period of time Strickland even supported setting the legal gambling age at 18. Strickland gone wild! (He wisely backed off of that and moved it to 21.)
Meantime, the tortured relationship between Americans and government is very much in the news with the country’s often over-the-top and embarrassing health care debate. About 100 million Americans already receive government-sponsored health care through Medicaid, Medicare, the Veterans Administration and other public programs. Many of these folks, it should be noted, are the casino industry’s best customers. Nice, isn’t it, that so many of your slot players have their health-care payments processed by a government-run body with 4 percent overhead that doesn’t end coverage willy-nilly for pre-existing conditions or make them play Let’s Make a Deal for their prescription drug coverage? At least not to the extent of private insurers, with their 30 percent overheads and shareholder demands for return on capital, which can lead to all sorts of bad outcomes for the insured, many of whom, at the end of the day, have less money to spend (and wager) as a result. Even the English, the one group of people on Earth who have a spot in their heart for our spirit of cowboy capitalism, would stage a nationwide revolt if compelled to organize health care the American way.
The truth is that key aspects of big government in America are already good for the gaming business. If there’s a risk to the industry right now it may be that governments will be too cooperative and too much supply will hit the market at a time when the economy is still in the process of rebounding. Louisiana, for instance, is feeling the effects of the gaming boom in Oklahoma. The two states are fighting for business in Texas, and there’s only so much to go around, which explains much of the 10 percent drop in gaming revenue in Louisiana in August. And, of course, there is Las Vegas, where 13,000 new high-end hotel rooms are scheduled to hit the market in the next year or so.
When there’s no referee, sometimes the game gets out of control.
is executive editor of BNP Media Gaming Group and also oversees content development, sales and marketing for the company’s trade shows and conferences, which include Bingo World, Southern Gaming Summit, Gaming Technology Summit, New York Gaming Summit and Casino Marketing. He can be contacted at firstname.lastname@example.org.
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