JUNE 8 DECISION WILL IMPACT US FOR A LONG TIME

Peter Gordon is professor of marketing at Southeast Missouri State University.

Over the past few weeks there has been a lot of discussion of the riverboat casino issue that is facing Cape Girardeau voters next month. In the following paragraphs, I have tried to present some verifiable facts about riverboat casinos. I neither advocate a yes or no vote, but think it is important that voters at least are able to separate facts from fiction.

FACT 1: A r~~~~~~~~~~~~~~~~~~~~~~~~~~~~~iverboat casino in Cape Girardeau would generate tax revenue for the City and the State. How much? Metropolis, Ill. is possibly the best barometer of potential tax revenue. Monthly revenue to the city exceeds $300,000. This figure needs to be adjusted downward due to differences in the revenue formula in force under Illinois law. A reasonable estimate for a similar operation in Cape Girardeau would be over $200,000 per month, or about $2.5 million a year.

Several other factors need to be considered, such as legislative differences between Illinois and Missouri gaming statutes, overlapping trade areas and competition. These factors could reduce the potential tax revenue by as much as 20 percent. This would still leave about $2 million a year in local tax revenues. Plus the State's portion would make a useful contribution to the State's coffers. The estimate of about $2 million in local tax revenue is probably a fairly realistic estimate, however.

FACT 2: The casino will also generate jobs. A casino would create jobs for several hundred local workers. Jobs, of course, generate more local expenditures, thus would stimulate the local economy. The visitors to town would likely spend time in various other parts of Cape Girardeau, spending money in restaurants, motels and all kinds of retail stores. The most direct beneficiaries would be downtown merchants, but retailers in most parts of Cape Girardeau would see increased business. There would be advances in downtown redevelopment. Retailers in Paducah, Ky., have seen an increase in traffic since the casino opened in nearby Metropolis. It has been reported that as many as 1,300 new jobs (many part-time) have been created, directly and indirectly, in Metropolis and Paducah areas as a result of the casino.

FACT 3: Additional capital investment is also likely. A recent announcement from Metropolis indicates a 120-room hotel is likely to be build. One investor group has already committed to build a multi-million dollar facility in downtown Cape Girardeau. Capital expenditures further stimulate the economy.

FACT 4: Like any activity that increases the number of people who come to town, there will be some increase in crime rates. There are no statistics that would indicate that the increase in crime would be any more than that generated by a like number of people coming to town to attend the County Fair, a rodeo or a concert. More people means more crime, but not to any disproportionate level. There is also no evidence to suggest that organized crime will enter the area. This simply has not happened in other areas where state licensed riverboat gambling has been operating.

FACT 4: One must recognize also that every dollar spent at a riverboat casino is a dollar that won't be spent on something else. For out of town visitors, every dollar spent in Cape Girardeau is likely a dollar that won't be spent in some other town. Cape Girardeau may prosper, but this could be at the expense of some outlying communities. However, West Park Mall, Super Walmart and Cape's medical facilities etc., also attract money to Cape Girardeau at the expense of outlying communities.

The complaint that a casino being controlled by out of town interests would be sending profits out of the area is comparable to any other business which is not locally owned - be it Sears, K-Mart or Town Plaza Cinemas.

One could possibly argue that permitting a riverboat casino in Cape Girardeau could be a defensive move, to prevent "in-town" money from being spent elsewhere - wherever a riverboat casino might eventually be located in another city in this area.

FACT 5: Unlike a "bricks and mortar" business, riverboat casinos are mobile. The stream of financial benefits created by a casino in Cape Girardeau could quickly cease if the operators decided to move to another location on the river. Thus an uncertainty factor must be applied if one is attempting to estimate long term tax revenues. The consequences of a casino pulling out are great, as unemployment rises, retail sales drop (and sales tax collections) and gambling revenue disappears, placing a huge strain on city budgets.

If a riverboat casino is approved, it is imperative that the City leaders obtain the strongest possible long-term commitment from potential operators.

FACT 6: There is a potential problem in a very small number of cases of addiction to gambling. People will lose money they can ill-afford to lose. The scenario of someone gambling away the rent money, or junior's birthday money, etc. is real. Although it affects very few people, well under 5 percent, how many such compulsive gamblers are we in society willing to say is an acceptable number of "victims"?

FACT 7: Statistically, lower income people tend to proportionally spend a greater share of their income on gambling. However, this is also true of a variety of other products, from food to cigarettes, where the poor spend a larger portion of their income.

FACT 8: The reason why gambling is a revenue generator is because those gambling lose money. Over time, on average the "house" always wins, which means those gambling always lose.~

After reveiw of all of the above issues, the bottom line is that the City's bottom line would be greatly enhanced if a riverboat casino located here. Virtually all available economic data indicates the local economy would benefit substantially from a casino located here. On the negative side are a number of societal concerns, as outlined above, along with the question of morality of gambling. These issues can only be individually evaluated. There are also non-issues - increased criminal activity, influence of organized crime - for which there is no evidence that there would be any disproportional increase.

The issue can be simplified to these terms: If your decision is mainly based on social or moral grounds, vote "no". If your decision is mainly based on economic outcomes, then vote "yes". One reality of the situation is that there will almost certainly be a riverboat casino somewhere on the Mississippi south of St. Louis. It is also likely that whichever community gets the first one, it will likely lock-out other riverfront communities, as demand will probably justify only one boat within a reasonable distance north or south of Cape Girardeau. June 8th's vote will have a tremendous long term impact, and whatever decision is made is one we will be forced to live with for a long time.~~~