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Ohio casino jobs promise is misleading, study says



Published: Wed, September 30, 2009 @ 12:10 a.m.

Democratic Party Chairman David Betras adds to the chorus opposing Issue 3.

STAFF/WIRE REPORT

COLUMBUS — A casino proposal that proponents claim will create tens of thousands of jobs will simply cause money to change hands and replace established jobs, according to an economic study released Tuesday.

The Hiram College Public Policy Research Group study, paid for by the Ohio bar owners’ industry group, attempts to shred the economic arguments made by the Ohio Jobs and Growth Committee in its effort to push a plan to build casinos in Cleveland, Columbus, Cincinnati and Toledo. The committee is at the center of the strategy to sell the casino plan to Ohio voters, who have rejected gambling proposals four times in the past 20 years.

Casino backers have been relying on a study by the Economic Center for Education and Research at the University of Cincinnati that found the casino plan would create 34,000 jobs.

But the Hiram College study said the Cincinnati study is flawed because it does not perform a cost-benefit analysis that evaluates the impact of the casinos on surrounding businesses. The objective of casinos is to provide multiple forms of entertainment under one roof to keep customers there, so surrounding businesses will lose customers and sales, the study found.

“It’s really an exchange of money, it’s not economic growth,” said Thomas Pascarella, professor emeritus of economics and management at Hiram College.

Pascarella said Ohio’s casinos will largely attract local visitors and won’t bring in a large amount of money that wouldn’t normally be spent in the community.

“There will be no need for the new grocery store down the street, the new theater, because the population is growing as a result of casinos,” Pascarella said.

Also weighing in on the side against Issue 3 — albeit for different reasons — is Mahoning County Democratic Party Chairman David Betras.

“We as a region are going to take a stance,” Betras said Tuesday after asking Girard City Council to adopt a resolution opposing Issue 3 at their regular meeting Monday night.

Betras said Issue 3 would keep Mahoning Valley businessmen from ever starting a casino and create a monopoly for Dan Gilbert and Penn National Gaming.

“We as a region need to say ‘no more passing up the Valley,’” he said. “I’m tired of them overlooking us.”

Northeast Ohio votes a higher percentage in favor of the casino issue because Valley residents incorrectly believe that a casino will come to Youngstown, Betras contended.

Because the area already votes in favor of the ballot issue, Betras said that lawmakers and the business partners pushing the casinos can ignore the Valley.

“We are not, under Issue 3, ever going to get a casino,” he said. “I’m not against gambling, but I am against them looking over this area.”

Both the Hiram and the Cincinnati studies are paid for by organizations that have a vested interest in the outcome of the Nov. 3 vote. The University of Cincinnati study was paid for by the Jobs and Growth Committee, which includes Penn National Gaming. The Hiram College study was paid for by the Ohio Licensed Beverage Association.

In a statement, the Ohio Jobs and Growth Committee called the Hiram study “seriously flawed,” citing as one example a premise comparing the number of jobs at casinos in Pennsylvania with projections for jobs at Ohio’s casinos. The group notes that Pennsylvania doesn’t have full-service casinos, but the distinction does not carry over to comparisons with Indiana casinos, which had also created fewer jobs than the projection for Ohio.

The Hiram College study also questions the proposed tax rates and license fees for the plan. The 33 percent proposed tax rate on gross casino revenue is lower than in other states and leaves too much of the burden of the “social costs” of gambling on the state and local communities, the study found. The study authors also recommended that the license fees, which at $50 million would be lower than many other states, should be auctioned off to get the fair market value.

Jennifer Pitzer, who worked on the University of Cincinnati study, said the Hiram College study maintains that there is no wealth creation from casinos.

“We have no evidence to support that,” Pitzer said.

But she acknowledged that the Cincinnati study, which is an economic development study, is not as comprehensive as a cost-benefit study.


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