Daley's Crap-Shoot | Feature | Chicago Reader

Daley's Crap-Shoot 

It's more of a gamble than the mayor would have you believe.

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I have a modest proposal. We all know that Chicago is desperate for jobs. And everybody, from the mayor on down, seems to believe that a unique attraction could induce more tourists to spend their money here, boosting employment and tax revenue.

Moved by a sense of civic responsibility (and the incidental opportunity for a small profit for myself), I am prepared to organize a very large investment in the future of this city and to create a world-class entertainment complex so distinctive that millions of tourists will flock here.

Inspired by poet Samuel Taylor Coleridge's "Kubla Khan," I propose the creation of a Stately Pleasure Dome, an urban Xanadu, with its own hotels, restaurants, and elegant snack stands that will offer a vast array of entertainment--movies, music, jugglers and minstrels, damsels with dulcimers, electronic games, virtual reality experiences, hot tubs, massage parlors, interactive video, and much more. To make it more attractive to baby-boomer families, there will also be a children's theme park of games, rides, and video experiences (organized around a Bart Simpson theme, if an agreement can be reached).

This will be entirely privately funded. I am sure I will have no trouble raising the capital; some wealthy South American investors have already expressed interest. This cornucopia for Chicago requires only one public action. I need approval for the sale within the Stately Pleasure Dome of marijuana, cocaine, opium, various psychedelics, nitrous oxide ("laughing gas"), and the latest in synthetic psychic exploratory inventions.

Mind-altering drugs--I prefer to think of them as ingested entertainment--are a major market with obvious appeal to millions of Americans, not to mention many foreign tourists, but only in this Pleasure Dome will they be able to enjoy these delights in relaxed safety. The appeal is obvious and enormous.

The economic impact will be enormous as well. In addition to the immediate construction jobs, the complex will employ thousands--including highly paid medical and counseling staff to guarantee customer safety--and produce the usual hospitality industry spin-offs. In addition, the stockroom demands of the Pleasure Dome should build on the strong pharmaceutical industry and rich soils of the region and create hundreds of new manufacturing and farming jobs for Chicago and Illinois. By taking much of the drug trade out of the sordid streets, it should also reduce crime.

Now I know that some will express ethical reservations. But the ethics question has already been resolved. Long ago we ended prohibition and a huge industry thrives here on the sale of alcohol, not to mention such other mood-altering substances as tobacco, coffee, and caffeinated soft drinks. In addition, government surveys suggest that each year about 28 million Americans, "on literally billions of occasions," use the currently illegal ingested entertainments.

Of course, a very few do abuse them; but in the highly regulated environment of the Pleasure Dome we can guarantee that abusers will not be tolerated. We will set aside a substantial portion of revenue to finance drug abuse treatment centers. In any case, other forms of entertainment are abused--consider overeating, drunkenness, speeding, and financial speculation. Yet we don't outlaw food, drink, cars, or the stock and futures markets simply because of the few who cannot control themselves.

Here is an opportunity for Chicago to advance into a new frontier in the world's largest industry--travel and entertainment. No seedy opium den, this shall be a tasteful fun palace, reflecting the finest of Chicago's architectural traditions and attracting the cream of society. It will provide hundreds of millions of dollars in tax revenues. It will offer thousands of jobs, jobs, jobs.

Finally, to those who object, I simply ask: What alternative plan do you offer? Gambling?

Few issues have provoked such profoundly ambivalent reactions among my normally strongly opinionated friends as the current proposal for what would be the world's largest casino complex on a plot of downtown land roughly the size of the whole Loop. There are the die-hard opponents and proponents, but what people more often express is a combination of nagging misgivings and a despairing sense that the city can't afford to let the moment pass.

I want to walk through the thicket of arguments about whether Chicago should embrace this project, but before doing so, it's worth asking how we came to this juncture.

The fundamental cause is that as a nation--and a city--we have long defaulted on our public responsibilities. Americans, who are both undertaxed and far less progressively taxed than citizens of other major industrialized countries, have resisted paying the public costs of a healthy economy. This has had a number of consequences.

The antitax sentiment has contributed to the spectacular growth of legal gambling, a more than 1,400 percent rise in the amount wagered since the mid-70s. This so-called third wave of gambling in American history was triggered when New Hampshire--the most antitax state--approved the first state lottery in 1963. At first slowly, then in a flood burst, 33 other states decided that lotteries were easy alternatives to the politically tough decision to raise taxes.

Never mind that this "free money" amounted to the most regressive way of taxing people; poor and average working people didn't complain because they were blinded by desperate dreams of escape from life's treadmill. With median family income stagnant since the early 70s, and inequality on the rise during the 80s in what even before was the most inegalitarian major industrial society, more and more Americans saw the route to the American dream not through hard work but a lotto ticket.

The spread of lotteries greatly legitimized gambling. Since some gambling remained illegal, economically strapped states or communities saw legalization of new forms of gambling as giving them a quasi-monopoly advantage. Gamblers--locals were OK but outsiders especially welcome--would lose their money and the government would get a cut while some new jobs were created.

But with each spreading wave of gambling, someone else would decide to get in on the action. Although the gambling pie grew, since greater availability leads more people to gamble more often, competition for shares increased. There was increasing pressure to raise both the stakes and the level of excitement.

Such schemes would never have been needed in a healthy economy with citizens willing to pay straightforwardly what was needed to keep it healthy--for physical and social infrastructure such as schools, transportation, and public health, and for the redistribution of wealth to create balanced growth. Perhaps in those circumstances more gambling would have been legalized and tolerated anyway, but the government would not have promoted its growth as a panacea for unemployment and taxes.

The antigovernment drift of public policy for most of the past quarter century, especially the past 12 years, has undermined the public's willingness to contribute to a healthy, balanced economy. With this drift came a loosening of traditional moral and cultural restraints on different fronts. The countercultural revolution of the late 60s takes the rap from the right. But the "greed is good" individualism of the Reagan era, with its endorsement of get-rich-quick speculation and business predation, more radically undermined the work ethic and sense of community responsibility.

With the federal government leading the way (and cutting its financial aid to states and cities), governments at all levels either gave up or were unable to sustain public strategies for economic development beyond begging and bribing private business. Communities were left blowing in the laissez-faire winds, and a tornado from 1970 to 1990 blew away about 400,000 of Chicago's million manufacturing jobs.

At first the basket cases like Atlantic City, depressed Indian reservations, and the declining little towns in the old mining regions of the west or along the rivers in the midwest opted for gambling as a last hope. Now Chicago, lacking a coherent, vigorous development policy, is grabbing the same alluring economic life preserver.

So let us be clear about one thing: we are now debating about whether to have a mega-casino not because it would be a "jewel in the crown" of Chicago, as the promoters want us to believe, but because of the collapse of the public sector and civic life over the past quarter century and the devastation this has wrought for cities like Chicago.

But here we are in a miserable fix. What do we do to get out of it? Let's first examine the economic promise of the casino, then assess the downsides, concluding with a disquisition on morality and the role of vice in the modern world.

The three developers--Caesars World, Inc., Circus Circus Enterprises, Inc., and Hilton Hotels Corporation--propose a $2 billion complex of four huge casinos with hotels and a family-oriented entertainment and shopping center. It would occupy roughly 100 acres of land close to downtown, nearly half of which could be taken up with parking facilities. They claim, in a study commissioned by them from Arthur Andersen & Company, that this complex would lure 10 million new visitors a year (in addition to the 16 million who now come to Chicago), create 66,000 jobs (about 18,000 at the site itself), and produce more than $625 to $640 million a year in taxes after the casinos stabilize in a few years.

Another accounting firm, Deloitte & Touche, prepared a less rosy study for the city. This study projected 2.9 million new visitors, 38,000 jobs (about 13,000 at the site), and about $500 to $680 million in annual tax revenue by the year 2000.

Using yet another model, developed to study the impact of a casino in New Orleans, Timothy Ryan, director of business and economic research at the University of New Orleans, concurred with Deloitte & Touche's guess on the number of new visitors but estimated that the casino project would generate a net gain of only about 14,000 new jobs and about $235 million in tax revenue.

Perhaps the first observation on these figures should go to Pierre Hollingsworth, a former city official in Atlantic City, who has closely followed the spread of gambling in his town: "Don't make the same mistakes we did. Don't pass legislation based on consultant reports. They've all been wrong."

The extremely wide variations in these studies indicate that the odds of the city winning the jackpot with this project may not be much better than playing baccarat at the casinos themselves. When supposedly well credentialed experts can disagree so fundamentally, is there reason to trust any of these figures as more than an educated, and at times biased, guess?

There are several other unknowns about economic impact. First, there is no binding commitment from the developers either to spend $2 billion or to build a low-key, European-style garden in the city with elaborate entertainment. Developers had originally promised a $1.2 billion complex in New Orleans, Timothy Ryan said, but have now scaled it down to $400 million, replacing a proposed re-creation of a former opera house with a parking garage and dropping several museums, parks, shops, rides, and an artisan village from the plan. "I don't think they ever planned to make that kind of investment," he said. "I think it was to get people excited." Will the same thing happen here?

More seriously, none of the studies, including Ryan's, take into account the likely effect of future competition. If Chicago opens up to casino gambling, other cities will feel they have to do so just to keep up. Gaming firms are already drumming out a message to every community: get on the gambling bandwagon or you're sure to lose out. But as gambling spreads, as many experts predict it will, there will be less and less reason for anyone to come to Chicago just to gamble. (If Chicago resists, opponents to urban casinos elsewhere will gain power, but the forces for gambling expansion will remain strong.)

All the debate about job and tax generation is off the mark, argues William Eadington, professor of economics and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada at Reno. "You can make a strong case that these [jobs and taxes] are all the wrong reasons for legalizing gambling in the long term. It should stand on its own merits. Its ability to create jobs or raise revenue will be constrained by [gambling] developments beyond the city's jurisdiction. A lot of other jurisdictions are looking at casinos as panaceas, and they're not. They're primarily satisfying local customer demand, and that's how they should be viewed."

Eadington suspects that the job and tax projections for the Chicago casino are exaggerated in the long run, although its novelty might provide a momentary burst of success in attracting tourists. But then we return to the issue of who the customers will be in the long run.

Deloitte & Touche projects that at first 58 percent of the customers will be from the Chicago metropolitan area, although the firm argues that tourists will gamble and spend far more per person than locals. Eadington believes that Chicago-area residents will turn out to be well above 60 percent of the patrons. Ryan predicted that people already in Chicago--residents as well as tourists who were already here for other reasons--would initially account for 72 percent of the casino days (number of gamblers times the number of days they gambled). A former manager of two big casinos told the Civic Federation that the projected estimates of outside visitors were high and that the casinos don't need to go outside the region to succeed financially.

What difference does it make where casino gamblers come from? If most of the customers are from the region, then there is little new money coming into the local economy. Local gamblers who might otherwise have flown to Las Vegas or other destinations might spend their money here (what economists would call "import substitution"). Yet many of the casino customers will be new local gamblers, or people gambling more than before or in different forms (instead of betting on the horses, for example).

It is intuitively obvious that the money spent at the casino will be diverted from other places--whether they be other forms of gambling, trips to restaurants and movies, savings, or the kids' food and clothing--a large portion of which will be local. Visitors already here for conventions or sports events might stay longer and spend more in Chicago if they go to the casino, but it is just as possible that they will be throwing dice and pulling slot machine handles instead of dining out and going to the theater or a blues bar.

Deloitte & Touche acknowledges that the existence of casinos will generate much new gambling from area residents. The firm estimates that in 1997 the casinos would win $320 million from these newly induced local gamblers. But remarkably, it claims that only $66 million will be taken away from other local businesses and about 70 percent of that, or $47 million, will come from other local gambling.

Ryan, on the other hand, estimated that existing visitors and residents will lose $1.42 billion of the $1.94 billion that he projected the casino eventually taking in as yearly winnings, and that $908 million of this will be money they otherwise would have spent on local business. New visitors may pump as much as $690 million into businesses outside the casino complex, such as restaurants and shops, but even so, those other Chicago businesses will suffer a net loss of $218 million.

"The creation of a casino in Chicago would create a tremendous transfer of wealth from existing businesses to the owners of the casino," Ryan wrote. "The effect would be even more pronounced if we consider the transfer effect of the other aspects of the proposed complex--retail, restaurants and entertainment."

That $218 million loss to existing Chicago businesses would cost 12,544 jobs, Ryan calculated. Subtracting that from the 27,057 direct and indirect jobs he projected for the casino leaves a net gain of 14,277. That's still a large number, but it's a long way from the 66,000 the developers predict. If the casino eventually relies even more heavily on local residents and tourists who would come to Chicago anyway, assuming that casinos and other forms of gambling spread, then the net job gain from the casinos will be even less. In turn, the net revenue gain for the city and state from sales, property, income, and other taxes will also be less. If average incomes of casino employees are less than the projected $30,000, as comparative wage scales in both Las Vegas and Chicago give us good reason to believe, tax revenue will be further reduced.

Much of the political battling has been over the issue of relative loss to existing forms of gambling: the state's lottery, the riverboats, and horse racing. You can take your pick of estimates, although nearly everyone agrees horse racing would be most hurt. The issue of net job and tax gain or loss for the state as a whole is obviously important; the more casinos cut into other wagering, the less overall gain from the casinos, although there could be some transfer from outside of Chicago to Chicago.

But rather than evaluate these very hypothetical numbers, I want to highlight an important warning in this dispute. We see here how governments, once hooked on gambling for jobs and taxes, frantically work to protect those sources and become dependent upon them. The state has already granted substantial tax breaks to the horse-racing industry, and now that it is threatened, there is talk of further tax breaks to bail it out.

What will happen when the spread of gambling and new competition begins to affect the Chicago casino? Already the casino operators raise the specter of competition from other states as an argument for why they should not pay the 20 percent gaming tax assessed on the riverboats and why they can't charge a stiff admission fee, as recommended by the mayor's own commission.

Without a fight Mayor Daley has given in to the casino demands for a 10 percent gaming tax. They repeatedly argue that Nevada and New Jersey have lower taxes. But they don't mention that Louisiana has fixed an 18.5 percent gaming tax. Also, although the New Jersey rate is 8 percent, there's an additional 1.25 percent tax for Atlantic City housing development, heavy licensing fees for slot machines, and a requirement that casinos reimburse the state for all monitoring expenses, which Daley would pay for out of the gaming tax.

How long will it be before the developers come begging for less regulation, a lower tax, or open subsidies in order to preserve the casino industry in Chicago? What looks like a cheap economic high today at no public cost may turn into a dangerous economic dependency in years to come.

If the casino succeeds, there will be pressure to open up casino gambling further. Suburbs will want it; Rolling Meadows's city council just approved a casino that the Chippewa Indians want to build. Eventually other hotels may demand that they share in the action, since slot machines and other games are very profitable, guaranteed winners for the house.

In virtually every state or community the pattern has been the same. As gambling spreads, there's pressure to raise the limits on stakes gambled, to reduce taxes, to introduce new games, to spread gambling further. Two years ago the Iowa gambling riverboats started up, with several cities floating bond issues to build docks to accommodate them. This year three of the five shut down and moved to greener pastures with less regulation, leaving the towns holding the bag.

As Philadelphia Inquirer reporter David Johnston argues persuasively in his new book Temples of Chance: How America Inc. Bought Out Murder Inc. to Win Control of the Casino Business, the so-called tough regulators in New Jersey tolerated a wide range of misconduct and financial abuse by the casino owners, even though they strictly disciplined ordinary casino workers. The temptation to accommodate the owners to preserve the businesses severely undermines regulation; it's a corruption more insidious than bribery and payoffs and ultimately just as harmful.

One of the most persuasive arguments made on behalf of the casinos is that there will be no public cost; it's all private money. Yet there are reasons to doubt that claim. First, Daley's newly released casino legislation provides for an independent Metropolitan District Authority that will be able to issue tax-free revenue bonds to develop the site. That means there will be a federal tax subsidy immediately for the developers.

Also, although the developers often talk of how they will assume infrastructure costs, they also hedge. Circus Circus president Glenn Schaeffer, for example, said of the site to be selected by the city, "We'd like that not to involve tremendous infrastructure costs. We have within our budget an allotted subbudget for infrastructure. . . . We've said we'll take care of the site." But what if the costs exceed the subbudget now allotted? And what about the infrastructure costs around the site? Who will pick up that tab? The Deloitte & Touche study, after allocating the $2 billion in project costs, mentions that "an additional $195 million will be required for infrastructure for the project," but the firm gives no hint about who will pay for that.

Former economic development commissioner Rob Mier recalled that the world's fair promoters also said the fair would require no public money, but when negotiations started the city discovered between $150 and $250 million in new public costs that the fair authority had taken for granted.

Even if the city does not pay for any infrastructure or job training or provide any other public subsidy, which is doubtful, there are public costs to this project. For most of this year it has occupied a large part of the time and effort of the mayor and many of his top staff. That is time, intellectual activity, and public persuasion that was not devoted to other economic strategies. Furthermore, if the project succeeds, it will further divert and distract public officials as they shepherd this project over the next four years. Also, Daley is expending a great deal of political capital. There are limits to the number of votes, or favors, that can be wrung out of some legislators or allies elsewhere in the state. Is this the best use of these limited public resources?

The record on gambling as a motor of economic development is not impressive. Las Vegas may be booming, but with weird, distorted patterns that leave out most of the black community. The story of Atlantic City is succinct: it used to be a slum; now it's a slum with casinos.

Nobody knows what will happen when huge casinos are placed in a big city. Unlike manufacturing industries, from steel, chemicals, and telecommunications to software and pharmaceuticals, casinos do not form the core of a potentially expanding web of businesses. Its one promise is expanding tourism, but the spread of gambling elsewhere will crimp that prospect. And as a survey by Crain's Chicago Business suggested, the presence of casinos could turn away nearly as many potential business conventions as it attracts, yet it will not affect most.

Chicago may be a big, diverse city, unlike Las Vegas and Atlantic City. But if many of the potential problems materialize, the casino could harm the business climate and attractiveness of the city. Already Daley, in his enthusiasm for his latest mega-project, has pronounced that "manufacturing is gone," hardly an encouragement to the manufacturers who are trying to remain.

Big as Chicago may be, this casino complex will be huge, and it will be with us for many decades once it is built. It has the potential to define Chicago's character to others. After all, around the world, the most prominent association with Chicago some 70 years later remains a rat-a-tat-tat of Al Capone submachine guns.

Promoters, and those who have bought their line, want us to think about London, Vienna, and other European cities with casinos. But those cities have small, exclusive operations that are often heavily taxed, prohibited from advertising, and made off-limits to local residents or casual customers. Many tourists may head to London, but few do it primarily for casinos. Perhaps Chicago would do better in the long run simply to work to improve its attractiveness as a city, for example by offering more encouragement to high and pop culture and by preserving its history and architecture. Perhaps this focus will help keep people--and businesses--here and make Chicago itself, not some self-contained "entertainment center" within, the tourist destination, just as London, Paris, and Vienna are.

Most casino jobs pay poorly and offer part-time employment with few benefits and little security. The analysts' figure of a $30,000 salary for a full-time worker is misleading. One-third of Atlantic City's casino workers make $5,000 to $10,000 a year; the average pay in Las Vegas is less than $19,000 a year. If these jobs may not be much worse than what the rest of the travel and hotel industry offer, there is probably greater stress and sexual harassment of women workers in the casinos. And the record elsewhere on affirmative action suggests blacks and Hispanics may get their share of the housekeeping and menial jobs but few of the better-paying positions. Some job is better than no job, if those are the only alternatives, but the choice hardly makes for an inspirational view of the city's future.

There are alternatives for both jobs and taxes. For example, last year the city's own Economic Development Commission concluded that "a proactive industrial park program in Chicago could conservatively yield 150,000 jobs." But there has been little movement to take advantage of this potential. Also, there are innumerable micro-development strategies: helping small businesses link together to win contracts and sales, providing technical assistance to help businesses adopt the best practices in their industries, expanding infrastructure bonds (and not wasting bonding authority on building materials-recovery facilities for the "blue bag" recycling program), supporting more incubators, redirecting city colleges toward better job training, encouraging small-business lending by local institutions, helping neighborhood development groups assemble land for retail or manufacturing. The list could go on.

Each of these small, incremental improvements could bring anything from a job or two to a few dozen jobs at hundreds of businesses, and investments of a few thousand or even a few million dollars at hundreds of sites around the city. Does it make any difference if the city gets $2 billion in one check or 2,000 checks for $1 million each? The political advantage of the former is that it makes a bigger splash. But each year there is about $15 billion or more in new investment in Cook County. Adding $500 million a year over four years is not insignificant by any means, but modest increases in a multitude of investments under way can easily match the casino figure.

The typical rejoinder is that, sure, we can do all these things and have a casino. But with the focus on the casino, the alternative strategies will be neglected. Or, it might be argued, other strategies could involve public spending, but the casino is free! Of course, there will be direct and indirect public costs of the casino, but even if it were free, freebies aren't always good bargains. Would you rather have a free car that's dangerous or pay a little for one that's safe? Modest public investments may be worth the cost if they give the city more control over its destiny. With Bill Clinton in office, some money may start flowing to the cities, but the state can do more on its own.

This brings us to taxes. The casino promises roughly $500 million a year in taxes. Although it probably will draw more middle-class customers than the lottery, it is designed to have a higher ratio of slot machines to table games than the big casinos in Las Vegas. The slots, which generate higher profits than the table games, are better positioned to exploit low-skill, low-stakes gamblers. In any case, looked at as a generator of revenue, the casino tax is likely to be regressive, hitting lower-income populations disproportionately.

Already Illinois has the fourth highest rate of taxation of the poor of all states; from 1985 to 1991 taxes on the poor here increased 19 percent, on the middle class 15 percent, and on the rich nothing at all. The casino tax will exacerbate that miserable record.

If the state adopted a progressive income tax, with a 5 percent rate starting at taxable income of $55,000 a year and 8 percent at $125,000 a year, it could double the personal exemption and reduce taxes for everyone making $80,000 a year or less in taxable income. At the same time, the state would gain $1.5 billion a year in new income, more than three times what the casino would provide. That would provide the money to finance both education and an economic development strategy with real long-range potential. If Daley has political capital to expend, he should devote it to a progressive income tax, not a casino.

In the balance, there undoubtedly would be a sizable chunk of new jobs and tax revenue from the casino, even if far less than apologists now claim. It's hard to deny the jobless a crack at a job. But if the casino backers came in with a proposal that would yield 10,000 net new jobs, $150 million total revenue, and a customer base drawn mainly from local folks, they might not have generated as much support as they did with inflated promises.

There were many unemployed in Chicago when Mayor Harold Washington and a former state's attorney named Richard M. Daley flatly rejected a casino. Why build one now? Is the mayor motivated by joblessness now in a way he wasn't before? Or is he more motivated by the fate of the underused, overbuilt Loop hotels and by the work needs of the downtown lawyers and real estate developers who have been his major backers and who have been idled by the end of the 80s building boom?

What are the downsides? Apart from the economic effects already mentioned, there are many more ambiguous social costs that Andersen and Deloitte & Touche mention but do not pursue. In its report, the Better Government Association (BGA) dwells on these social costs, which are hard to measure in any case and, given the lack of experience with a big casino in a big city, hard to predict on the basis of past experience.

One of the most serious downsides is problem gambling, which in its most extreme form is called pathological gambling. Problem gambling leads to serious disruption of an individual's work and family and can plunge him or her deeply into debt, often provoking theft, embezzlement, fraud, and other crimes.

Social scientists have only recently begun to study problem gamblers. About 20 percent of the public have never gambled; about 55 to 60 percent gamble in some form, perhaps by buying a Lotto ticket, at least once a year. Roughly 4 percent of the whole population are problem gamblers (with some states like Iowa ranking lower, others like Connecticut higher), according to Rachel Volberg, a medical sociologist who is president of a small research firm specializing in the study of problem gambling. Of regular gamblers, it may be fair to say about 15 to 20 percent are problem or pathological gamblers.

Compulsive-gambling expert Robert Custer told Business Week that problem and pathological gamblers may account for nearly half of all money wagered. "No surprise, then, that the gambling industry has shown only token interest in the problem," the magazine reported. "Compulsive gamblers are often their best customers."

Problem gamblers are likely to be attracted to the fast action, excitement, and high stakes of casinos. Just as ease of access will increase gambling itself, it is likely to increase gambling pathologies. Volberg said, "We are beginning to see that in states that have more types of legal gambling available and have had them longer periods of time, we do have higher prevalence rates [of problem gambling]."

On the basis of Volberg's national survey data, the Chicago-area population includes about 280,000 problem gamblers. The availability of a large, strongly marketed casino is likely to worsen their problems and increase their numbers.

"Certain groups appear to be at greater risk for developing gambling-related problems," Volberg said. "Minority individuals, African Americans and Hispanics in particular, seem to be at somewhat greater risk; also, individuals under the age of 30, individuals with low income and low levels of education. From a policy point of view, if you're thinking of locating a four-casino development in the middle of an inner city urban area where those concentrations of at-risk groups are greatest, you're looking at a probable increase in individuals with gambling-related problems."

With the casinos marketed as part of a "family entertainment" center, the issue of underage gambling takes on added importance. Nearly one-third of high school students in north, central, and south New Jersey reported gambling weekly or more in 1987, more than three to five times the rate in states such as California and Virginia. At least a million minors gamble each year in New Jersey casinos, according to BGA calculations. David Johnston recounted tales of teen gamblers who were plied with free drinks and given credit in Atlantic City. "So long as kids are losing money the casinos have no incentive to throw them out," he wrote. "And if they win the casinos suddenly take a keen interest in their age because if the player cannot prove he or she is twenty-one then the casino gets to keep the money."

High school and college age youth are much more likely--two and a half to eight times more likely, depending on the study--to be problem gamblers than are older adults. Problem gamblers in the general population are also much more likely than unproblematic gamblers to have started gambling when they were under 15 years old. "If you market gambling as family entertainment, you're potentially exposing even greater numbers of individuals who are at risk to an activity with which they could get in trouble," Volberg said.

One risk related to problem gambling is increased crime. The BGA's comparison of crime in Las Vegas, Atlantic City, and Orlando, Florida, generally showed Atlantic City the worst by far, with Las Vegas experiencing a lower incidence of crime in many categories than Orlando. BGA investigators attribute some of Las Vegas's success to controversial, aggressive police tactics and high rates of incarceration. The amount of crime in Chicago will certainly increase, just because of the numbers of people who will be drawn here; there are grounds to believe the rate of crime may also rise.

The big imponderable is the involvement of organized crime. William Eadington cautions that "the gaming industry has demonstrated it's a difficult industry to control. Control mechanisms in Nevada and New Jersey have not been without pain and backsliding." But it will be much harder to control organized crime and corruption in a big city like Chicago, he said, "with such a checkered history of competence and integrity." Although the big casino operations are no longer controlled by mafiosi, Johnston and federal law enforcement officials agree that organized crime continues to play a major role in the casino business, whether in providing supplies or services to the industry or by using the casinos as a venue for laundering drug money, even under the supposedly strict regulations of New Jersey, the model for Daley's monitoring legislation.

The BGA collected testimony from several lawyers, FBI agents, and other officials who have dealt with organized crime that mocks the ability of a regulatory commission to control organized crime. They argued, in the words of the chief of the Chicago Strike Force of the Department of Justice, that "casinos are cash cows for the mob." Edward Hanley, who orchestrated Daley's initial support of the casino, is general president of the Hotel Employees and Restaurant Employees Union, which has long been alleged by federal investigators to have mob ties. Clearly, casinos would fertilize the soil for mob growth.

In a city with such a recent history of corruption of the city council and judicial system, there are good reasons to worry about the potential for corruption. (Three mayors of Atlantic City have been convicted of corruption; two resigned.) That reputation for corruption already is a disincentive to business, and the reality of corruption further weakens the government's ability to act. Does anyone seriously doubt that the casino, if built, will become one of the biggest dispensers of political patronage in the city? Aldermen (and maybe even mayors) will be lined up looking for jobs to hand out, giving the casino even greater power to corrupt and influence politics.

There is also the question of how big the bill will be for policing, regulation, and corrections. The mayor's gambling commission estimated regulation could cost $60 million a year and police and fire about an extra $11.5 million a year. The Illinois Criminal Justice Information Authority estimates that the casino would increase the cost of controlling ordinary street crime by $41.5 to $99.8 million a year. Daley's proposed legislation would divert part of the casino tax to pay for regulation. The city would get 25 percent of casino tax revenue to use as it chooses, but Cook County, although shouldering the burden of increased court and jail costs, would get nothing.

Most of these downsides of the casino have been given short shrift in the studies so far, except for the one done by the BGA. Daley wholeheartedly embraced the project without even a pro forma assessment of its shortcomings. The reaction of some boosters, such as former Tribune editorial page editor Lois Wille, is simply to scoff at the idea that the image of so diverse and worldly a city as Chicago could be tainted, to accept at face value a promise of the "most stringent" regulation in the nation (much as New Jersey promised), and simply to dismiss the issue of compulsive gambling's toll as insufficient reason to stop others from enjoying a night at the slots or tables.

The downsides are hard to measure. Though some, like problem gambling, are certain, others are simply potential risks. Yet as the economic promise is scaled down, the counterbalance of these risks weighs more heavily. Why is it that Daley must run around promising $1 billion to the schools, elimination of the head tax to businessmen, jobs for Chicago Housing Authority residents, and all sorts of other inducements to win public support? If this were simply a major tourist-destination entertainment center without the casino, would this be necessary? Of course not. The casino can't stand on its own merits.

So, ultimately, the issue of morality, aesthetics, and the character of the community count. People who like to gamble in casinos simply think they should be able to indulge in what they consider entertainment. Is gambling just like dancing, which in some American communities once was banned? Or is it like alcohol? Or marijuana?

Gambling is an ancient and widespread human activity, but so are lots of other worthy and dubious activities (war comes to mind). Attempting to suppress gambling seems unwise and ineffective. But like many human activities, the character of gambling is greatly influenced by its cultural context. The Friday night poker game or office football pool may lead some people to lose more than they can afford. But among friends there are at least some controls over abuse, and social gambling can nurture friendship and community ties. At even the bingo hall or the track, the gambler can be part of a community, although the losers hanging out all day at the offtrack betting offices or the grim-faced folks at some bingo parlors stretch the definition. They also stretch the conception of gambling as a source of fun and entertainment.

Much gambling proceeds at a speed and with stakes that produce a mild buzz of excitement but not a knockout high. Casino gambling stands in relation to the friendly poker game much like cocaine does to coca leaf chewed by Bolivian peasants or like grain spirits do to wine and beer. The faster-paced games are more intense, more compelling, more "addictive." Much of the social setting--the "comps" of free drinks, free rooms, attentive waitresses in scanty outfits, and easy credit for high rollers--is oriented to encourage more intense play, not to control it. It's a business, which wants to promote gambling to as many people as possible, even if the ruse for drawing people in is providing entertainment for the kids.

Society has a hard time coping with the commercialization of vice. Free-market libertarians would simply eliminate all restrictions and leave matters to the market. In Chicago that would mean opening up casino gambling to anyone who wanted to establish a slot machine or blackjack table. If casino gambling is really just good fun with no moral issue involved, then why restrict it to a 100-acre site and to four monopoly casinos?

But even the casino backers don't want a free market. The casinos don't want it because they want the profits that come without competition. Although Glenn Schaeffer of Circus Circus maintains that the entertainment portion will be profitable on its own, clearly the high profit centers are the casinos. "The casino is the economic driver," he said. "The revenue per square foot in the casino is higher than in nongaming entertainment. The nongaming gives people things to see and do. It drives repeat customers."

But one wonders to what extent the nongambling entertainment is sugarcoating rather than an essential part of the strategy. I asked Schaeffer what he would do if gambling were opened up. "If they want us to invest $2 billion, and they want others to invest a few thousand, we'd have to look at it," he said. But why would he hint at eliminating the entertainment center, if that's really his project's competitive advantage and profitable in its own right?

In our interview, I was struck by how he would shift in his conception of his operation. "We're in the entertainment business, which is one of the fastest growing businesses in the United States," he started off. But later he said, "We're not first and foremost in the theme park business. We're first and foremost in the gaming business." The theme park appears to be part of a bargain to gain monopoly position as well as a marketing tool.

If people want to drink, smoke, gamble, use drugs, pay for sex, or indulge in other "vices," and they do not hurt others in the process, why not let them? But why not also acknowledge that society does have a stake in these activities, which may ultimately impose social costs? We require warning labels on cigarettes and prohibit advertising tobacco products on television and radio. We restrict sales of alcohol and provide warnings about consumption. We recognize that it is not an altogether bad thing to worry about our fellow citizens harming themselves, even if we ultimately give them that right.

The proper model--for drink, drugs, gambling, sex, and other traditional vices--is tolerance combined with regulation, education, counseling for the troubled, and minimal commercialization, including severe limits on or prohibitions of advertising and other promotion.

David Johnston, after years of reporting on casinos, comes to similar conclusions in his book Temples of Chance. "To make wagers among friends a crime is to create vice," he writes. "But to make the noblest expression of our civility, the democratic state, a partner in wagering is to encourage pathologies to enrich the state's coffers, a Faustian bargain."

Social gambling is fine, but "commercial gambling is different," Johnston argues. "It can quickly and easily bring economic ruin, inducing instability that threatens the social fabric. In minutes an uncontrolled casino can turn a millionaire at a craps table into a pauper. The forces that motivate casino owners and their marketing staffs cause them to go beyond entertaining those in control of their pocketbooks and to prey on the foolish, the compulsive and the weak."

Daley's proposed legislation offers weaker regulation than was recommended by his own gaming commission, which seemed to view New Jersey as a model. Johnston, who finds the New Jersey model thoroughly inadequate, recommends far tougher measures: ban credit gambling, make gaming debts uncollectable, ban advertising, require casinos to close at least a few hours, ban free alcoholic drinks, seriously punish casinos that let juveniles gamble, destroy old slots, send auditors unannounced to examine casino transactions, make casinos liable for embezzled money lost by a "rated" player (whose finances they've monitored), and permit casinos not by legalizing gambling but by carving an exemption from criminal law.

In order to provide meaningful enforcement, regulators must feel free to shut down casinos. But if the casinos are tied into hotels and entertainment complexes that are economically important, then the regulators will be intimidated from taking their job seriously. For that reason, as well as to minimize any exposure of young people to casinos, the idea of making casinos part of this new entertainment complex is a disaster in the making.

If we want casinos because we want to make this "entertainment" available, then let's indeed follow the European model: small, freestanding casinos with restrictive admission, no credit, high taxes, strict supervision, and no advertising.

The move to a massive casino complex has such implications for the community as a whole that it also seems essential that it be submitted to a referendum vote (one that would prohibit the casino developers from spending a penny on advertising and promoting their idea beyond providing basic public information). Daley's proposal to move decisions on the casino construction into the hands of an independent authority provides some check on what the casino can do, but the authority itself has far too much power and is largely unaccountable to the public. This authority will insulate the casino from popular objections behind an agency that will use government power to issue bonds, condemn property, and in general guarantee that developers get what they want. If Chicagoans want casino gambling, let them make the decision independent of any offer, then decide what form it should take to minimize harm, and finally open the project up to bidders.

If the city does decide to go ahead with the casino complex proposed, however, I hope they will be willing to take the next step and approve my proposed Stately Pleasure Dome. And when that's finished, I have in mind a massive 200-acre complex, tentatively called the Erotikon, which will offer dozens of fantasy locations from around the world, peopled by beautiful young women and men of every taste and persuasion. This will be a world-class, cutting-edge project in the booming business of tourism and entertainment in which Chicago can, once again, take the lead.

Art accompanying story in printed newspaper (not available in this archive): illustration/Steve Mendelson.

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