Rutgers Dean Cites Casino Problems In UT-ORNL Journal

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KNOXVILLE, Tenn. — Legalized gambling is not the “miracle bullet” to cure municipal revenue woes that proponents claim it is, the Rutgers University dean of planning says.

Citing the experience of Atlantic City, N.J., James W. Hughes says “economic and fiscal gains have taken place, but…have come at a cost.”

While there has been some improvement in city services, Hughes says, those gains have been offset by the cost of increased street crime and prostitution.

Hughes outlines his views in the current issue of a research and policy journal published quarterly by the University of Tennessee and Oak Ridge National Laboratory.

Gambling was portrayed as an economic magic bullet for Atlantic City, but “the promised miracles never quite became reality,” Hughes says.

However, “it is hard to deny that casino gaming has strengthened the fiscal well-being of Atlantic City,” Hughes says. “Without it, the city likely would be a basket case.

“Residents now enjoy city services that are better than the services they received in the pre-casino era. Nevertheless, the amount of revenues that Atlantic City now obtains from casino property taxes suggests that city services should be even better.”

Congress has voted to create a national commission to conduct a two-year, $6 million study of the impact legalized gambling is having on the nation.

Gambling foes hope the study will show that legalized gambling costs communities more revenue to deal with crime and other problems than it generates for services.

Hughes says other tradeoffs have occurred since gambling was legalized in Atlantic City 20 years ago.

For example, he says, Atlantic City casinos generated jobs in the hotel and gambling sector, but employment in higher paying fields such as finance, insurance and real estate fell.

More than 75 percent of the 40,000 casino jobs are held by people living outside of Atlantic City, Hughes says.

Spillover business from casinos to other city businesses has not occurred, he says. Casinos are “isolated, full-service islands” with hotels, and most customers are single-day visitors who never leave the building to spread their wealth.

“The experience of Atlantic City residents stands in sharp contrast to the vision of economic revival offered by gaming advocates 20 years ago and should serve as a reality check for the gaming frenzy that now grips the nation,” Hughes says.

Contact: Dr. Danny Schaffer (423-974-4251)

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