Mr. William Inman
Editor
Bloomberg Magazine
100 Business Park Drive, P.O. Box 888
Princeton, NJ 08542—0888
Dear Mr. Inman:
I recently came across a series about the gaming industry in Bloomberg’s February 1997 issue. Although it is clear that Bloomberg has strong negative opinions about the gaming industry, to which you are more than entitled, I must remind you that you are not entitled to your own set of facts.
While your series appears to be thoughtful, it certainly was not well—researched. It is overflowing with inaccurate and misleading information obviously obtained from unreliable gaming opponents. As my old boss Ronald Reagan used to say in regard to the Soviet Union: “Trust, but verify.” In this case, you trusted a little too freely and neglected to verify.
In regard to the biased track record of the Better Government Association (BGA) in its analysis of the gaming entertainment industry, the Chicago Sun—Times put it best when it stated in an Oct. 21, 1992 editorial that the BGA study of the effects of casino gaming in Chicago was “concocted of misleading disinformation and off—the—wall convolutions of fact and logic.” Similarly, in BGA’s most recent study, which Bloomberg cites repeatedly, there are fundamental problems with the nature in which Mr. Gazel and Mr. Thompson conduct their report. Here are just two of the study’s flaws:
Fundamental errors in the study’s methodology comprise all of the report’s conclusions with regard to the demographics and spending habits of Illinois riverboat customers. Summer interns at the Chicago BGA (none of whom had formal training or experience in social science research) used a “convenience” sampling method, not a “random” sampling method, and made conscious decisions of whom to approach at several riverboat casino locations.
The report concludes (as does your article) that riverboat gaming did little to increase tourism or economic development in Illinois. This is unequivocally untrue. There can be no question of the job creation, capital investment attraction and public revenue generation benefits from Illinois riverboat gaming. In regard to tourism, riverboat gaming could not survive if it relied solely on the revenue from host municipalities or counties. Certainly, the overwhelming majority of the Chicago residents and northern Indiana residents who now visit Joliet’s casinos, for instance, wouldn’t be visiting Joliet in the absence of riverboat gaming — nor would the thousands of St. Louis, Mo., residents who visit Illinois riverboats in Alton and East St. Louis.
Bloomberg uses the American Insurance Institute as an authoritative source, stating that 40 percent of all white collar crime has its roots in gambling. The central problem here is that there is no such study and no such organization as the American Insurance Institute. Exhaustive research by independent journalists and academics has shown that the organization does not exist (except in anti—gaming literature and a few media reports that have been duped, like Bloomberg).
The National Gambling Impact Study Commission, which is the focus of Bloomberg’s “Stacking the Deck in D.C.,” will soon begin a two—year study of gaming in the United States. For the record, the American Gaming Association is in favor of such a commission to conduct an unbiased, impartial study of the industry and once and for all dispel the many myths and stereotypes that anti—gaming forces perpetuate. Bloomberg’s “stacking the deck” inference might better apply to anti—gaming forces, as they have already succeeded in the appointments of two vehement gaming opponents — one of whom, James Dobson, Ph.D., president of Focus on the Family, in a radio interview stated that God had asked him to serve on the commission. So much for objectivity.
Finally, in response to the remark that “voters have rejected almost every gaming referendum,” here are the facts: In November 1996’s election, voters in 13 states were asked to consider various state and local gaming referenda. Pro—gaming initiatives passed on the state level in Arizona and Michigan, while local option votes succeeded in Indiana, Louisiana and West Virginia. Considering that most gaming initiatives are usually passed by state or local legislatures, these referenda victories are quite substantial and represent the choice of the people.
The facts are that gaming — casino gaming in particular — has been a huge economic and entertainment success in this country. A recent Arthur Andersen study makes clear the positive economic impact of casino gaming in the United States. Among their findings:
For every $1 million in revenues the casino gaming industry creates 13 direct jobs, far exceeding the numbers created by other industries such as the soft drink, cellular phone services, video cassette sales and rentals and cable television services.
Casino gaming companies pay an average of 12 percent of total revenues in taxes — a total of $2.9 billion in 1995.
Total investment by the casino industry from 1993 to 1995 was $12.5 billion.
The average casino wage (including tips) in 1995 was $26,000, compared to $20,000 in other amusement and recreation industry sectors, $16,000 in the hotel/motel industry and $22,000 in the motion picture industry. The casino industry alone paid $21 billion in wages in 1995 to the 700,000 people it employs, either directly or indirectly.
If Bloomberg had done its homework, then you would know that in a large number of new gaming jurisdictions, crime has decreased over time and dropped well below the rate it was prior to gaming’s arrival. You would also know that gaming has provided employment opportunities for countless men and women in this country, allowing many of them to get off welfare and food stamps. The next time Bloomberg reports on the gaming industry, I suggest visiting the mayors, city officials, welfare workers and unemployment officers who can tell you first—hand what gaming has done for their communities. Providing a one—sided, slanted view of the industry, as you have done in your series, is a great disservice to readers and to the gaming industry.
Respectfully,
Frank J. Fahrenkopf, Jr.
President & CEO
American Gaming Association