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Circle of Disinformation Redux

Reality rules but opponents will always try-and lie

As you may know, a little more than a decade ago, the American Gaming Association exposed a clever ploy used by anti-gaming academics called the “circle of disinformation.” These academics claimed to prove, through a series of “economic models,” that any economic benefits derived from gaming were exceeded by the social costs. Not surprisingly, these flawed economic models ultimately failed to stand the test of academic peer review.

Fortunately, for several years now, the research and those who developed it have been overshadowed by reality. Casinos have proven exceedingly positive for the states and communities where they operate. But, alas, the circle is making a comeback. Now, many of the same researchers involved in the disinformation campaign of the early ’90s are using the recent downturn in gaming revenues to once again trot out their old arguments.

This coterie of social critics is using the industry’s current economic problems as a window of opportunity to promote their own selfish agendas, the long-term consequences be damned. They claim that the industry’s current situation was inevitable. They suggest that casinos were bound to fall on hard times, and, now that revenues are down, it is time for gaming communities to make casinos illegal once again.

Though it may sound ridiculous, some critics even suggest that Detroit’s economy is struggling because the gaming industry hasn’t delivered on its economic promise. Forget the auto industry’s problems. Gaming companies are laying people off-critics say that proves there is no economic benefit to gaming. As if every other industry isn’t doing the same thing.

We in the industry should take this talk very seriously. After all, the claim about Detroit’s economy was published in a Wall Street Journal article. A gaming critic, under the guise of a journalist, wrote: “In locale after locale, citizens are realizing that they were snookered by politicians’ promises that casinos would provide a problem-free explosion in jobs and income from tourism. Three casinos have opened in Detroit, for example, but the city looks as desiccated as ever, and one of the operators is embroiled in bankruptcy court.”

This is a disconnect of the highest order. Detroit’s casino industry has, in fact, created employment for 7,000 people. It accounted for almost $1.36 billion in revenues in 2008, an increase of 1.84 percent over 2007 numbers.

The end game of these opportunists-to put a valuable segment of our economy out of business-would be a serious blow not only to the hundreds of thousands of Americans working in the gaming industry, and to the communities that support casinos, but to the nation’s overall economic recovery.

We cannot allow these claims to go unchallenged. It is the responsibility of all of us who work in or benefit from the gaming industry to repudiate these allegations. And they are easily repudiated.

First, we have data and testimonials from gaming communities-both large and small-across the country that enjoy the many economic advantages casinos provide. Civic leaders, businesspeople and citizens of gaming communities talk often about the positive benefits of gaming. For example, according to the mayor of Biloxi, Mississippi, A.J. Holloway, “We’ve been able to improve our quality of life (with the advent of casinos)…”

In Illinois, Robert Gilliam of the Elgin City Council reported, “The casino industry has made us a better community.”

Second, casino gaming has a sterling record of helping depressed economies recover. This record was first established in riverboat communities in the Midwest and has since proven true elsewhere.

A dramatic example of our industry’s ability to spark economic recovery surfaced in the aftermath of Hurricane Katrina. In the Gulf Coast regions of Louisiana and Mississippi, nearly 20,000 gaming industry employees were back at work less than two years after Katrina dealt a devastating blow to the area and its gaming facilities. Those employees earned a combined annual salary of nearly $500 million, which they invested in their local communities, providing a much-needed jolt to the regional economy.

States also continue to turn to gaming to address crippling budget shortfalls. There are a few recent examples from last November’s elections. In Colorado and Missouri-two gaming states that have experienced, firsthand, the economic benefits casinos can bring-citizens voted to expand gaming to support state education programs. And in Maryland, voters overwhelmingly approved a measure to legalize slots to reduce the state’s $1 billion deficit.

Finally, the circle of disinformation claims that an increase in problem gambling has led to a growing number of social ills. However, there is one major problem with that thesis-the facts are crystal clear: A multitude of highly credible studies show that the prevalence of pathological and problem gambling is no higher today than it was in 1976, when gaming was only legal in Nevada and had just been legalized in Atlantic City.

Despite incredible growth in access to casinos and other forms of legal gambling, the percentage of pathological gamblers has held steady.

Ultimately, despite the recent slump in revenues, the gaming industry remains a vital contributor to the nation’s economy. Across the country, millions of Americans still visit casinos every day. The gaming industry creates direct employment for hundreds of thousands of people-jobs that simply weren’t there before. Casinos continue to generate billions in tax revenues that allow states to pursue important public works projects. As the overall economy improves, and discretionary spending once again increases, our industry will be at the forefront of the nation’s economic revitalization.

For anyone with even a slightly open mind, these facts trump the propaganda found in the circle of disinformation. If we use them well, the circle and its creators once again will be relegated to the shadows.

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