A Casino in Oxford County: The Final Word

COUNTY – On November 2, voters across the state will be asked whether they would like to approve a casino in Oxford County. If the casino's supporters or opponents are correct, it will be the biggest decision that has faced the town of Oxford this century, with the capacity to utterly transform the way of life and the standard of living.

In most cases, a large business can open its doors in a community without the blessing of a statewide referendum, but the casino is different than most businesses. Currently, it is illegal for a casino with table games to operate in Maine, a fact which has been true since anti-gambling laws first swept the nation in the 1800s. The law has been tested many times over the years, and now the public is once again being asked whether 2010 is the time to legalize casino gambling Maine.

The Advertiser Democrat has written tens of thousands of words on the topic, many of them analyzing the impact on the local economy, the unemployment rate, and the local quality of life. We now present the bottom-line claims of the casino's supporters and opponents, as well as our own analysis of where the truth lies, which is based on our hundreds of hours of research on these issues.

If approved, a casino will be located somewhere in Oxford County, with the most likely site being on or near Pigeon Hill on the south end of the town of Oxford.  According to the casino's investors, the construction would begin in early spring, with a five-year "build-out" phase, after which the investors hope they will have built a 65,000 square-foot, full-scale four-season resort, including a spa, two hotels, and a casino.

After the full build out, investors hope to be hosting over a million unique visitors every year, collecting $127 million in revenues, directly employing somewhere between 800 and 1600 people at a cost of between $30.3 and $80.7 million in wages, and paying $53.6 million in taxes to the state, which includes money that the state will then distribute to education, the town of Oxford, and Oxford County.

Jobs

YES: Casino supporters, relying on a study they commissioned from University of Maine Economics Professor Todd Gabe, say that the casino will create 2,784 jobs. Of these, they say roughly 800 will be hired in the casino's gaming operations, 800 will be created in the hospitality industry both on and off the casino's premises, and 1000 will be created elsewhere in the regional economy by a multiplier effect.

NO: Casino opponents concede that the casino itself will employ hundreds of people, but claim that there will actually be a net loss of jobs in the area. Drawing on academic studies that show high levels of unemployment in casino counties, they say that any newly-created

positions will be more than offset by layoffs and closures from small businesses that will lose business to the casino.

BOTTOM LINE: Clearly, the casino will both create and destroy jobs in Oxford County.

On the positive side, the casino will directly hire a significant number of people, although the number is unknown. Outside of the casino, certain economic sectors will see growth that come as a direct result of the way that the casino will impact traffic patterns in the region. Businesses which rely on drive-by traffic, such as gas stations, will see more traffic. Some area attractions, such as golf courses, will have an opportunity to position themselves in such a way as to benefit from the casino's customer base.

On the negative side, most local businesses, which will directly compete with the casino for hospitality and entertainment dollars, will suffer. Even the casino investors have admitted that they plan to take in nearly $90 million from in-state customers, some of which will be subtracted from the local economy. Area restaurants and hotels will lose customers to the competitively-priced dining and lodging offerings at the casino. Local bars will lose business. Just as Walmart took a bite out of the bottom line of many local retailers, the casino will take a bite out of the bottom line of any business that relies on disposable income. As these businesses slow expansion, downsize, or even close down, jobs will be lost.

We predict that the net impact on the number of jobs on offer will not be significant. It will be either mildly positive, or mildly negative, depending on factors such as the extent to which the casino chooses to encourage its out-of-area customer base to partake in other area attractions, and the extent to which the casino's local investors (Rob Lally and Suzanne and Rupert Grover) re-invest their millions of dollars in profits into future local business ventures.

Unemployment

YES: Casino supporters generally claim that unemployment rates will remain static, or decrease, although they have backed off claims that the unemployment rate will be dramatically affected.

NO: Casino opponents claim that unemployment rates increase in casino counties, and that the proposed casino will increase the unemployment rate in Oxford County.

BOTTOM LINE: We predict that the casino will have no impact on the unemployment rate, or that it will result in a slight increase in the unemployment rate. As we have already discussed, jobs will be both created and lost in the county. However, studies do support the idea that the population of casino counties grow more quickly than control counties. Casino supporters see this as a positive sign that casinos attract new families and skilled workers to a community, while opponents claim that the casino will attract insular communities of foreign-born workers seeking low-wage jobs that locals will spurn. Whichever case is true, a boost in population will offset any positive gains caused by the casino's immediate impact on the unemployment rate.  The unemployment rate will instead change according to a complex set of other factors that have very little to do with the casino.

Crime

YES: Casino supporters claim that the casino will lower the crime rate, based on an assumption that putting people to work will lower the unemployment rate, which will reduce crime.

NO: Casino opponents claim that the casino will cause an increase in crime, based on an assumption that the casino will raise the unemployment rate, which will increase crime.

As is the case with jobs, we find that the casino will both create and eliminate certain instances of BOTTOM LINE: crime in Oxford County. Ultimately, we find that there will be a net increase in crime. There will be a minor increase in crimes that are directly related to the casino, such as minor incidents of theft and violence on the casino's premises, and cases of drunk driving caused from those who will drink at the casino and then drive home. The bigger impact on the crime rate will be due to shifts in the local economy. Those who can afford to lose money will simply skimp elsewhere. Those who cannot afford to lose the money they wager at the casino will have put themselves into a desperate situation, which will, in some cases, lead to criminal acts for profit, or violent acts that will be the end result of financial stresses.

At the same time, the casino's presence will have a positive impact on the crime rate in other ways. A minor positive effect will be felt by those who find jobs at the casino, which will alleviate their financial burdens. More significantly, Oxford's casino-based revenue stream will be spent, in part, on an expanded police force that will help to deter and deal with all sorts of crime.

Economy

YES: Casino supporters claim that the local economy will be dramatically strengthened, as they see vast amounts of money being brought into the local economy by those from out of state and other areas of the state.

NO: Casino opponents claim that the local economy will be dramatically weakened, as they see vast amounts of money being transferred out of Oxford County in the form of lost wagers.

BOTTOM LINE: We find that the impact on the local economy, as measured by unemployment rates, average earnings per household, and average property values will be minimal.

While the overall impact will be relatively small, there will be a significant redistribution of wealth within the community. The casino's supporters estimate that approximately $89 million dollars will be lost to the casino's gambling operations by resident Mainers. A few people at the top of the casino's structure will make millions. A few dozen will make hundreds of thousands of dollars. A few hundred will make a decent, living wage. But, according to the casino's academic study, the casino will generate over 800,000 visits from residents of Maine, each of whom will lose an average of $70 to $100. We don't know how much of that money will come from within Oxford County, as opposed to other parts of Maine, but it is safe to say that a significant number of dollars will be subtracted from the lowest rungs of the economic ladder. The sharpest negative effects of the casino will be felt by the lower-middle class, and the poor.

Problem Gambling and other Social Issues

YES: Casino supporters say that social problems associated with casino gambling simply don't exist.

NO: Casino opponents says that casinos bring spikes in divorce rates, spousal abuse, depression, suicide rates, bankruptcy, and addictive gambling.

BOTTOM LINE: We find that the casino will not significantly impact rates of divorce or suicide. We do find that the casino will increase the level of gambling addiction in the area, as well as increasing area bankruptcy rates. We make no prediction as to whether incidences of spousal abuse or depression will increase.

The number of gambling addicts in a community tends to be relatively small, at somewhere below two percent of the populace in a non-casino county, and below four percent in a casino county. We find that the number of active gambling addicts will increase, for two reasons. First, the casino's presence and marketing campaign will lead to a relaxation of social mores against gambling in the community. Second, the easy access to a uniquely exciting, social, and sophisticated form of gambling will create more problem gamblers. These gamblers will create societal costs that will be borne by their families, governments, businesses, and acquaintances.

We find that there will be an increase in Oxford County bankruptcies of approximately 10 percent in the year after which the casino opens its doors. The increased impact will fade over several years, and then increase again in a cyclical effect described by analysts Goss, Morse, and Deskins in a 2009 study.

Intangibles

YES: Casino supporters say that the casino will fit nicely into Western Maine's patchwork of tourist attractions, nicely complementing wholesome family fare such as ski resorts and the Oxford Plains Speedway.

NO: Casino opponents say that the casino will negatively impact the quality of life in Oxford County by transforming the quaint and historical character of the area into a blighted area devoid of charm.

BOTTOM LINE: We find that the answer to this question is largely in the eye of the beholder. The casino will serve as an added tourist attraction to the area, and will appeal to some who value the idea of an exciting, centralized, centerpiece attraction that will be known throughout the state and New England.

For most of the county, the casino will not directly hurt the diverse patchwork of elements that make the area a charming, vibrant example of New England life. The casino will not knock down any historic buildings, wipe out the farmers' markets, or reduce the membership of local churches. The arts community will continue to thrive, as will the spaghetti suppers, the school plays, and the local fairs. As far as these enterprises, and the 1001 other elements that contribute to the local quality of life, are concerned, the casino will be an invisible enterprise at the south end of Oxford.

However, the presence of the casino will significantly alter the perception of the town of Oxford, by those inside and outside of the community.

Ultimately, the casino will represent a major shift in direction for the town. If voters vote yes on November 2, the town's fortunes and identity will be inextricably linked with the casino. In the future, other areas of the state will know Oxford primarily as the home of the casino. The casino will be the biggest player in the town's economy, and if its profits are threatened by new casinos in the region, or other changes in the economic climate, the town will be obliged to do whatever it can in order to prop up the enterprise, which would mean directing municipal resources to the casino at the expense of other residents.

The casino question will not be a quick-fix solution to the region's economic or employment woes. Rather, it will be a long-term decision that will determine what kind of community area residents want to hand down to their children. Some parents will see the casino as a potential employer of their children, which could make the difference between their children staying in the area or moving away. Others will see the casino as a black cloud of vice casting a dark shadow over an otherwise wholesome community.

Ultimately, the full and total impact of a casino on the local community is unknown. The only way to get a true accounting of the impact on the economy, crime rate, and quality of life would be to commission a comprehensive impact study. This study has not been conducted by anyone − not the casino's investor group, not the casino's opponents, and not the state, county, or local governmental officials that have become embroiled in the debate.

We recommend that voters take the time to educate themselves about the likely impact of the casino, and measure that impact against their own beliefs and values about what is important to the local community. The definitive analysis has yet to be conducted. If the state feels lucky, it will choose to roll the dice in Oxford County on November 2 at the polls.