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Recent Study Suggests that Casino Gambling has a Positive Economic and Community Impact

19 April 2000

By David Waddell

Recently, the northern Michigan community of Corwith Township commissioned a casino impact study which was performed by Michigan Consultants, a Lansing firm. Corwith Township is just north of Gaylord and was struggling with the decision of whether to welcome the Bay Mills Indian Nation into the community to build a casino. Township officials commissioned the study to provide an "independent analysis" of the potential murk and to analyze "community impact issues."

The decision of whether or not the casino proposal should be endorsed is a difficult one. Many Corwith Township residents enjoy the peace, quiet and serenity of the area as it currently is. They worry about increased traffic, housing problems and light pollution (ruining their clear view of the night time sky). Eager to preserve the quiet, many of the residents have looked to the anti-gambling groups for arguments that they can make against the casino. Late last month, Township officials weighed and balanced all the pros and cons, and by a vote of 4 to 1 adopted a resolution endorsing the Bay Mills Indian Nation proposal. There are still many more hurdles for the Tribe to overcome, but local support will be a key factor in moving this project forward.

The Michigan Consultants' study that the Township commissioned provides some very valuable insights into the benefits that communities enjoy when casinos are built.

The study reflects that for every job created in a casino, the economic spin off creates another full-time position. It projects that the casino project would then lead to over 2100 full-time jobs in the region. It also notes that the project will produce 400 employee years of construction work.

The study conservatively estimates local government revenue from the casino at over $1 million annually and contrasts this positive income stream with the economic tax abatements that communities normally have to provide to attract new business.

The most interesting aspect of the study is its analysis of some of the other impacts that casinos have. Noting that in Michigan we now have over a ten-year history of tribal gaming, the study notes that it has a "solid historical base" to evaluate community impacts. With this solid base of information, the study reported the following:

"Land values: A review of 5 northern Michigan counties hosting casinos finds that overall land values have increased at a far greater pace than the state average.

"Crime: A review of the host counties finds that injuries due to crime in counties hosting casinos are lower than the state average.

"Problem gambling and bankruptcy: There are individuals who possess compulsive gambling tendencies. Most studies place the active figure between 0.5% and 1.0% of the population, although many of these individuals also possess other forms of self-destructive behavior. The report notes that in the area there already exists numerous gambling options. It would be questionable whether preventing a casino from opening in Corwith would prevent these individuals from gambling. It is suggested that any agreement with the tribe assure proper funding of local mental health programs.

"Housing and growth: A casino will likely create an increase in demand for new housing. The key aspect to appreciate is that the Township and the County, through their planning, zoning, permitting, and land use regulations, can retain a large degree of power over whether or not new subdivisions or apartments are built.

"Impacts on the general business environment: The casino would be a major purchaser of goods and services. These dollars provide a significant business opportunity for existing and new firms. It will also help retain existing tourists that might otherwise be attracted to other counties that have casinos. Local businesses may need to compete more for employees, but this is typically a sign of a good economy. Many businesses will offset any increase in wages paid by the additional business brought to community by the casino.

"The anecdotal information from Detroit and Windsor is intriguing. During the period after approval of casinos in these communities, both General Motors and Compuware have chosen downtown Detroit as the site for their new world headquarters, and Chrysler Canada has chosen downtown Windsor."

The Michigan Consultants' study demonstrates that there are many benefits associated with the opening of a casino. For communities seeking to spur economic growth, casinos provide a low cost economic tool. Economic growth brings with it many changes. Thus, it is wise for the Bureau of Indian Affairs to carefully weigh the opinions of small communities where casinos are being proposed.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

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