By DERRICK GINGERY, Greater Fort Wayne Business Weekly
derrickg@fwbusiness.com
City officials are researching the possibility of expanding gaming in Fort Wayne at a time when the industry has been wounded by the recession and is concerned about increased competition - and which may or may not provide all of the economic-development benefits officials envision.
Mayor Tom Henry said Dec. 12 he was directing staff members to research the gaming issue after several groups came to city officials with ideas for gaming facilities. No specific proposals have been received, but ideas include moving an existing casino license to Fort Wayne, creating a new casino license or adding gaming machines to an existing local facility.
Given an expected city budget crunch, Henry said it would be irresponsible not to consider gaming proposals because of the potential revenue they could bring to Fort Wayne. He said the city will consider any viable proposal, but he has not taken a stance on the issue.
"At this point, we're simply listening to them," he said.
Northeast and west-central Indiana are the two areas in the state without a casino. Michigan City's Blue Chip Casino and Hotel and the Hoosier Park Racing and Casino horse track in Anderson, which now has slot machines, are both more than an hour's drive from downtown Fort Wayne.
Hoosier Park owns an off-track betting facility off Lima Road in Fort Wayne.
Indiana casinos employ about 16,000 workers, according to the 2007 American Gaming Association Survey of Casino Entertainment, with more hires expected. Blue Chip conducted a job fair Dec. 17 in preparation for its expansion.
Including tips and benefits, casino workers made $609.5 million, according to last year's survey.
One argument for a gaming facility is the potential for generating more revenue for Fort Wayne. Casinos pay taxes to the state and the cities and counties where they are located. A 2004 analysis of local direct tax revenue from casinos by the Center for Urban Policy and the Environment at Indiana University found nearly half of the tax revenue that went to cities and counties came from a wagering tax, which is based on casinos' revenue, and the rest came from casino admissions taxes and property taxes.
After a riverboat casino opened in Rising Sun, the community was able to build and staff a community health center. The community did not have a doctor in town prior to the casino's arrival, according to the center's report.
Lawrenceburg used casino revenue to build new fire stations and senior housing, and purchase computers for schools and government. Casinos also have contributed to local charities and sponsored community events.
Rob Young, president of the Fort Wayne-Allen County Economic Development Alliance, said the group has not decided its stance on whether to expand gaming in Fort Wayne. He said gambling is not considered one of the Alliance's traditional economic-development activities, but it is significant because of the potential revenue for infrastructure and other public projects that could be generated.
The Greater Fort Wayne Chamber of Commerce also has not taken a position, except to say it would remain involved in discussions with community leaders and project developers. Kristina Holmes, vice president of communications and members relations, said in an e-mail message the Chamber wants to see the full potential economic impact of the casino, but it is supportive of economic development, downtown revitalization and job creation from private investment.
But not everyone agrees on casinos' economic benefits. Thomas Garrett, a senior economist at the Federal Reserve Bank of St. Louis, concluded in an article published in the agency's Winter 2002-03 publication that casinos are not necessarily a sure win for a community.
"Although economic development is used by the casino industry and local governments to sell the idea of casino gambling to the citizenry, the degree to which the introduction and growth of commercial casinos in an area leads to increased economic development remains unclear," Garrett wrote.
He wrote that a casino's effect on local retail sales may not necessarily be positive. If the bulk of a casino's customers are from the local area, retail sales at other venues in town may be negatively affected because residents take money they would have spent at stores and restaurants and spend it at the casino.
If the casino were part of a tourist attraction, attracting visitors from outside the local area that would spend money outside the casino, then retail sales could be expected to improve, Garrett wrote.
Dan O'Connell, president and CEO of the Fort Wayne-Allen County Convention and Visitors Bureau, said it was too early in the process to comment on a casino in Fort Wayne.
"We have talked about it, but have not formulated policies," O'Connell said.
Gamblers have left blackjack tables and slot machines at casinos across the state and nation as the economy slipped into recession. Indiana tax receipts from casinos have increased overall, but taxes paid per facility dropped more than 9 percent through November compared to the same period last year.
Casino admissions also are down nearly 6 percent through November compared to last year, according to Indiana Gaming Commission reports.
Nevada reported a 22-percent decline in casino revenue, and Clark County, which includes Las Vegas, saw a 24-percent decline in October, according to a Bloomberg News report. Atlantic City, N.J., gaming officials reported a 7.8-percent decrease in casino revenue in November.
A casino in Fort Wayne would lead to increased competition to attract gamblers. Blue Chip Casino saw revenue and admissions decrease substantially this year, according to gaming commission reports. Admissions decreased 21 percent through November from the same period last year. Total taxes paid also was down 31 percent compared with November 2007 year-to-date reports.
Ernest Yelton, executive director of the Indiana Gaming Commission, wrote in the agency's 2008 annual report that economic pressures likely affected all of the state's casinos. But the opening of a casino in New Buffalo, Mich., about 14 miles from Blue Chip, created more competitive pressure for the Michigan City facility, Yelton stated.
Mike Smith, president of the Casino Association of Indiana, said there has to be some consideration of how much gambling the market can accommodate. Smith said the group would not issue a position on a new Fort Wayne facility unless it affects a majority of the association's members.
Las Vegas-based Boyd Gaming Corp., owner of Blue Chip Casino, has already stated its opposition to a casino in northeast Indiana. Spokesman David Strow said Fort Wayne is a significant feeder market for the casino, but could not provide specific figures.
Strow said aside from competitive issues, there may be other hurdles facing a Fort Wayne casino, namely money.
"This is a little more complex an issue than creating a license," he said. "The reality is there simply is not a whole lot of credit to pursue resort projects of this type. It may all be a moot point."
Henry said he did not plan to use city dollars to help finance a casino project.
"... We welcome plans for any new business venture that creates jobs, grows our economy and enhances our community," he said during the Dec. 12 press conference on gaming.