The study discussed above for the city of New Orleans can act as a prototype for any study that is done at either local or national levels. Included in an Appendix to this testimony is a complete copy of the proposal for the New Orleans study. There are, however, some important factors that must be considered in studying the impacts of casino gambling on a national level.

First, one must be fair to treat the gambling industry like others. From an economic point of view, from the viewpoint of the national economy, many of the impacts of gambling described above are also impacts of other service or retail firms as they come into an area. If a new restaurant comes into a market, its success generally involves diversion of dollars from other restaurants or other retail firms. This process is the nature of a market economy. The second restaurant will only survive if the consumers prefer it to the others in the market. The could very well be a difference in the secondary or social impacts of a casino compared to a restaurant and these should be the focus of any national study, not the normal market impacts of any new industry.

Second, many of the positive economic impacts of casino gambling apply only in a local market context. In a local context, casino gambling will have a net positive impact on the economy only if the casino brings in additional visitors to the local economy or if the casino keeps local residents who want to gamble in the local market. Obviously, neither of these will be a factor in the national context. Note that the only exception to this relates to the ability of the casino to attract foreign visitors or to keep Americans home to gamble. Much of what is counted as the positive impact of a casino in the local context will not be positive in a national

context. It will simply involve the transfer of spending and wealth from one part of the country to another. Again this is a natural part of the normal free-market

economic process and requires no national study.

Finally, it is perhaps only a national study that can look at the true affects of casino gambling on political corruption and problem gambling. State and local governments are generally not in a position to scrutinize themselves. If local or state officials have become corrupted, they will not generally allow for open study of that corruption. This is a role that the federal government through the FBI has taken for years. With respect to problem gambling and its impact on the economic and social fabric of the country, it can perhaps only be studied from the national level. At the local level, we are generally analyzing the marginal impact of one new form of gambling. It is very difficult to separate the marginal impacts of the new form of gambling from the impacts of the existing forms of gambling. Only by taking a global perspective can we get any insight into the magnitude of this problem, if it is a problem.

APPENDIX

A PROPOSAL TO STUDY
THE EFFECTS OF

LAND-BASED AND RIVERBOAT
GAMING IN NEW ORLEANS

Submitted to

The City Planning Commission of New Orleans

By

The University of New Orleans

in partnership with

Dillard University,

Loyola University,

Southern University at New Orleans,
Tulane University,

and

Xavier University of Louisiana

March 17, 1995

INTRODUCTION

As of November, 1993, gaming became legally available in the City of New Orleans in the form of riverboat gaming. During 1994, more riverboats came on line, and 1995 will see the addition of land-based casino gaming at the temporary casino site in the Municipal Auditorium, while the permanent land-based casino is under construction.

The size and economic strength of gaming activities in New Orleans are unprecedented in the United States. Never before has gaming been introduced in so large a City with a thriving tourist trade and a diverse employment base. The implementation will, undoubtedly, provide considerable benefits for New Orleans businesses and residents. Ilowever, there are certain to be significant costs as well. In a move to understand the total impact of gaming, the City Planning Commission authorized a study to develop a plan to analyze the effects on a variety of factors within the City of New Orleans. This report is a proposal to conduct a comprehensive five-year research plan to carry out the ultimate study goal of assessing the total impact of casino gaming on the City of New Orleans.

It is the intent of the Research Team presented herein to monitor and analyze various aspects of direct casino operations as well as their direct and indirect impacts on a variety of economic, social, and governmental factors in the City of New Orleans. In particular, information on gross revenue (win), admissions, gambling space area, and some important summary ratios for both land-based and riverboat casinos will be assembled, tabulated, analyzed, and presented for public discussion. In addition, similar data for other gaming venues both inside and outside Louisiana will be offered for comparison. Further, the cffccts of gaming will be evaluated with respect to changes in the structure of the local tourism industry, the City economy, City government finances, the minority community, the extent of pathological gaming among residents, crime patterns, real estate valuation, and land use. To obtain a complete understanding of these effects, a five-year study period is proposed.

The Research Team will specifically address five distinct, yet correlated arcas of study, termed tasks. Task I will analyze the effects on tourism, existing business activities, minorities, and government revenues and finances. Task II will monitor pathological gambling. Task III will study the effects on crime rates in the City. Task IV will deal with real estate and land-use impacts. Finally, Task V will examine the effects of gaming on public facilities and services. In addition to specific assignments carried out with the discrete tasks, some multi-task support activities will be provided.

Two primary data gathering efforts, conducted annually, a survey of New Oricans residents and a survey of New Orleans businesses, will provide data for more than one of the major tasks contained in this proposal. The survey of residents will provide information to monitor New Orleanians' perceptions of economic well-being, tourism, crime, quality of life, and other social factors and the effects of gaming upon those perceptions. The results will contribute heavily to the crime analysis task. In addition, the response will provide valuable input into the analyses of overall economic conditions, minority economic and social well-being, and