Gambling’s fun,
When hard to find;
But once it’s common,
Never mind.
Casino developers have to plunk down a lot of their own chips these days. Few researchers doubt that risk-taking is hard-wired into a slew of human brains, but at what point does over saturation cause the developer to lose his shirt?
Reno is finding out. Now that California has overcome its moral qualms, casinos have sprouted up along some of the major routes leading out to Nevada’s historic divorce capital. Revenues there have fallen sharply.
Connecticut’s two monster casinos are in the same boat. Our long-time New England monopoly is eroding as New York, Massachusetts, and Rhode Island realize they’ve been played for suckers for too long. Now they, too, are promoting gaming.
This takes some fortitude during the Great Recession. Even the biggest casinos are laying off workers and state off-track betting parlors are gasping for breath. Philadelphia finally authorized two big venues, but it looks as though only one will achieve liftoff.
Sure, some people will always gamble. But nowadays, compulsive gamblers are cutting back on their food budgets. Not surprisingly, betting is down. Nonetheless, new projects continue to leap from the ground and future ones still germinate on drawing boards.
So far, financing isn’t a big problem. There always seem to be fat cats who long to invest in gambling. History has demonstrated that betting on human frailty is rarely a loser. Margins may be thin right now, but just wait until the economic sun comes out again. Investors will be in clover. This isn’t dotcom or real estate.
Well, maybe not. But the tech bubble imploded because of too many clever entries into the field, not because technology shriveled. Likewise real estate collapsed from overbuilding and sleazy credit, not because folks no longer needed a place to live or work.
So while we’re agreed that human lust for risk will not abate, who knows how many casinos or horse parlors a region can sustain?
In their hearts state regulators don’t really care. As long as the state is getting a piece of the take, what does it matter to them if some venues flourish and others fold? And if a state is not getting a piece of the take, it had better hustle up a new law.
As to the states’ own lotteries and off-track betting parlors, little investment is required to keep them going. So, they just continue grabbing whatever diminished amount they can from their storefronts.
For Indian tribes, just getting into the business is a no-brainer. Unless they already prosper from uranium deposits, coal seams, or a willingness to accept nuclear waste, what’s not to like about having other people invest their money in your casino to make you rich? It’s only once you do become rich that the trouble starts. Do you expand with your own earnings? Connecticut’s overextended Pequots are just now learning the hazards of doing that.
So are the big private investors. Their central problem used to be getting permits. Previously they paid the best lobbyists and the worst legislators to get them. Now their problem is competition for a relatively inelastic supply of wagerers. Everybody’s getting a permit, so gambling is no longer that special.
The world, particularly Nevada and New Jersey, is lush with old droopy casinos. That’s probably the direction our new glittery and swanky ones are headed, once anybody’s Uncle Nick can get a license.
