Making the News

Allentown Morning Call

Originally Published:Sunday, August 19, 2007

Michael Pollock, managing director of Spectrum Gaming Group of Pennington, N.J., said gaming, if well-managed, can function as an economic engine, driving other businesses to grow. ''If coordinated by the government with existing tourism, it can work,'' Pollock said.

Expert warns of murky residue from gambling
But industry consultant says slots, coordinated with tourism, can spark growth.

By Nicole Radzievich
Allentown Morning Call

Likening the Lehigh Valley to a bathtub, two experts said Thursday gambling could either fill it with money or drain cash and businesses from the community to faraway places such as Nevada.

University of Nevada-Las Vegas professor William N. Thompson said he expects a $175 million drain on the local economy if slot machines come to Bethlehem.

''Get real, Pennsylvania,'' he said at a breakfast forum in the city.

But Michael Pollock, managing director of Spectrum Gaming Group of Pennington, N.J., said gaming, if well-managed, can function as an economic engine, driving other businesses to grow.

''If coordinated by the government with existing tourism, it can work,'' Pollock said.

The competing views were presented in the last of the Greater Lehigh Valley Chamber of Commerce's three-breakfast series on gaming. Thursday's breakfast was sponsored by the Lehigh Valley Convention and Tourism Bureau.

The series came as developers are floating four proposals including slot machines in the Lehigh Valley in the wake of the Legislature allowing as many as 61,000 slot machines at 14 locations statewide - seven at horse racetracks, five at stand-alone slots parlors and two at resorts.

The highest-profile proposal so far has been for a slots parlor at the 120-acre retail and entertainment project planned for the former Bethlehem Steel site that would be run by Las Vegas Sands.

Other slots parlor proposals in the Valley are one by the Isle of Capri Casinos of Biloxi, Miss., at a site in or near Allentown and another in Bethlehem by the Mashantucket Pequot Tribal Nation, owner of the Foxwoods Resorts and Casino in Connecticut, and developer Lou Pektor.

In Palmer Township, a group known as 100% Purses has proposed a horse racetrack with slot machines called Freedom Park.

Before a crowd of 100 community leaders and business people, Thompson lectured that money does not grow on trees, but rather, comes from people's pockets.

Thompson, a political scientist who has written numerous books on the gambling business, said to think of gaming as a bathtub: Casinos bring in money and fill up the bathtub. In Las Vegas, it fills up so high that you can't see the dirt ring. But in other places, the tub has leaks and the money doesn't stay in the region.

''In the Lehigh Valley, will the bathtub leak or will it hold water?'' he said.

According to his analysis of the state statistics, 75 percent of the Valley's tub - about $217.8 million - would be filled by gamblers from the Valley and the surrounding areas. But much of the money would leak to communities outside the region. He figured $145.5 million would stay in the Valley, funding local taxes, salaries and buildings. That would mean $72.3 million in slot revenue from local gamblers would be stripped from the local economy to pay for state taxes, casino profits, Las Vegas-manufactured machines and other supplies.

There also would be an indirect economic loss of businesses that cannot survive in such an environment, he said, calculating the total direct and indirect economic loss at $175 million.

Then come the social costs: prisons for those who steal to support gambling addictions and social programs to help compulsive gamblers.

''Does the bathtub hold water?'' Thompson asked. ''It does in Vegas. I don't think it will in Lehigh and Northampton [counties].''

Pollock, who has analyzed the New Jersey casino industry since its inception, has been retained by casinos to conduct development feasibility studies and publishes a national newsletter on gambling, tempered the darker view of gambling by saying Pennsylvania needs to have ''realistic expectations'' of how much money will come. Gambling will not solve the economic woes of a community, but if it is set up properly, he said, communities can make it work.

''If you are able to attract capital investment, you can patch up some of the leaks in your bathtub,'' he said.

He explained that, over time, gambling helped pull Atlantic City from decay in the 1960s to a city that boasts $8 billion in construction from casinos alone.

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