Making the News

The Day, New London

Originally Published:Saturday, June 27, 2009

State's Distribution Of Casino Revenue Faulted In Report
Towns frustrated, findings suggest 'regional approach'

By Brian Hallenbeck
The Day, New London



While documenting the tribal casinos' undeniable impact on Connecticut's economy, a report released Friday also finds that the state fails to distribute its share of the casinos' revenues in an equitable way.

Titled "Gambling in Connecticut: Analyzing the Economic and Social Impacts," the report recommends the state address the negative effects Foxwoods Resort Casino and Mohegan Sun have on the towns closest to them.

"It cries out for a regional approach," said Michael Diamond, vice president of research for the Spectrum Gaming Group of Linwood, N.J., which prepared the report. "What affects municipalities doesn't stop at their boundaries. We found there was tremendous frustration on the part of the towns. We point out that other casino jurisdictions have set up separate funds for specific local impacts."

GAMBLING IN CONNECTICUTSome findings of the Spectrum Gaming Group's nearly 400-page report on gambling's economic and social impacts:



  • Although Foxwoods Resort Casino and Mohegan Sun have been an economic juggernaut, there is a serious need to diversify the work force in southeastern Connecticut, now dominated by service-industry jobs.


  • In promoting tourism, the state has failed to fully integrate gaming, resulting in lost opportunities to enhance revenue. Spending by out-of-state residents - about half the casinos' customers - has not been fully leveraged.


  • The absence of effective regional government has made it difficult for communities to address the effects of gaming, an issue the state formula for distributing casino revenue to municipalities does not address.


  • The state has failed to collect from the Mashantucket Pequot and Mohegan tribes all of the costs associated with regulating the tribes' casinos, meaning taxpayers are picking up the tab.


  • Between 2001 and 2008, Problem Gambling Services, a division of the state Department of Mental Health and Addiction Services, has experienced a more than six-fold increase in its caseload. During that period, its funding, almost all of which comes from the Connecticut Lottery Corp., has increased 123 percent.
  • The report, conducted at the behest of the General Assembly, found that as of December 2008 the casinos poured almost $4.9 billion in slot-machine revenue into the state's coffers, of which state government kept $3.3 billion. The remaining $1.6 billion was distributed among the state's 169 cities and towns.

    Few in tribal, state or local government had digested the report and none was available to comment on it.

    Norwich hardest hit

    Diamond said Spectrum's research suggested Norwich has been the hardest hit of any of the towns within a 10-mile radius of the casinos, a list that also includes Bozrah, Franklin, Griswold, Groton, Ledyard, Lisbon, Montville, New London, North Stonington, Preston, Salem, Sprague, Stonington, Voluntown and Waterford.

    "Because it's close to both casinos it feels more impact," he said. "You take a town that's a hundred miles away, it can use all of its share of that money (from the so-called Mashantucket Pequot and Mohegan Fund) for property tax relief. But a town like Norwich has to use it for local (casino) impacts."

    And, in Norwich's case, the report points out, such impacts include demands on the school system resulting from an influx of non-English speaking students whose immigrant parents have been attracted to casino jobs. Many such workers, unable to find affordable housing, have converted single-family homes into illegal, unsafe boarding facilities. The city also has incurred extra police costs associated with casino-related traffic accidents and drunken-driving arrests.

    While noting that the casinos rescued the region from the effects of defense-spending cutbacks in the early 1990s, the report cautions that southeastern Connecticut again faces a serious need to diversify its work force.

    From 1988 to 1993, the report says, the region lost about 10,000 jobs, including nearly 4,800 in manufacturing. It lost another 10,000 manufacturing jobs between 1993 and 2003 while adding more than 20,000 service jobs, most of them casino-related. .

    The service-producing sector of the region's economy now employs eight of every 10 workers in southeastern Connecticut, the report says.

    Asked if the research had turned up anything startling, Diamond cited the increase in the number of embezzlements in the state since Foxwoods opened in 1992. That year, according to the report, state and federal law enforcement officials made 43 embezzlement arrests. In 2007, the last year for which statistics were available, the number was 214.

    "We don't pretend we captured every embezzlement," Diamond said. "For every case that makes the paper, there could be three or four that weren't reported. But anecdotally, that just seems like a phenomenal amount."

    The report found that the rate of problem gambling in the state was lower than reported in a 1997 study. It also found no evidence that poorer residents of Connecticut are more inclined to play the lottery than those with higher incomes.

    The report is posted on the state Division of Special Revenue's Web site.


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