Gambling in the future
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Sandra Tolliver can be reached via e-mail or at 412-320-7829.
Experts say the casino's design and location largely will determine whether residents derive enough economic benefit from the business to tolerate its traffic, parking congestion and effects on the city's leisure activities.
"The impact is overwhelming. The traffic's going to be terrible, wherever it is," said Donald McGhie, a former executive with Bally's Entertainment Inc., operator of several casinos and now a consultant in Reno, Nev.
Except for the certainty of crowds, business and civic leaders are unsure how gambling will change the city over time.
Many assume it will increase police and paramedic calls, infrastructure maintenance and demands for social services for gamblers and their families. But the city and Allegheny County each would get 2 percent of the house win. Experts predict the casino -- expected to open with 2,000 to 3,000 machines -- will retain $200 to $240 per machine every day, after payouts to gamblers.
A freestanding slots casino will employ at least 1,000 people, including senior managers, McGhie and other consultants said. That number would increase substantially if a hotel, spa or other accompanying facilities were built.
Salaries for the casino jobs -- involving slot machine operations, food, drinks and other services -- will range from $22,000 to $65,000, said Jon Stanewick, a compensation analyst with Salary.com, a Needham, Mass., company that based its calculation on economic conditions in Pittsburgh and average salaries at casinos in Atlantic City, N.J., and Detroit.
Some in Pittsburgh fear gambling would alter people's work ethic and values. Money has a purpose, but should be spent sensibly, said the Rev. Frank Almade, pastor at St. John Vianney Parish in the city's Allentown neighborhood.
"It's a means to the end, and what are the ends? Family, community and the needs of the poor, in that order," Almade said.
The July law legalizing slot-machine gambling authorized seven casinos at horse-racing tracks and five stand-alone casinos -- including one in Pittsburgh and two in Philadelphia -- each with up to 5,000 machines. Two resorts will get slots parlors with 500 machines each.
Casino operators will keep 48 percent of the profit from their operations. In addition to the state's 34 percent cut, 9 percent will go to the horse-racing industry to boost purses and 5 percent to a fund for development projects in Pittsburgh and Philadelphia. Cities and counties hosting casinos each will get 2 percent.
Enthusiasm about the coming casino varies among Pittsburgh businesspeople, but most hope it becomes an entertainment asset that doesn't hurt existing restaurants, sports venues, theaters and museums.
"Whether you're for or against it, I think the economic impact would be significant," said Rich Benyon, president of Benyon & Co. Insurance and Real Estate, Downtown. "You have the ability to bring people in from a wide radius."
That's true in other cities where slots and other games of chance were legalized years ago. Officials in North Kansas City, Mo., and Biloxi, Miss., for example, say taxes on casinos have helped those cities to replace sewers and sidewalks, renovate schools and build libraries and community centers.
"We have had virtually a renaissance in the city," said North Kansas City Mayor Gene Bruns.
"It's been a blessing for our area," said Chevis Swetman, chairman of The Peoples Bank in Biloxi. "Gaming brought us back to life. I've always looked on the casino industry as economic development, pure and simple."
Bill Thompson, professor of public administration at the University of Nevada, Las Vegas, produced a 2003 report for Gov. Ed Rendell predicting that each slot machine in Pennsylvania's casinos would take in $200 to $240 every day of the year. The state has authorized up to 61,000 slots at 14 locations.
"You can't deny they'll make a lot of money and the state will get a lot of tax money from the machines," Thompson said.
But he and other consultants -- as well as gambling opponents -- warn that Pennsylvania's economy might suffer in the long run. They predict that although a freestanding casino will bring the Pittsburgh region tax money, hundreds of jobs and potential for spin-off business, it's likely to attract only a small percentage of gamblers from bordering states.
"The money's going to be gambled by Pennsylvania residents," Thompson said.
What's more, most slot machine manufacturers are located in Nevada, where the Pittsburgh casino's operator also might be based. That means some of the casino's money would be sent out of state. Pennsylvania's 34 percent tax on the industry is high, compared with other states, and that could cause casino operators to concentrate on making a profit and not on investing in the community, Thompson said.
In Philadelphia, Mayor John Street has begun appointing a volunteer task force to consider how the casinos will affect businesses, transportation and land use. Pittsburgh Mayor Tom Murphy hasn't done that, but is "looking at ways to participate in the process," spokesman Craig Kwiecinski said.
Pittsburgh's casino likely will require a 100,000-square-foot building and several thousand parking spaces. A site hasn't been chosen; potential developers will present proposals to the state's regulatory Gaming Control Board, which has just started hiring staff and won't consider applications for months. The casino license will cost $50 million.
The location of Pittsburgh's casino, along with its style and the way it is marketed, will contribute to its success, said Sanford Rivers, of Churchill, a member of the gambling board. Rivers hopes it's a development that lures regular customers, who also then spend money in shops and restaurants.
"I think the quality of the venue really determines how frequently people visit," Rivers said. "That's the paramount issue. It's going to be the ambience of that facility, in terms of what they have to offer in addition to gambling, and the ease of access, the comfort level."
The law gives the gambling board control over casino locations, bypassing local zoning codes, but provides a 60-day comment period before an application is approved or rejected.
Pittsburgh Councilman Gene Ricciardi, who represents Oakland and the South Side, worries that a casino could "dramatically affect our quality of life here." He wants to ensure that it isn't built in a residential neighborhood and hopes it doesn't cause people to stop spending money at established businesses by gambling instead.
"No matter what people say, it's going to be self-contained," Ricciardi said. "But now that it's legal and it's going to happen, we have to do everything we can to make it work. We want new money coming in. We have much more to offer than gaming."
Marilyn Coleman, executive director of ProArts, an arts service organization, said Pittsburgh's arts community has strategically developed the Cultural District through a decade of public and private investment and hopes gambling doesn't change that. In the best-case scenario, the casino's operator will contribute money to arts organizations, she said.
Labor unions look forward to the creation of construction jobs and intend to organize workers at the state's casinos, said Ed Nassan, president of Pittsburgh's Local 57 of the Hotel Employees and Restaurant Employees Union, which represents workers at other entertainment venues.
"We're going to try to keep all the (Pennsylvania) casinos under one contract, so the competition's equal," Nassan said.
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