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Attack of the Killer Casinos

The Valley's arts organizations get ready to compete with casinos.

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Thursday, December 22, 2011
Photos courtesy of the Daily Hampshire Gazette
Eric Suher and Senator Stan Rosenberg

It’s all but a done deal: a casino will soon be part of the landscape somewhere in Western Mass. With casinos come big-name entertainers—primarily musicians and comedians—and competition for audiences and discretionary dollars. In a region full of arts organizations, the arrival of a venue with such a big footprint is bound to have an impact. It is, in some ways, analogous to an entertainment big box, a competitor dealing with budget numbers bearing a lot more zeros than those of the Valley’s many smaller arts and entertainment organizations.

Currently, three bidders for the right to open a casino have stepped forward, offering proposals for Wyckoff Country Club in Holyoke, the old Westinghouse plant in Springfield, and a location in Palmer. Other bidders may still throw a hat into the ring. No matter the exact location, a casino’s impact on the arts scene is so clear that it’s explicitly addressed in the recently passed gambling legislation, as state senator Stan Rosenberg explained in a recent interview.

“We decided to be very aggressive on the subject,” Rosenberg says. “We included more provisions on this subject than I’ve seen in any legislation. Most states ignore the cultural impacts. I’m pretty sure it’s $4.5 million set aside each year to be used for major cultural venues in order to mitigate negative impacts.”

In the battle to pass gambling legislation, anti-casino activists raised the specter of local arts and cultural organizations suffering from the proximity of an entertainment behemoth. Now that legalizing gambling is a fait accompli, the level of concern varies among Valley arts institutions.

Bob Cilman, director of the Northampton Arts Council, says that while he is unsure what will happen, he doesn’t think his programming is likely to be deeply affected—that audiences for Arts Council events are unlikely to be drawn to the big-name brand of entertainment at a casino.

“I think it’s a bigger threat to more commercial art,” says Cilman, “especially stuff at the Calvin, if [a casino] is like Foxwoods or Mohegan Sun. Look—we’re a local arts council. I don’t think it’s going to hurt the stuff we do in Four Sundays in February, or the kind of art we support in the [Mass. Cultural Council] grants. I don’t think it’s a threat. But who knows? These things come and they take on a life of their own. Who knows how it will affect people’s habits?”

On the other hand, he says, “I think it can wreak havoc in a place like Holyoke, where people are living on the edge and they think about a quick hit from a casino.”

Some of Amherst’s larger institutions express a similar ambivalence. Sandy Soderberg, who handles public relations at Amherst’s Eric Carle Museum, says, “It’s not something that we really can measure, and it could bring more people into the area, bring more people to the museum, but we’re not sure. We’ve heard that the biggest impact is going to be on institutions that do live performance, that it would be difficult for them to compete and bring in big acts when casinos are giving away tickets and such.”

At UMass’ Fine Arts Center, Shawn Farley says, “We are somewhat concerned, but not overly. We’re getting hit just because of technology—that’s more our bugaboo than the casinos. Casinos tend to do the more popular acts that the Calvin, I would think, would be concerned about, and Mullins Center. But the ballet, jazz, chamber—although they probably will do some popular jazz stuff—probably not so much, because they’re not big money-makers. We’re more about community engagement as well. We tie that in [via] educational events with our performances. Although casinos could be an issue with people’s discretionary income. But it’s not a huge issue.”

Ask organizations in Hampden County and the answers are different. In Springfield, Brian Hale has long been engaged in the ambitious project of bringing the old Bing Theater back to life as the Bing Arts Center. For organizations like his, organizations struggling to revitalize a neighborhood through the arts, discretionary income looms larger. At present, the Bing hosts performances and classes in the relatively small but renovated lobby area; the renovation of the main theater space is the eventual goal.
“We’re small, but we’re working hard to garner the funds to finish the project and be the venue we want to be,” Hale says. “My concern—as I would guess most people would say—I see the casinos as just big cash vacuums. That’s my concern. I run a small business, too, and my feeling is, our society does best when we have a wealth of small business.

“We’re a similar size to the Majestic, half the size of the Calvin. I don’t see [casino competition] as a positive thing. I’m concerned. Based on what we’re doing now, it’s not probably going to have a huge impact.

“I think it’s going to hurt us... in terms of people having money to spend on the arts,” he says. “We’re trying to network with other little businesses in Springfield—at the X, there’s some nice restaurants and shops and a new business assocation. We’re working together to promote the idea of dinner and a movie [at the X]. I feel like we’re getting a little traction, finally. It’s the kind of thing that needs to be happening in communities.

“Speaking as a businessman, I work with other small businesses—we basically handle images and graphics and signs for other small businesses—and there just aren’t enough. Something that’s going to come in and sweep money away from small businesses I just don’t see as a good thing.

“You want people thinking more about the arts and networking and community and positive values, and to have this giant social dysfunction plopped down in the middle of you—it seems like a bad thing.”
Hale turns sardonic. “Maybe I could find the right person to talk to to get some slots in the Bing. Maybe we’d start having bingo. I can’t help but be flip.”

A local referendum would be required by the legislation if Springfield is the chosen site, so the battle might not be over there. Hale says, “I would speak up [against a casino] in public, but how much can you really do?”

*

All roads may point to the Calvin as the Valley’s most vulnerable venue, but the Iron Horse Entertainment Group doesn’t seem to feel that way. The Advocate submitted several questions via email for Eric Suher, and in a group of answers subsequently penned by IHEG Marketing Director Jim Neill on Suher’s behalf, there was no sense of impending doom. It was, however, clear that IHEG sees a casino as an issue.

“The bill attempts to address the community impact issue in several ways, some specific, some less so,” Suher said through Neill. “As for the content related to the live entertainment area of the arts, they’re supposed to ‘identify impacted live entertainment venues’ considering factors like distance, capacity, and types of performances and come to an agreement about ‘cross-marketing and coordination of performance schedules.’”

In answer to questions about IHEG’s potential plans, Suher said, “We have a lot at stake. We’ll stay true to our mission and our passions, bringing a wide variety of great entertainment tailored to all our assorted venues for the enjoyment of local residents as well as the tens of thousands of folks who travel here every year. We’d certainly compete as best we could, but ideally, if the entities are working together and both have a stake in the success of the town and the casino, booking can be done in a complementary rather than competitive fashion. The upside could be more shows and even bigger acts for customers to choose from, with as little conflict as possible.”

Robert Goodman, Hampshire College professor emeritus, longtime researcher on the effects of gambling in communities and author of the book The Luck Business, thinks discretionary income will become a big issue. When asked about arts institution directors who believe the difference in audience will serve as a sufficient buffer, Goodman said, “They will be very surprised if that’s what they are starting with, because arts people—they don’t understand the power, the financial power that these casinos will have to compete.”

Tina D’Agostino, interim president of Springfield’s CityStage, has already seen the result of Connecticut casinos competing for the talent she wants to book. “It has never been competition as far as drawing people in,” says D’Agostino, “but it impacts buying—making bids on concerts and comedy is where it impacts us the most.”

Not only do casinos have deeper pockets, but something called a “radius clause” often comes into play, too. Those clauses call for an entertainer not to appear elsewhere within a certain radius of the venue for a certain amount of time before and after an appearance.

“Our classic example is that we did very, very well with Jerry Seinfield—but every time we’ve chased that since, it’s been booked at a casino,” says D’Agostino.

It’s also problematic that casinos don’t exist to offer entertainment, but to bring gamblers to their tables. “Most times it’s a loss leader for them,” says D’Agostino. “They do it to bring people in, and we depend on the ticket sales. They are also offering a lot of complimentary tickets to their high-rollers.”

*

Casino opponents who fear the impact of gambling on the arts have had their concerns addressed by the legislature, at least in one respect. D’Agostino and others asked for mitigation funding in the legislation, something they got. When it comes to issues of competition for audiences and for performers, there are ways—albeit bureaucratic ways—organizations can appeal for relief.

Rosenberg explains: “If a venue has typically been able to book certain types of acts and now they can’t book them anymore because they compete… they can go the the Massachusetts Cultural Council and ask for funding to be able to match the offer for a performance by the artist. They could ask for money to do discount tickets to lower the ticket price for the performance of the artist—that would be another way to compete. There’s money sitting there so they can apply for direct assistance.

“There’s a second pool of money, about $1.5 million, that is intended to be more or less for smaller venues that have an idea about how to capitalize on the traffic that’s coming into the region, and they want to offer special events. It’s at the discretion of the council how they use it. They have some nexus to reasonable cultural mitigation.

“The third thing we did was require that every developer seeking a license has to negotiate a cultural mitigation plan with the cultural community in that region,” says Rosenberg. “An application is not considered complete without a cultural mitigation plan. The gaming control commission is supposed to monitor the execution and implementation of that plan to make sure that they are keeping to the plan. It’s an element that will be considered in license renewal—failure to meet the plan will result in a potential challenge to the renewal.”

He further explains that arts institutions can form a coalition to negotiate with casinos for further “mitigation,” like coordinating booking of entertainment.

It’s certainly helpful that legislators wrote into the bill methods to address booking conflicts and ways to capitalize on an increasing number of tourists. Yet increased tourism is only speculation, and competition for booking and audiences is only part of the potential problem, according to Goodman. He is not necessarily opposed to the gambling industry entire—he is a gambler—but he believes the effects of a casino would be quite different than what most politicians outline.

“I worked with a team of researchers at UMass, and wrote a book and did additional study with moneys from the Ford Foundation, the Aspen Institute and the MacArthur Foundation,” says Goodman. “There were two kinds of casino gambling venture we IDed. One is a tourist destination, primarily like Las Vegas, where people typically come for an average of about four days and spend money at other ventures, including arts.

“The other type is ‘convenience gambling,’” Goodman says. “There aren’t a lot of people flying into St. Louis or Tunica, Mississippi [to go to casinos]. They were shifting a lot of money out of local economies. …The major impacts in convenience gambling—what’s going to happen, since people are not likely to be flying into Palmer or Holyoke—most of [the gamblers] will be people from within probably a 50-mile radius of that casino, depending on where it is. A lot of that money is money that would have been spent on other discretionary services or products—restaurants, movies, theaters, music ventures, buying an additional shirt, a new car.”

Rosenberg believes that’s not a problem. “That is a fear for everybody who depends on discretionary income,” he says. “But the reality is that people who game in Massachusetts are already going to Rhode Island and Connecticut and New York and spending $1.2 billion. Those discretionary dollars are already being spent, and they’re spent out of state.

“Every study I’ve seen pegs the Mass. market at $1.8 billion. This offers the possibility of bringing those dollars back into the state,” he continues.

“The average person never steps foot into a casino. It’s a significantly more limited market than most people realize. The average person goes four to six times a year and spends $50 and has a meal. The rest of the time they are going to restaurants and movies. There’s this assumption that everybody is going to go gaming and spend every dollar they have. It’s just not the reality. We have one of the last lucrative undeveloped markets.”

Rosenberg also believes, though he doesn’t state it in the same terms Goodman uses, that Massachusetts casinos are likely to be tourist destinations, not just local draws. “The reason we’re pushing toward resort-style casinos,” he says, “is that we want the other $600 million [in revenue] to come from people traveling in-state rather than our own people. We have a very high probability of that because of the nature of our convention and tourism business. We’re at the gateway to America from Europe. This opens up a market.”

Rosenberg also believes that bringing back the $1.2 billion of discretionary income he says is leaving the state will have a ripple effect: “We’re hoping to get the $1.2 billion back in our own state, creating jobs and creating tax revenue, which creates additional discretionary income.”

“This is much more complicated and more sophisticated than most people recognize,” says Rosenberg, “and there are these very quick bumper-sticker phrases that people use, but the data and the reality do not match what these people are worried about. It’s a very very, different situation than most people recognize. If you go with the bumper sticker, then you’re going to come to easy answers.”

For his part, Goodman believes his research shows a less complex picture. “There isn’t anything special going on here,” he says. “The state is giving them something no other industry will have: a monopoly for the gambling industry. If you have the monopoly, you’re going to have a very secure source of income that no other industry has. You’re setting up an unlevel playing field. The arts ventures—I don’t know if they’re aware of this, but the only way they could be protected is to say [casinos] could not compete with them.”

Though the fate of Massachusetts’ arts protections obviously remains to be seen, Goodman, in taking a national look, has seen what can happen to such protections: “In New Jersey, when they put in casinos, the musicians’ union members were concerned they would use piped-in music, so they specifically wrote into the legislation that there would have to be live music. But years later, the casino industry went back to the legislature and said, ‘If we could pipe in music, we could bring a lot of money to the state,’” he explains.

“In Iowa, when they first were talking about legalizing riverboat casinos, the people in the arts said they wanted live music on the boats. They wanted to be able to see Iowa arts and crafts. So they agreed—a certain percentage of the boats was set aside for music and arts and crafts. Again, they went back and said, ‘If we could get rid of those things and bring in more slots, we’d bring a lot more money to the state.’”

Goodman also raises an issue no one else mentioned. “What you’re competing for is people’s discretionary time as well,” he says. “If you imagine opening up the Advocate and seeing a full-page ad for some major musician—it could be opera singers, rap singers, a dance company—if someone’s spending their time going to that, they don’t have the time to spend at the Academy of Music. The arts ventures in Noho are just scraping by. They don’t have the money to compete with these other ventures.”

Rosenberg seems confident that all will be well, that discretionary income won’t be drawn into a casino vortex through gambling addiction. “Do you know what percentage of gaming is problem gaming? Between 1 and 1.2 percent. Mass has the highest per-capita spending on the lottery in the country. We’re already at that level,” he says.

“It’s not like you’re going to have a huge percentage. If 100,000 people go into a casino, less than one percent of them are going to get addicted. Most of them self-correct as soon as they run out of money, or their livelihood is in jeopardy or their family situation is in jeopardy. There’s a very small percentage who lose everything. It’s not a good situation, but the majority of people who game do so minimally and responsibly.

“These things can be worked out. We were extremely aggressive [about mitigating the impact on the arts community], though there aren’t many studies and much evidence that there are universal negative impacts.”

Speculation is all that anyone can offer for now, of course, and every region that hosts casinos ends up with slightly different results. Hosting a casino is itself a gamble. All that remains is seeing how the numbers come up.

At Citystage, D’Agostino is making plans for the next steps. “We’ll need to meet again with the performing arts coalition that we formed during the legislation process, convene to determine what actually went through,” she says. “One of the things we’d hoped for is that we would have to work together [with a casino], where they would run things by the coalition. Wheter that’s going to happen remains to be seen.”

D’Agostino believes the mitigation funds are likely to help. On the other hand, she says, “We don’t want money to run organizations that are sitting here dark. Part of our mission is economic development, providing entertainment so people can come downtown to restaurants and businesses, park in the parking garage. I don’t want to sit here and present just 10 shows a year.”

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