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Miga--racino Myth vs Fact

Miga--racino Myth vs Fact

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Published by: jamesa612 on Mar 13, 2011
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REVENUE MYTH: The state will get $100 million in new revenue from the racinos, based on an estimated $365 million net win after payouts. FACT: The state will see little or no net gain in revenue. In a saturated gaming market like Minnesota’s, racino revenues will have to come from existing forms of gambling:
 About 80% ($292 million) will come from tribal casinos  About 20% ($73 million) will come from the lottery, pulltabs and

other entertainment and consumer spending. MYTH: The racinos will generate an estimated $365 million net win after payouts, with about $100 million going to the state, while wealthy track owners get a whopping $213 million. FACT: In order to generate a net win of $365 million from 3,000 machines, as Racino Now claims, each machine would have to generate $333 per day net win. Even Wynn Resorts in Las Vegas doesn’t achieve that, with an average daily win per slot machine of $251.

In Iowa, Prairie Meadows Racino, the model frequently cited by Racino Now proponents, only reports net wins of $193 million a year. Using estimates from the State of Illinois, the MN House Research Department suggests that the racinos are more likely to generate $44-98 million for the state.

JOBS MYTH: Racinos at Canterbury Park and Running Aces Harness track will create thousands of new permanent jobs.

FACT: Tribal casinos will be forced to lay off as many as 6,500 people working in gaming and government if the racino bill passes, so there will be no net job gain. Jobs will simply shift from rural Minnesota to the metro area, causing rural county tax revenues to decline and social service costs to rise. MYTH: Racinos will create hundreds of construction jobs. FACT: Tribal casinos will be forced to cancel or defer renovation and construction projects due to lost revenues; construction jobs will simply shift from rural Minnesota to the metro area.

HORSE INDUSTRY MYTH: A 2004 University of Minnesota study showed that Minnesota’s horse industry has a $1 billion economic impact on the state. FACT: There is no such study. The economic impact estimate came from a PowerPoint presentation delivered at a 2004 meeting of horse owners, and was based on Pennsylvania numbers, not Minnesota numbers. The presentation claimed that Minnesota has 150,000 horses, but the MN Department of Agriculture reports that there are only about 90,000 horses in the state. Only about 2% of them ever set foot at the state’s racetracks. MYTH: The racinos will “save” Minnesota’s horse industry. FACT: Minnesota’s horse industry is thriving. There are more horses in Minnesota now than at any time since 1982, and Minnesota horse farms today have more horses per farm than at any time since 1920. This could change if the racino bill passes. In Iowa, Harrah’s has offered the state $7 million dollars per year FOREVER if the state will allow the track to end live racing, which loses money (Omaha World Herald, March 18, 2010). Iowa currently requires that racinos operate live racing in order to qualify for casino licensure.

OTHER STATES MYTH: Expanding gambling has solved the budget problems of other states. FACT: Gambling measures have failed to solve budget problems as promised; in the majority of states, much lower than projected gambling revenues have forced more budget cuts and even more gambling expansion.

Pennsylvania has been forced to cut $161 million out of state programs because of a shortfall in projected slot machine revenues (January 8, 2010 Pittsburgh Post Gazette).

Since 2004, the year that slot machines were authorized in Pennsylvania, property taxes have increased by an estimated $3 billion. On average, homeowners are paying $800 more in school property taxes than before the slots law, according to Pennsylvania’s Commonwealth Foundation (op- ed, Harrisburg PA Patriot-News, July 12, 2009). In Colorado, expanded gambling was supposed to generate $29 million a year for state colleges, but first-year revenues totaled only $4.4 million (Denver Post, 12/20/2009). In Illinois, gambling revenues have dropped 30% since 2008, adding to the state’s budget deficit problems (Bloomington Pentagraph, December 30, 2009). In Delaware, lawmakers are considering a further expansion of gambling to include table games because casinos and parlay betting on pro football games has failed to ease the state’s budget crisis (Delaware County Daily Times, March 18, 2010).

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