Casinos Must Grease Many Palms To Repair Their Damages
Written by Michael Lewis on November 3, 2011
By Michael Lewis
Where the world’s largest casino would rise, some want Genting’s Resorts World Miami to ante up to be their friend.
Among demands: rebuild I-395, build a garage and theater for the Arsht Center and buy 1,000-plus tickets for every show. A modest proposal.
That’s a good start. We favor prying every penny from those who aim to strip billions from Miami and ship it far away.
Of course, if the state brazenly afflicts us with casinos tied to massive resorts geared to keep visitors firmly inside, legislation wouldn’t force owners to deal with neighbors, or, for that matter, voters or local government.
Casino operators could thumb their noses at anything we want and go on extracting billions. There’d be no votes by public, county or city — just one big affliction courtesy of the legislature.
So if Town Square Development Corp. can pry anything out of Genting for the Arsht Center, good for them. If the legislature forces casinos on us, there’ll be plenty to pry out.
Genting’s profits would be phenomenal: $3.95 billion a year at half capacity. Building to levels Genting has cited and full capacity could triple that.
But the true magnitude is a moving target: numbers keep changing.
Take casino space. One Genting spokesman told us top would be 400,000 square feet. The next day he said 800,000.
But that wasn’t final. Colin Au, leading Genting here, then cited 600,000 — but add 675,000 for casinos at the Omni across the street. Each casino would then be near the size of the world’s largest.
Now a spokesman cites 550,000 at the resort, 250,000 in Omni.
Don’t sweat details, says Carlos Curbelo, who doubles as paid Genting lobbyist and voting member of our school board, which has just marketed more than 10 acres near the casino site that Genting and other casinos can vie for. What matters is concept, Mr. Curbelo says, not size. Ignore discrepancies.
That’s nice, but size dictates profit. Nobody muscles in with massive casinos just to help us. Casino operators play by the numbers, building on profit per square foot. The more feet, the more profit.
To see how this affects Genting, the only circling casino vulture to release details — however they change — look at industry standards.
Every gambling form has a take per foot. We use 2003 averages from the 19 largest Las Vegas casinos, then adjust them for inflation to what Genting could do if its floors were only half full around the clock.
Genting says it will have 8,500 slot machines, equal to $382 million yearly profit in Las Vegas. If 500,000 feet remaining were split equally, blackjack tables would yield $568 million, roulette $781 million, dice $896 million and baccarat $500 million.
Total casino profit in current dollars would be $3.95 billion yearly on a $3.8 million one-time investment. That doesn’t include profit from hotels, shops, restaurants, resorts, or meetings and banquets.
Casino size also dictates body count.
Based on half capacity and less than maximum size, at Vegas standards every minute we’d find 4,250 people at 8,500 slot machines, 3,500 at 1,000 blackjack tables, 2,400 at 800 roulette tables, 3,390 at 565 dice tables and 2,700 at 450 baccarat tables. That tops 16,000 gamblers, plus more eating, drinking, talking, walking or sitting this one out — 25,000 on the floor.
Averaging six hours a day, that’s 100,000, plus Genting’s pledged 30,000 staff, perhaps 25,000 each day. So gambling could lure 125,000 people daily, 100,000 just to gamble.
If we believe Genting, the 100,000 are from elsewhere. If we don’t, most live here. Either way, Miami will face vast burdens.
Those who aim to aid the Arsht Center aren’t the only ones needing a slice of $3.95 billion annual casino profit from the state-licensed monopoly of sin, to use Genting’s word.
If we’re fool enough to welcome sin, we should be smart enough to spread sin money to ameliorate its damages, though nothing repairs a community’s fabric.
If Genting wants to be our friend, while it pays off the Arsht Center it should pay off others too.
First, pay off the Miami police, in whose area it will profit without a penny to the city. While illicit operations might pay off individual officers, we’d still need to fund added policing.
Bringing in 125,000 people a day is like adding more than 40% to the city’s 400,892 population. The city thus would need 560 more in its 1,400-strong police force at $42 million pay and benefits — say $50 million total. Thanks for that, Genting.
We’d need government services to handle added crime, drugs, prostitution and social services for families whom gambling harms. Think of county police and jails. There’s no easy total — we need studies by economists unaffiliated with casinos, if any remain — but you can bet $100 million a year would be minimal.
Charities dealing with homeless and broken families, alcohol and gambling addiction, rampant prostitution and far more would face added burdens. Between the United Way and unaffiliated groups, $100 million a year might scratch the surface. Don’t sell out for less.
It’s hard to tally visitor impact. We welcome them, but we must handle them well. Last year we set a county record, 12.6 million overnight.
If we credit Genting’s tale that locals wouldn’t use its casinos, assume each gambler comes in for a week. At half capacity we’d add 5.2 million yearly overnight, 41% above our biggest year. That would require airport expansion atop $7 billion we’ve just spent.
If we discount Genting’s claim that casino-goers will all fly in, losses would pick locals’ pockets. Either way, Genting could help pay huge costs.
What else should Genting pay? We’re building art and science museums in its shadow. At minimum, Genting should fund construction and costs to cover its patrons who escape to visit next door. Call it $150 million up front.
Next, education. Casinos would be game-changers. Genting’s Mr. Au says they’d hire high school grads. But perhaps Miami Dade College could train workers as dealers who average $14,700 a year by federal study. A $100 million college subsidy would be most welcome.
Finally, how to compensate businesses that fail when casinos keep trade in house? If Genting had no monopoly, that would just be fair competition. But given a state license to steal, Genting should set aside $100 million a year to compensate. That is, if Genting wants to be our good friend.
And, if Genting were so community spirited that it would do all of this out of its profits, guess what? It would still send home billions every year and pay off its total investment in two years.
That’s how lucrative casinos are and how much we’re being ripped off if we license them.