Casino benefits overblown, 2 decades in NW LA show

Twenty years on, while the impact of the presence of casinos in Shreveport and Bossier City is unclear, with certainty it’s not unambiguously positive. And it provides potential validation for those place in the state that have rejected the siting of casinos.

This spring marked the anniversary of the establishment of the first in Shreveport, and by 2000 there were two on the west bank and three on the east bank of the Red River. Almost a year ago, the latest entrant camped in Bossier City. When in 1991 these were legalized beyond the one land-based casino in New Orleans, after a lengthy process of licensing then building, then-Harrah’s in Shreveport became the first to operate outside of New Orleans.

At the time, proponents said that not only would local governments cash in well with casino gambling, but also they would indirectly from sales and property taxes generated by employees of the jobs created. As it transpired, such sentiments have been proved questionable.

As of the latest (2012) data, both cities take about $12 million a year from casinos. Both are off historical highs at the beginning of the millennium – and during a minor national economic downturn after 9/11/2001 – of between $15-16 million (Bossier City managed to stay in that range until the next economic downturn beginning in 2007). For comparison sake, this means that in 2002 direct casino earnings accounted for 7.7 percent of Shreveport’s non-enterprise revenues and 22 percent of Bossier City’s. A decade later, the respective percentages were 4.5 percent and 13.4 percent.

These figures precede the market addition last year, but that is expected not to expand but to cannibalize the existing marker. As a whole, with the general expansion of legalized gambling in other states, particularly Oklahoma, will make it difficult not to expect a decline in this market, and if Texas were to allow it a severe contraction would result.

Thus, as a whole casinos provide only a small proportion of direct revenues to Shreveport, although a somewhat more significant amount to Bossier City. In both cases, that contribution is becoming more and more minimal.

The effect on sales and property taxes is much harder to quantify, given the large number of other factors that can influence these totals. But, anecdotally, it would appear that more cannibalization than revenue expansion has occurred in this aspect. Local food and drink establishments have found it difficult to compete with the casinos’ internal and subsidized options. Other discretionary entertainment venues have contracted; whereas prior to 2002 the area enjoyed at various times Canadian football, minor league professional basketball, a AA-affiliated baseball team, a high-minor league hockey franchise, and Division I collegiate sports at Centenary College, now it has just a semi-professional basketball team, a low-minor independent baseball squad, and Centenary now playing at Division III. And cultural attractions such as opera, theater, and symphonic music have contracted as well during this period.

Therefore, with job displacement rather than expansion likely occurring, not many revenue gains from taxation should be expected. Nor does this include external costs, such as social costs of gambling addiction, which were estimated over a decade ago at almost $11,000 per person in Louisiana. One would expect a disproportionately high number of people in this category where there are casinos nearby.

Given these data limitations, an exact accounting of the 20-year impact is impossible. However, it should be clear that, at best, the picture is mixed, and that the metropolitan area’s recent designation as the local economy that shrank the most in 2013 shows gambling certainly has not served as an economic panacea. And perhaps it’s the very notion that it or anything else, such as courting a three-wheeled automobile maker, paying for a high-tech office building, or opening a slew of retailers, can serve as a magic bullet operates as a distraction from the real task at hand that produces economic growth – having right-sized governments, ones that don’t blow money on things like hotels or sludge farms or arenas, and that concentrate on core functions such as education instead of politics or patronage – necessary for improving the area’s quality of life.

And things don't seem to be getting any better. The latest data show this area following the rest of the state generally downwards in gambling revenues, with Shreveport-Bossier being off about 10 percent year-over-year as 2014 comes to a close.

The only metropolitan areas in the state which rejected casino gambling were Alexandria (which is near all the Indian casinos) and Monroe (which has Bossier City and Vicksburg within 100 miles). If the Shreveport-Bossier experience says anything, it's that perhaps those two abstainers may have made the wisest choice.