Casino towns take good with bad

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Mount Pleasant, Mich., used to be quiet in the fall, spring and winter – and even quieter in the summer, when Central Michigan University students went home.

Like the college’s name suggests, the town is in the middle of the state, and “in the middle of nowhere,” said Gary Gagnon, assistant professor of marketing and hospitality at CMU.

“In the summer you could throw a bowling ball down Main Street and not hit anybody because the students were all gone,” Gagnon said.

But 10 years ago, the Saginaw Chippewa Indian tribe opened the Las Vegas-style Soaring Eagle Casino & Resort. Today, an estimated 10,000 people visit the casino every day, pumping millions of dollars into the local community. Strip malls and hotels have proliferated, and business is booming.

At the same time, crime is on the rise, and local services such as roads, water supply and sewer system have been sorely taxed.

“It quickly became a gambling town that also had a university,” Gagnon said. “It changed the nature of the town that much.”

Across the country, communities and states have turned to gambling facilities such as casinos and racinos – harness-racing tracks with slot machines – to provide entertainment, jobs and revenue for state coffers.

In Maine, the question of whether to allow an expansion of gambling is once again before voters on Nov. 4. A Las Vegas company is backing a referendum question that would legalize a casino resort in rural Oxford County.

Maine proponents point to jobs, business growth, revenue flow and other positives in their attempt to sell the idea to voters. Opponents cite increased crime, stressed infrastructure, problem gambling and other social ills as they try to discourage people from voting in favor of the referendum.

Communities such as Mount Pleasant, or Hinckley, Minn., another area where a casino has opened and quickly dominated the landscape, are examples of how casinos can affect a rural area, for better or worse.

“There’s definitely pros and cons, there’s no doubt about that,” said Jon Joslin, Mount Pleasant’s mayor. “It brings the good with the bad.”

About an hour’s drive north of Minneapolis-St. Paul, Hinckley saw the Grand Casino Hinckley open in 1992.

The town quickly had to upgrade its water and sewer systems, and traffic still jams up on weekends. But the Mille Lacs band of Ojibwe Indians, owners of the casino, invested $1 million in the $1.8 million infrastructure upgrade.

The county’s tax base is 75 percent commercial, thanks to the operations that aren’t on tribal land but are supported by the casino engine, such as hotels. The overall tribal operations – casino and hotels – employ 1,700 people.

“This isn’t a business that’s going to pick up and go to Mexico because the labor’s cheaper,” said Jim Ausmus, town administrator in Hinckley. “They’re going to stay here.”

Impacts

In Maine, Las Vegas-based Olympia Gaming has proposed a casino with attached hotel, spa, restaurants, conference space and other attractions in the town of Oxford. Built in phases, it eventually could have 1,500 slot machines, 20 gaming tables, a poker room and 300 hotel rooms. It likely would employ 900 people, supporters say.

The Minnesota and Michigan casinos are not exact comparisons. Both are in rural locations, like Oxford. But both are also larger than what Olympia has proposed in Maine.

The Grand Casino Hinckley has several hotels totaling more than 500 rooms, and 2,458 slot machines, 28 blackjack tables and a 350-seat bingo hall. Soaring Eagle in Mount Pleasant has 514 rooms, 4,400 slots and more than 70 gaming tables, including blackjack, roulette, craps and minibaccarat.

In Hinckley, there are now three banks instead of only one. The town also has fast-food chains, a medical clinic and a movie theater – none of which existed before the casino.

Before Soaring Eagle opened, there were no chain restaurants in Mount Pleasant and no department stores. Now there’s a Target, a Wal-Mart and a Kohl’s. There’s a Red Lobster and a Ruby Tuesday. A number of hotels have opened in the area.

Jim Hill, director of Central Michigan University’s honors program, completed a study last year of the social and economic impacts of the 17 tribal casinos in Michigan from 1993 to 2003. The study was state-funded.

It found that counties with casinos experienced a 50 percent increase in the total number of businesses. Adjacent counties saw a 66 percent increase. Unaffected counties – those without a casino and not next to a county with one – saw a 5.5 percent growth over the 10 years studied.

“Overall, I would say … we’re a better town,” said Joslin, the mayor. “You have to realize bad comes with it. With most anything, I guess.”

The tribe’s success in Mount Pleasant increased cash in the area, Joslin said. And there has been growth in drug trafficking that follows the money, he said. The tribe has earmarked much of the money it contributes by law to the local community to support a regional task force aimed at fighting the trafficking.

In Michigan, 2 percent of the slot machine revenue goes to local communities; 8 percent goes to the state. There are 18,589 slot machines in the state, according to the Michigan Gaming Control Board, and they have paid a total of $191 million to local communities since 1993. The Saginaw Chippewa tribe, which owns Mount Pleasant’s casino, has paid almost $93 million to local governments.

Hill’s study showed that both white-collar crimes – such as embezzlement, forgery and counterfeiting – and vice crimes – such as narcotics, drunken driving and prostitution – saw bigger percentage increases in counties that weren’t anywhere near casinos, compared with counties housing casinos or near a county that had one.

“I attribute this to the huge increase of law enforcement officers in casino and casino-impacted counties, though in many instances, casino-county crime still exceeded the state average,” Hill said.

Crime did increase in Hinckley, but it wasn’t out of line for a population that increased from 1,000 residents to 1,400, said Ausmus, the town administrator.

He said the Mille Lacs band of Ojibwe has recognized the impact that its casino has on the community and pays for two full-time police officers for the county.

A community needs to be aware of how the additional development affects services, said Mount Pleasant’s Joslin. It’s not just that there’s a casino in town, but also that the extra restaurants, extra hotels, extra traffic mean you need extra firefighters, extra police.

Joslin said casinos also draw problem gamblers.

“We’ve seen cases … this person sitting there for 12 hours at a time – it’s crazy, it’s sad,” he said. “They don’t build these great big gorgeous buildings on winners.”

But, he said, the community of Mount Pleasant itself isn’t really affected by that sort of problem.

“Big-time gambling problem people come from out of town – and then they go back,” said Joslin. “You’ve got an hour radius around that building where people are getting poor.”

Hill’s report indicates there might be some truth to that. He found that in counties with casinos, the number of personal bankruptcies increased by 314 percent from 1993 to 2003. In adjacent counties, it increased by 534 percent. In counties unaffected by casinos, it increased by 169 percent.

Hill said the state’s compacts with the tribes will be up for renegotiation in 2013, and he wanted his report to give government officials a good sense of how diverse and widespread impacts can be, so money from the casinos could be used to address them.

Hill advised that a community looking at a casino should have in-depth communications with local groups that have philosophic concerns with gambling – possibly using a mediator to hold those community discussions.

He suggests the community take a long, involved look at infrastructure demands before negotiating contracts with the gaming group.

“It’s like putting a state fair in a community overnight,” said Hill. “If you haven’t prepared for both traffic flows into the community and for all these transient patrons and the [associated] problems … That bucolic feeling people have in a community is lost in a hurry.”

Joslin said the transient variety of casino visitors are “just going to blow through, they’re not going to care” about the host community. In theory, dealing with the extra problems accompanying a casino should be paid for by the casino, he said. And a community needs to have that spelled out in any contracts.

Hill suggested spending an “inordinate” amount of time trying to site the casino in a place where it won’t clog existing traffic and cause problems if it grows.

There will be drinking, speeding, some theft, some vandalism, he said. The local community will have to increase law enforcement. If the area is seen as unsafe, property values will go down, he said.

“For me, it’s offered a lot of additional challenges as an administrator, that I’ve kind of enjoyed doing. It’s created a lot of other jobs and interest in the area,” said Ausmus in Hinckley. “I think it’s had a pretty positive impact. We’re fortunate that their management group has been a good group to work with. We’ve always worked as partners, as a city and a tribe.”