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Casino Feasibility Study Falls Short
July 31, 2003

The City’s long-awaited (and one month overdue) Casino Feasibility Study (actually, “Gaming Market Assessment, Economic and Social Impact Study”) that cost $100,000 turns out to be worth about ten cents. What it concludes is no surprise to those who ordered it that “the benefits of a casino in Richmond will far outweigh the social costs.” Unfortunately, it doesn’t provide any of the nitty-gritty details a policy maker needs to make that hard decision about whether or not to play poker in this particular game.

What it does not tell is what the range of expected income to the City of Richmond will be other than perhaps about $1.9 million in sales taxes or sales tax equivalents (Indian-owned land is not taxed). That’s about the same amount that Chevron refused to pay in utility taxes last year.

The study acknowledges four potential sites but provides no critical or comparative analysis of any of them. These include Terminal 3, Point Molate, the former Zeneca property and a non-specific site on the Richmond Parkway. Although the report does not discuss any details, it is common knowledge that the Terminal 3 site is saddled with such problems, including encumbrances by the State Lands Commission and BCDC that it is unlikely. Chevron says they don’t want it at Point Molate, and when was the last time Chevron didn’t get what they want? In addition, the Indians don’t like the access to Point Molate because it would slow down the predicted 10,000 cars per day that would speed right through the I-580 or Richmond parkway interchanges (except when they are blocked by mile-long trains). The study’s authors are so knowledgeable about Richmond they call the Richmond Parkway the “Richmond Freeway,” but we know what they mean. The Parkway sites being considered are not in Richmond; they are in the unincorporated County area, which would give Richmond all the negative impacts but no control over the goodies. Finally, the “Zeneca” site is starting to look pretty good, but it’s privately owned, raising questions about how good a deal the City could cut for itself compared to the two City-owned potential sites.

The potential effect of Casino San Pablo, if and when it becomes a full-blown casino, was labeled only as “the major wildcard.” No pun intended?

The economic projections of the study are mind-boggling. It predicts direct, indirect and induced spending of $365 million dollars annually, increased earnings of “area” (Richmond?) residents of $125 million and employment increases of 4,462 persons. Using 2002 data, Richmond had a labor force of 52,590 with 9.8% unemployment. That works out to 5,153 people in Richmond who are apparently looking for work but not finding it. Match that up with the 4,462 new jobs, and Richmond’s unemployment rate drops to less than 1%. Or does it? There is no information in the report about who will fill these jobs, where they will live, or how many of them will be currently unemployed Richmond residents. Pretty important information, wouldn’t you say? The study cites another study that predicts unemployment may drop by 12%. That would mean jobs for only 618 of Richmond’s jobless, and entry-level ones (read non-living wage) at that.

There is no discussion of the typical wage rates for casino-related jobs and the types of benefits paid, although the bulk of the jobs are described as “entry-level.”

As for social impacts, the study concludes that with respect to crime, social services and bankruptcy, casinos are probably about as innocuous as your local church. There are, however, reports of adverse social effects. There is an accelerated trend for families to move out of town to be replaced by new families. A little new blood never hurt any city. Pathological gambling affects only 2.2 percent of adult Americans, and 6% “display problematic gaming habits.” One in five pathological gamers attempt suicide, but a few deaths on the streets haven’t yet deterred Richmond as the “City of Pride and Purpose.” Divorce and homelessness increases among pathological gamblers, but luckily we have the Bay Area Rescue Mission to take care of that. 

The study has a summary of the state and national government legal and political obstacles between a Native American casino and a Richmond location but no informed assessment or prediction of the actual prospects for overcoming them.

The study did not, of course, offer any insight as to whether the citizens of Richmond want to embrace casino gambling. That decision will be left to us omniscient city council members.