Economic Impact

Let's start with the project at face value: a modest bingo hall. Based on the PBPN's August 2006 proposal, we anticipated at least 500 slot machines. Other casinos devote space to table games and entertainment, however. Our latest information (2015) from the County suggests that the current plan is for 800 slot machines.

One slot machine takes in on average $60,000/year (Kindt, 2005); Foxwoods made about $110,000 per machine in 2005. Adjusting for inflation, the $60,000 number becomes $72,000 in 2015. For the proposed Shabbona casino, the $72,000-per-machine number works out to almost $60 million per year of gross profit. This is the house percentage (at Foxwoods it's about 8%) of the much larger total amount gambled. If the Shabbona casino succeeds at the level of Foxwoods, the annual take would exceed $100 million.

The next question is how much of that money comes from DeKalb County. A typical fraction of the revenue from the 35-mile "feeder radius" is 60 to 80% [Kindt]; these are the people who can easily manage to stop in once a week. Given the existing commercial casinos in Aurora and Elgin and Davenport, Rockford's access to Wisconsin casinos, and the limited population centers south and west of here, it seems reasonable to estimate that 50% of the Shabbona casino revenue will come from DeKalb County residents. Even if we reduce that fraction to 40%, the casino would be taking $24 to $40 million out of the pockets of County residents. And this won't be by happenstance: casinos aggressively market to patrons within the feeder radius because those people are their potential repeat customers.

Now let's look at what the County is getting. The PBPN has claimed 400 jobs. Slot-machine casinos don't have many skilled positions; most of these are likely to be minimum-wage food-service and maintenance positions. If we assume an average of $10/hour, that works out to $8 million. (The County Board economic-development minutes claim a payroll of $17 million, but, without further explanation, we don't think this is a credible number. In the 2003 Darling & Seitz study of the Prairie Band's Kansas casino, the number of employees was was 937 and the payroll, with benefits, was $17.4 million. Assuming same proportion holds here, and allowing for inflation but subtracting the benefits portion, the payroll here would be just under $8 million.)

The bottom line is that the casino will leave DeKalb County with a net loss of at least $16 million per year, and maybe as much as $32 million.

The lower number represents a per-resident average loss of $160, or a per-family loss of around $800. Of course, those losses will fall terribly disproportionately on the 4% to 5% of the population with gambling problems; see our page on problem gamblers for more information.

Another way to look at the economic impact of the casino is that it is comparable to closing a similarly sized manufacturing facility. That's progress?

Some "economic impact" statistics apply a multiplier to the payroll to create a rosier picture; a conservative economic multiplier for community investment is around 1.5. However, any "investment" multiplier would also have to be applied to the money going out, raising the net loss to the county.

This is not what we need. Not now, not ever.

Local Business

Some people like to argue that local businesses will benefit from the traffic that a casino brings to the community. But local businesses near a new Wal*Mart certainly do not benefit. Shabbona lost its hardware store a couple years ago, largely due to competition from big-box stores in DeKalb, twenty miles away. Local food and drink establishments will simply wither away in competition with the gambling-subsidized equivalents offered by the "big-box" casino. The only beneficiaries of the surge in traffic will be operations that offer things the casino does not compete with, and that looks to be a pretty short list.


Now, it is likely that the original "bingo hall" will grow, especially if the Tribe succeeds in attracting a steady stream of visitors. The Tribe has acknowledged existing internal plans for a tenfold expansion (from $25 million investment to $250-300 million), though it's not clear what portion of that would represent a growth in gaming. An eventual tenfold increase in the size of the gambling operation would bring the casino into the size range of other larger casinos.

There is one silver lining for DeKalb County in this kind of growth: local casino wages would have to rise faster than local resident gambling losses, and eventually those wages will make up for the County's direct losses. But there will still be huge indirect costs: social costs due to problem gambling can be considerable. One estimate [Kindt] is that ever dollar of gambling revenue is matched by at least that much in indirect social costs due to crime, congestion, bankruptcy, and related social strains. No matter how big the casino grows, taking account of these indirect costs means DeKalb County will never be better off.

Furthermore, by the time the casino grows to this extent, the vicinity of Shabbona will be heavily urbanized, visitation to the State Park will greatly decline due to traffic congestion and related problems, and what was special about this town will have been lost forever.

For a summary of John Kindt's comments on casinos, see here. For Kindt's more detailed analysis of the negative impact of casinos, see here.