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
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.
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
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
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.