Friday, June 27, 2008

Editorial: Congress right in blocking new casinos


Congress right in blocking new casinos
Allowing new gaming houses in Port Huron, Romulus is a bad idea

The Detroit News

The decision by Congress to deny two new Indian casinos in southeastern Michigan will help assure the health of the state's gaming industry.

Romulus and Port Huron each wanted casinos in a proposal that would have swapped Indian land in the Upper Peninsula for "reservations" in those two communities. That needed congressional approval, which the House of Representatives denied this week.

That's good news for the city of Detroit, which relies heavily on the tax revenue from its three casinos.

Detroit got those gaming houses in exchange for giving up state revenue-sharing dollars and part of its city income tax.

Threatening the revenue from the Detroit casinos by saturating the surrounding market would be unfair.

In addition, because they would be operated by Indian tribes that are subject to less regulation and taxation, the Romulus and Port Huron casinos would have had an unfair competitive advantage.

Detroit, with the blessing of the state, has required its three casinos to build expensive new hotels of 400 rooms each. The proposed Indian casinos wouldn't have had that burden.

The Greektown casino downtown is already in bankruptcy, and revenue has stagnated at the other two casinos. That should be a warning that the market might not support an expansion of gaming.

Losing one of the downtown casinos would have a terrible impact on both the city and the state, which also gets a sizeable amount of revenue.

Other regions that have allowed gaming to expand unchecked have seen the windfall from casinos wither.

The House made the right decision. Gaming works best for the region and the state when the casinos are concentrated downtown.

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