Casinos in NY

Governor Cuomo of New York, along with legislators Dean Skelos and Sheldon Silver, have decided that bringing casinos to New York would be beneficial to the state.  This appears to be a back room deal with the casino lobby as casinos have been time and again shown to not contribute to economic growth.  As with any lobbying group, their public front is that whatever they are lobbying for will contribute to growth and create jobs.  However, that is often not the case with some legislators able to see through the murk.

With specific regard to casinos, the net gain to society is minimal.  Casinos do not contribute anything economically to areas; sure they create jobs, but the income generated comes at the expense of other activities.  Nothing of value is created with casino activities as there is merely a transfer of wealth from one person to another, with the casino acting as a middleman skimming off the top.  The only way that casinos generate any impact on the local economy is through the multiplier. The way the multiplier works is that a building is constructed, giving a construction worker a job, who then goes out and buys a new car, the dealer buys a steak dinner, etc.  If money is put into working peoples hands, higher demand is created as they have the funds to spend as those multiply through the economy.

While it is said that there is a minimal societal benefit to a casino, they can be beneficial to local areas such as: Las Vegas and Atlantic City.  Where these differ from the above scenario is that there is a large influx of people from outside the local area who spend their money in the area.  When there are sufficient visitors from out of the area, the benefit is large at the expense of wherever the people are coming from.  So, the net benefit is still zero, but there is transfer from everywhere else to Vegas.  If creating a casino will bring tourists to the area and not be a drain on locals, it may be a beneficial policy.  But, cities be warned, most areas that have allowed casinos have seen transfers from local businesses to the casinos as it is nearly impossible to take business from Vegas and AC.

This is the article that tipped me off; appears to be a case of crony capitalism.
http://www.timesunion.com/opinion/article/More-casinos-Think-again-2437628.php