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Casino stalls – perhaps for good

The probability grows smaller by the day that a Las Vegas-style casino will move forward in Wood Village.

Promoters of the casino development have yet to begin collecting signatures they need to place statewide initiatives on the November ballot to allow a single privately owned casino in Oregon. And as the July 3 deadline for obtaining 110,358 valid signatures draws closer, the likelihood of success for a belated signature-gathering campaign is rapidly dwindling.

Considering the damage that a mega-casino would inflict on the social fabric of East County, we are happy to see that the efforts of Lake Oswego businessmen Matthew Rossman and Bruce Studer have been stalled for weeks. Rossman, Studer and their secret financial backers haven't explained their reasons for waiting, even though it's obvious that their time is running out - just as it did in 2006. But they may yet attempt to make the 2008 ballot with their proposals, or they may opt to try once again in 2010.

In either case, we believe whatever opportunity Rossman and Studer had to gain approval of a privately owned casino has already passed. The public - in Oregon and throughout the United States - is becoming increasingly aware that casinos are not the economic engines they are purported to be. In fact, reliable research on the subject shows that casinos cause more economic damage than good.

Casinos are an economic drain

Economics Professor Earl Grinols, formerly of the University of Illinois, has conducted independent research with no funding from either gambling or anti-gambling sources. Grinols has studied the economic effects of casinos since 1990, and he has concluded that the economic costs of casinos outstrip the benefits by a ratio of three to one.

These economic costs, according to Grinols' research, include increases in crimes such as assault, rape, robbery, larceny, burglary, auto theft, embezzlement and fraud. Casinos also bring higher rates of bankruptcies, suicides, illness, divorce and child abuse, and they raise the cost for public services such as unemployment insurance and addiction treatment.

Given the plethora of ills that accompany casinos, it's a puzzle why any community would actively seek such a form of development. The rationale usually is job creation, but even on that score, Grinols and other serious researchers have found that casinos can hurt, not help, a community's employment base.

If a casino opens in town, it diverts dollars away from existing businesses. This is especially true of casinos that operate in urban areas - because the vast majority of customers come from a 35-mile radius. They don't stay the night and they don't shop at other businesses in town. They go to the casino, lose their money and then head home a bit - or a lot - poorer.

Massive funding would be required

Voters are figuring out that casinos are an empty economic promise. An article in the New York Times Magazine on Sunday cited Grinols' research and his conclusion that for backers of a casino to win a referendum election, they must outspend opponents by 75 to 1. This is another harsh reality for supporters of the Wood Village casino to consider.

An attempt to amend the Oregon Constitution will face well-funded opposition from Native American tribes and the restaurant industry. Those interests, which admittedly aren't pure either, will spend millions of dollars, if necessary, to fight a private casino. Assuming that Grinols' formula is even close to accurate, that means Wood Village casino supporters must invest hundreds of millions of dollars to get their concept approved.

If the Wood Village casino proposal lurches ahead against all odds, it will be for the sole reason of money. Investors would stand to make hundreds of millions - probably billions - of dollars in a span of a few years. And the city of Wood Village or other governmental agencies could be lured into believing they actually have something to gain. After all, what's a few more suicides, bankruptcies, assaults or divorces when there's that kind of money to be made?

We believe, however, that the public is wise to the real effects of casinos. And we would welcome any sign from Rossman and Studer that they are ready to consider other, more sustainable economic uses for the old Multnomah Kennel Club.