Free Response to Motion - District Court of California - California

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EXHIBIT F

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Capturing Benefits Casino the of Gaming:
An Economic Development Initiative for RhodeIsland
Submitted Harrah's Entertainment, by Inc. to the RhodeIslandSpecial HouseCommission StudyGaming,March 14,2003 to

I. Introduction and Background gamingis a realitytodayfor RhodeIslanders, RhodeIslandenjoys PolicyEnvironment.Casino yet - Foxwoodsandthe very few of its benefits. Connecticut, of the world's largest In two casinos Mohegan SunResort- havebeenachieving recordresultsandcreatingsignificanttax dollarsfor the public coffersof Connecticut well assignificanteconomic as development, thanksin part to a steady stream business of from RhodeIslandandMassachusetts residents. Overthe pastdecade, while business thoseresortcasinos grownexponentially, at has RhodeIslandhasnot responded with a gamingproductthat hasstemmed flow of tax dollarsanddevelopment Connecticut.The the to additionof video lotteryterminalsat Lincoln ParkandNewportJai Alai, althoughcontributing important revenues the state'sgeneral to fund,neithercaptures significantportion of the casino a budgets Massachusetts RhodeIslandresidents, delivers kinds andamounts capital of or nor the of investment, employment, tourism,andothereconomic benefits the Statethat long havebeen to associated successful with casinodevelopment. Thetax revenue otheropportunities and associated a viablein-statecasinoindustryprompted with bothRhodeIslandandMassachusetts establish to studycommissions 2002to examine issues in the raised legalizingadditionalformsof gaming. Massachusetts' by commission alreadyreleased has its report,which argues Massachusetts' that failureto hamess economic the benefitsof an in-state casino industryis costingthe Commonwealth hundreds millions of dollarsin annualtax revenue of and jobs. Rhode thousands well-paying, of career-path Island's commission expected issue report is to its in the spring. Harrah's/ Narragansett Agreement.In December 2002,Harrah'sEntertainment, ("Harrah's),the Inc. owner/operator 26 casinos I 3 states, of in announced partnership a with RhodeIsland'sNarragansett Tribe,which haspursued destination a casino resortin RhodeIslandfor morethan a decade.At the time of the announcement, Harrah'sandthe Tribe stated the venturewasnot prepared announce that to features a proposed specific of development, to do so would be meaningless as without the Statefirst establishing "rules of the game": (i) a tax rateuponwhich the venturecouldmakean educated the business decision whattype of development on couldbe pursued, (ii) a regulatorystructure and to ensure integrityof the process the which is critical in anycasinoenvironment essential Harrah's and to in anyjurisdictionthat it investsin. Despite mythsthat exist in certainquarters, development a casinoresortis neitheran endless the the of goldmine that cansupportunlimitedinvestment from a privateinvestor, a vehiclethat cangenerate nor unlimitedtax revenues a statetreasury.To the contrary, for from the perspective a casinoowner of suchasHarrah's, development a casinoresortis similarto the pursuitof any business the of venture in returnon otherindustries wheredecisions based are uponthe costsof the investment, expected the the environment otherfactors. and capital,the stabilityof the investment environment, competitive by suchdecisions principallybased are Withoutthe "rules of the game"beingestablished the State, -to a uponguesswork which explainswhy Harrah'shasbeenreluctant "announce'o grandplan for in haveannourced the past. developers development otherprospective as casino

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Policy Goals. The Statemustdetermine goalsfor casinodevelopment, the Statechooses its if to pursue anda plan of actionto makesurethey arercalized.A particularandthreshold it, concem of RhodeIsland'sis the potentialeffectof gamingexpansion bothwithin RhodeIslandaswell asin neighboring states on the revenue streams from existingVLT operations Lincoln andNewport. As at this paperdemonstrates, authoizationof a WestWarwickcasinocanleadto substantial the incremental revenue the State, for and,importantly, in assist fortifying the revenue stream statewill the receive the New Englandmarketinexorably as morecompetitive. becomes Harrah'srecognizes State'sown responsibility determining policy goals. We believe, the for its however, the following goalsarelegitimate achievable: that and Recognize reality of a casinogamingmarketin New England the that will grow only more competitive overtime. Providemoretax revenue the State to thanits existinggamingis alreadygenerating. Encourage kind of capitalinvestment the necessary compete to with otherregionalgaming facilitiesandto create long termjobs. Encourage casinodevelopment will serveasan additionalanchorandadjunctto the a that existingtourismandconvention industry. Limit the locationof licenses areas eithercangenerate greatest to that the economic benefits for the state,andlorwherecasinostylegamingalready existsor will haveminimal impacts, as so not to change natureof any local community. the Encourage kind of casinodevelopment RhodeIslandthat will encourage the in RhodeIsland citizens'gamblingbudgets stayin the state, to with the benefits accruingto RhodeIsland businesses RhodeIslandtax coffers. and Capitalize geography travelpatterns, on and allowingfor the capture Massachusetts' gaming of dollarsandcustomers within RhodeIsland. Encourage development a destination the of resortwith all of the concomitant economic benefits.

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Thepaperprovidesinsightson a modelof casinodevelopment RhodeIslandthat would be in consistent with, andhelp achieve, thesegoals. II. Overviewand Purposeof Paper and Harrah'spreference SincetheHarrah's/ Narragansett agreement announced, notwithstanding was posed particulardevelopment by for independent assessments the opportunities constraints of and government haveasked about: us scenados, various officials (i) resort,includingthe overallnet fiscal impact in the likely fiscal impactsof a new casino from Lincoln ParkandNewport flow thatthe Statereceives view of the currentrevenue Grand:

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(ii)
(iii)

factors should considered theState establishingtax ratefor a destination in that be by a
casino; and impactsshoulda destination the natureandscope economic of resortcasinobe permitted to operate the state. in

This paperhasbeenprepared address to suchinquiriesandto openup a dialogwith government officials. Suchdialogwill be critical in the eventthe legislature decides moveforwardwith a to destination resortcasino, the considerations as addressed shouldinform the "rules of the game" here thatthe State would establish anycasinolegislation.We encourage Stateto independently in the analyze dataherein,andto understand fiscal impacts any destination the the of casinoprior to submitting question hostingsucha casino a public referendum. the of to Thenext section the paperdemonstrates the incremental of that fiscal impactsof gamingexpansion on RhodeIslandcanbe substantial, they hingeon how andwhenthe Statereacts the State of and to potential new competition the regionalgamingdollar in New England. for On the onehand, as evidenced below,the Statecould enjoy a significantincrementalincrease in (an increase $200million by Y2006,$100million from the casinoand $100 tax revenues of million from the additionalVLT's at Lincoln Park and Newport Grand) if the Stateauthorizes a (and the citizenryvotesyes),implements singledestination resort casino additionalgaming positions that havealreadybeenapprovedby the Lottery Commission, and Massachusetts gaming. This is independent the multiplier impactsstemmingfrom not chooses to legahze of jobs, 1,500construction jobs and approximately 3,000new $500million in capital investment. gamingand the Statedoesnot On the other handn Massachusetts choose legalize if does to authorizea casino, incrementalbenefitto the Stateof the newly approvedpositionsat the Lincoln Park and Newport Grand would be about$ 17 million in Y2006;essentially negating the positivefiscalimpact in RhodeIsland of additionalgamingmachines Lincoln and Newport. at The following sectionof the paperidentifiesimportantconsiderations surrounding establishment the of ataxrute for a destination resortcasino.Thepaperproposes a25 Yotax on all gamingwin (slot and tablerevenue) encourage establishment a facility that is not only competitivewith the to the of Connecticut tribal casinos, that will alsobe differentiated but from Lincoln ParkandNewportGrandin job termsof overallcapitalinvestment the facility, related generation, potentialasan additional in and tourismanchorfor the State. Last,thepaperreviewsthe track recordof destination casinogamingas an engineof economic development throughfwo casestudies.These two communities' experiences direct capital with job creation, investment, vendorspending, spin-offeconomic impacts andotherpositiveeffects provideconclusive casino resort,properlyplanned, be a powerfultool can evidence a destination that for economic development rejuvenation. and III. FiscalImpactsof GamingUnder Various Scenarios with an eyetowardthe many contingencies Thepotentialfiscal impactsof gamingmustbe analyzed gamingin the New Englandmarket. For example, will landscape of that couldaffectthe competitive facilitiesandan additionalcasinoin Massachusetts legalizeslot machines four parimutuel at If occur,andwhenwill the new facilities Southeastem Massachusetts? so,whenwill legalization Moreover,giventhe potentialfor These just someof the variables mustbe considered. are that open?
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legalization Massachusetts the reliance the Stateon revenues in generated Lincoln Parkand and of by Newport($153million inY 2002),the State mustunderstand what action,if any,is required fortify to andsecure revenue the baseit currentlyreceives from existinggamingfacilitiesin RhodeIsland. Harrah's evaluated demand gamingin theregionandthe distributionof gamingspending has the for throughmodelinga numberof possible development scenarios.t thencalculated likeiv fiscal We the impacts the resultingpatterns expenditures. of of Understanding revenue the implicationsof the proposed scenarios requires understanding factorswhich would affectthe demand casino the for gamingin the variousindividualNew Englandgamingmarkets.Estimates gamingrevenue of are determined application a demand by of modelthat calculates consumers' demand gamingwithin for distance ringsof 25, 50, 100,150,200, and250 milesfrom each casino based two factors site on AttractionandFriction. Attractionis a functionof the numberof gamingpositions. Frictionis essentially functionof distance.The modelcalculates a demand eachring based the population for on within a zip codeandthe expected travelpathusingknownroadways geographical and baniers. Themodelvaluesfull gamingversus gamingproducttypesdifferently. Average slots-only patron per spending trip is based time gambled, on which is itself influenced distance.As trip distance by increases, patronspending trip alsoincreases. average per The first scenario below assumes RhodeIslandaddspositions Lincoln andNewportasalready that at approved the Lottery Commission, by while Massachusetts legalizes slotsat tracksandlimited commercial casinogaming. The second scenarios two both assume RhodeIslandimplements that additional video lotteryterminalsaswell asthe Harrah's-Narragansett casinoin WestWarwick. Scenario Two assumes legalization gamingin Massachusetts, of while Scenario Threedoesnot. Scenario One: GamingExpansionin Mass.;Increased Positions RI in Scenario may be considered worst-case One a for scenario RhodeIsland,featuringgamingexpansion (slots-at-tracks well ascommercial in Massachusetts as casinogaming)andonly the proposed expansion video lottery offeringsat Lincoln andNewport. It doesnot includethe proposed of Harrah's-Narragansett casinoin WestWarwick. Whenthe expansion gaminsin Massachusstts of comes on-lineasprojected 2005.thatexpansion render in will almost neglieible positiveimpacts the in RhodeIslandof the additionalgamingpositions Lincoln andNewport. The expansion gambling at of in Massachusetts certainlywill curtailthe ability of RhodeIslandto derivesignificantincremental reve{rues.from Lincoln andNewportasthese facilitieswill find it moredifficult to cor4pete with (i) positionsat track facilitiesin Massachusetts will be closerto a pgrtion of the existing additional that customer base: and (ii) a full scalecommercial casinolocated in a closerproximity thanthe Connecticut casinos.

Themodeling usesLincoln ParkandNewportJai Alia Y 2001actualrevenues annualizesY2002. and Wherenotedthe positionexpansion these 2003. The Mass.scenarios I at two fracksis assumed takeeffectin January to assume ,500vlt's at 4 tracksopenby mid-2003. Theresortcasinos MassandRI areassumed openin January in to 2005.

'

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Scenario One: GamingExpansionin Mass.; Increased Positions RI in GGR Lincoln Park NewportJai Alai GaFing Tax Lincoln Park NewportJai Alai Tax Revenue

# Positions 3,000 1,300 TaxRate
crr1rent

2001 2002 2003 2004 2005 2006 2007 201 233 317 353 257 263 267 53 64 70 75 46 47 47 254 297 387 428 303 310 314
t02 120 t66 189 140 145 150 27 40 33 37 2s 26 26 129 153 203 229 165 r7r 176

Two: GamingExpansionin Mass.;Narragansett Scenario Casinoand Increased Positions Rf in Two provideswhatmight be described a "buildout" scenario, it anticipates effect Scenario as as the gamingin Massachusetts increased would haveon the regionalmarketaswell asexpansion gaming of in RhodeIsland.Massachusetts projected offer both slotsat racetracks commercial is to and casino gaming. Underthis model,which assumes opening Harrah'sNarragansett Y2005,the the of in gamingtax revenues RhodeIslandreflecta $60million increase revenues incremental for in from wherethey aretoday. The modelfurtherassumes a25%o on casinogamingrevenues, tax aratewhich, asdiscussed below,is critical to attracting level of capitalinvestment the necessary a destination for casino that will be competitive the Connecticut to casinos.The bottomline hereis that a destination properly.cansecure the Statea portionof the gamingtax revenues is casino resort.if planned for that currentlLexported Connecticut may be furtherthreatened Massachusetts it decides to and by if to gaming. legalize additional Scenario Two: GamingExpansionin Mass.; Narragansett Casinoand Increased Positions Rf in GGR Lincoln Park NewportJai Alai Narragansett Proposed GamingTax Lincoln Park NewportJai Alai Naragansett

# Positions 3,000 1,300 3,500

Tax Rate

20012002200320042005 20062007 201 233 3r7 353 23s 247 260 5 3 64 70 75 37 38 38 260 293 325 2s4 297 387 428 s32 577 623 r02 r20 166 189 r28 27 33 37 40 20 65
129 153 203 229 213

25.0%

136 146 21 2I 73 8t
230 248

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Three: StatusQuo in Mass.lNarragansett Casinoand Increased Positions RI in Scenario Scenario Threepresents bestcase model,assuming additionof a Harrah'sNanagansett the the casino resortin WestWarwick (againtaxedat a competitive percent), additionof positionssought 25 the by LincolnAtrewport, no legalization gamingin Massachusetts. brief. by Y2006"this scena{io and of In is projected create to to million $353million in gamingtax revenue the State(an incremental $100 derivedfrom the new casinoand$200million morethanis received the Statetoday). By Y 2007. by is theprojection for $369million (anincremental from the casino). $106million derived Scenario Three: StatusQuo in Mass.; Narragansett Casinoand Increased Positions RI in

GGR Lincoln Park NewportJai Alai Narragansett Proposed GamingTax Lincoln Park NewportJai Alai Narragansett

# Positions 3,000 1,300 3,500

Tax Rates

2001 20022003200420052006 2007 201 233 3r7 353 353 389 397 53 64 75 85 70 71 73 360 400 425 254 297 392 437 783 860 894 102 27 120 166 189 192 214 222 33 39 4s 38 3 9 4 r 90 1 0 0 1 0 6 153 206 234 320 3s3 369

25.0% t29

IV. Appropriate Taxationfor CasinoGaming component involvedin establishing "rulesof the game"for a destination the casino resort An essential Harrah'sbelieves it is essential the Stateto determine that for is the tax rateon grossgamingrevenues. into that therateprior to anylegalization, to incorporate determination any legislationcallingfor a and judgmenton a "casino"whenthey do no it referendum. Otherwise, will be unfairto askvotersto pass for to it know whatwill be built. Furthermore, would be disingenuous anypotentialcasinooperator benefitswithout likely job creation othereconomic and relatedcapitalinvestment, tout a casino, in sucharateinclude. to knowingthetax rate. Factors consider establishing o Relationshipof Tax to Capital Investment- As is the case any otherindustry,the tax rateon a in that casino will directlyimpactthe level of capitalinvestment thosewith a financialstakein a thereis an inverse in are development willing to investandreinvest a project.In general, in are that investors willing to invest,especially between tax rateandthe amount the relationship threats. For a major like markets RhodeIslandthat faceexistingandfuturecompetitive of involvingthe investment $400million or more, resortdevelopment destination entertainment to to attractthe capitalnecessary proceed. theremustbe enoughafter-taxreturnon the investment the By way of comparison, high tax rateon Lincoln Park,oneof the highestin the nation, amenities).The MissouriGaming in reinvestment the facility (with few entertainment discourages the that in Commission, explainingits recommendation the Statenot increase tax rateon Missotui + a $2 per personadmission in fee) reasoned its + (Missouri'stax is at lSYo a2Yolocaltax casinos
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is Assembly that a largetax increase "... likely to have 2002ArurualReportto the General negative long term economic effectson the Stateof Missouri. It will detercapitalinvestment, cost jobs, andin the final analysis, likely to resultin lessgamingtax revenue is because operations will pre-expense burden." shrinkin orderto moreefficientlybearthe costsof the increased tax o TaxesImposedon CompetitiveFacilities- A crucialfactorin the establishment a tax ratein of jurisdictions,because casino in RhodeIslandis the tax ratepaid by operators competing any with suchoperations.In Connecticut, authorized RhodeIslandwill needto directlycompete in competing casinos taxedat25o/o grossslot win with no tax on tablegamewin.2 This actsas are of a de factoguidefor the parameters a tax if RhodeIslandis to featurea facility that is of competitive with the Connecticut casinos.Any tax that exceeds amountwill put a Rhode this Islandoperator a competitive disadvantage the Connecticut to casinos right at the outset, above at enjoyed the Connecticut by casinos who andbeyond significant"first to market"advantage the havehadapproximately decade understand their marketandestablish loyalty with the very a to patrons RhodeIslandcasinomustcompete for. a o Lower Tax RatesDon't Necessarily Translateinto Lower Tax Revenues Largedestination resortcasinos tendto create largerrevenue a base thannon-destination facilitiesdueto the relative the range sizeof the facilities,the amountof visitation,the hoursof operation, highly competitive of products offeredto patrons, relativelyhigh directandindirectemployment, related the and tax multiplierimpacts.Moreover,largedestination resortcasinos tendto continuallyreinvestand in expand the their facilities,which alsoincreases tax base.For example, Atlantic City, Harrah's recentlycompleted fifth hoteltoweranda casinoexpansion doubledthe sizeof the casino its that from whenit opened ll2,9l8 square feet,developments havesignificantlyexpanded that to the revenue baseuponwhich the New Jersey %o 8 casinotax is applied. o Impact of a GrossGamingTax and Other TaxesPaid by Operator- A poorlyunderstood on component casinotaxationis that a grossgamingtax is a flat tax, assessed an operator of (andrelated risk) and(ii) the degree financial of regardless (i) the amountof capitalinvested of (profitability). Moreover, tax is separate distinctfrom otherstateandfederaltaxes success the and paidby an operator taxes. This lastpoint is importantin suchas stateandfederalcorporate of casinos two Indian establishing tax ratein RhodeIslandasthe operators the Connecticut a nationsthat do not pay stateandfederalincometaxesthat all other nations aresovereign for casinos. must advantage the Connecticut businesses pay,a fuither competitive we that factors, recommend the legislature Based uponthe above and Recommendation: Conclusion gaming win, including slotsandtablegames.While sucha tax is a25% tax on gross consider with the via assesses its compacts that higherthanthe payments the Stateof Connecticut somewhat with consistent that suchataxrate is fair, competitive, and tribes,Harrah'sbelieves Mohegan Pequot the established otherpartsof the country,andwill encourage level of capitalinvestment in rates business. for necessary RhodeIslandto havea first classcasinoentertainment

t As GaryLoveman illogicalfroma is on hearing, a25Yotax slotrevenues somewhat testified the StudyCommission at tablegameplay, which is not taxed,to reduce to perspective it providesan inducement an operator encourage for as State themonies theState. due
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V.

Is GamingEconomicDevelopment?

by by statements thoseopposed gaming,the objectivedataconsistently Despite unsupported casinogamingis a provenjob creator,a catalystfor and that demonstrates legalized regulated source public revenue.Unlike creativeincentives of rejuvenation, a dependable and economic on casinogamingdoesnot depend development, to established stategovemment lure new business by infrastructure and tax in for askingtaxpayers handouts the form of inducements, abatements, major improvements. around the surveyed evidence the the For two years, NationalGamblingImpactStudyCommission of that truly areengines andthe President casinos in countryandconcluded its 1999reportto Congress closeto casinos foundthat communities The and economic development revitalization. Commission andhigherper capitaincomethan less generally less experience unemployment, welfaredependence, benefitsof casinogaminghave economic that furtherfrom casinos.It determined oothe communities for whereopportunities economic communities powerfulin economically depressed beenespecially with officials from othercommunities local andtribal government arescarce.State, development gaming." impactof casinogamingtestifiedwith nearunanimityto the positiveeconomic proponents opponents gamingshouldbe of panelrepresenting and findingsby the bi-partisan These history, However,in its 65-year development. to the enough establish recordon the issueof economic the throughout atits26 properties anddevelopment first handredevelopment Harrah'shaswitnessed outsideChicagoand Shreveport, are UnitedStates.Two goodcasestudies in Joliet,Illinois located jurisdictionsrepresent significantlysmallerinvestment thanthat a both of which Louisiana, in contemplated RhodeIsland. of benefits the on Joliet,Illinois providesa greatlesson how local officialscanharness economic casino with revitalizing gamingto assist entirecommunity.Jolietcity officialscreditHarrah's an casino so downtumsof the 70sand80sthat haveplagued that a downtown hadbeencrippledby the economic manyRustBelt communities. foot with a 40,000square o To date, morethan$120million in theJolietproperty, has Harrah's invested and four restaurants, a2D4-toomhotel. barge, casino o with annualpayroll andbenefits in More than 1,600peopleareemployed theheartof downtown, totalingmorethan$62million. to about2.7 millioncustomers the casino. LastyearHarrah'satfracted

o

tax generatedtotalof $501million in gaming a o Fromtheopening 1993 March2002,the casino in to in and million goingto the state another $108million remaining thecity. rsvenue, with about$393 however,is not limited to the casinoitself. Thedevelopment, that and suchassewers roadways o Thecity hasspentabout$7 million annuallyfor capitalimprovements in benefita]l businesses Joliet.

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r

uniff thecity's downtown elements and streetlights, otherdesign with Improved streetscapes newsidewalks, and entertainment retail district.More than$5 million wasmadeavailablefor rebuildingthe city's mainpolice development efforts. devoted thecity's educational to station, morethan$11million hasbeen and

plan o Harrah'scommitment capitalallowed city to accelerate a25-year downtowndevelopment by at of the least20 yeils. in Joliethadsunk. Until Harrah'sopened 1993, to to the It's important remember depths whichdowntown The took placeway backin 1976. city has in construction theCity Center newprivatesector Joliet'smostrecent its developing imageasa destination andcity offrcialsareaggressively of takenon a newattitude rejuvenation, prisonthatfor decades by afar pointfor entertainment recreation, cry from whenit wasidentified the state and buildingssuchasJoliet'sUnion with a wealthof rehabbed is now populated its anchored economy.Downtown structures, and and (built in 1912),the AuditoriumBuilding(1891), theLouisJolietHotel (1899). These Station residential use. LastMay, Joliet'snewminorfor ten are at least others, beingrenovated retail,office,and/or baseball playingin a brand-new million downtown $25 team- theJolietJackhammersbegan league basebatl to bringsNASCAR fansby the thousands the trackjust southof Speedway stadium.And the new Chicagoland All-American City contest. a Jolietwasnamed finalistin thenational ttrecity. ln 1999, in had presents similarstory. Ten yearsago,Shreveport a downtown, a in Harah's Shreveport Louisiana each for which no onewantedto visit, work, or live. Now it is a regionaltouristdestination millions of people year. r property, with a 30,000 morethan$225million in the Shreveport has To date, Harrah's invested and four restaurants, a 5l4-roomhotel. foot barge, square casino in people employed theheartof downtown. are Morethan1,800 to attracted about3 million customers the casino. LastyearHarrah's

o o

is Again,thedevelopment not limitedto thecasinos. art and into o Throughout are buildings beingrefi.rbished lofts, shops, galleries existing Shreveport, downtown would not be that manyfrom borderingstates, otherwise patronized the casinopatrons, by antiquestores visitingShreveport. and o A $30million urbanentertainment district calledRivertown- a mixtureof new construction - is underway promises change urbancoreevenmore. The Shreveport's to and of rehabilitation others leadingtourist that leased alreadyexceeds of BealeStreetMemphis,the second space retaiVentertainment in Bourbon Street New Orleans. to in destination the South r of with the exception At buildout,Rivertownwill employ700workers,the largestinflux ofjobs in decades in casino thedowntown. by employment. Hanah'sanda competing thecasino

madefeasible is to center scheduled opensoon,a project o A new$85million, 350,000 squre foot convention now alsohasan IMAX theateranda Science by the adventof the casinodowntown. DowntownShreveport taxes. in flrnded, part,by casino Center Discovery

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o As PamAtchison,ExecutiveDirectorof the ShreveportRegional Arts Council stated "Hanah's brokeground form the start was to at in Shreveport June1993,andeveryone the company determined makea statement in people. ... In manyways,its members goodbusiness as thattheywereasmuchaboutbeinggoodcommunity and Harrah's management us, teamhasmentored helpingus marketprogrztms eventsandattractan audience, you experience. has It hasa goalthateverytime you visit oneof its casinos, havea uniqueandmemorable memorable experience the arts. Hanah'sis a problem in solver a taught a lot abouthow to create unique, us volunteer efforts andcommunityactivistandis willing to put its moneywhereits mouthis. It encourages be because is committed havingits employees a hugepartof the community." it to redevelopment work at This is economic wherecasinogaminghas in suchredevelopment TunicaCounty,Mississippi, Harrah'salsowitnessed jobs for local residents, the providedthousands well-paying changing story of TunicaCountyfrom of Harrah'shas and to and oneof economic socialdisgrace oneof true economic socialempowennent. outsideof Phoenix, Cherokee the it witnessed on tribal landswith the Ak Chin Indianreservation Indiansin Kansas the Rinconband and in the reservation North Carolina, PrairieBandof Pottawatomi in can of MissionIndiansoutsideof SanDiego. And, the same be saidfor Harrah'sotherproperties Nevada, lowa. and Atlantic City, New Jersey, Missouri,Louisiana, with local vendors also on Thedirectjobs created Hanah'sandits spending goodsandservices by spent In with over$5.4billion in assets, in of assist redevelopment communities. 2001Harrah's, $1.38 (now over paid its then 39,154employees vendors throughout country. It the billion with 16,073 -not morethan $942million in wages, countingthe significantbenefitspaid. Total wages 44,000) jobs arevariedandoffer opportunity includingbenefits amounted morethan$1.2billion. Casino to jobs arein the areas CasinoOperations (including of with a wide varietyof skills. Casinos to people Marketing(includingpublic relations, tablegamesupervisors), machine technicians, cashiers, dealers, (includingsecurity,food and professionals), CasinoServices marketresearch advertising and (including HumanResources purchasing, maintenance facilitiesspecialists), and and retail beverage, and staffingandtrainingspecialists) FinanceandAdministration relations, compensation, employee informationtechnology payable, (includingaccounts audit,payroll,incomecontrolspecialists, professionals, lawyers). and yearsago, several telling factswerediscovered: surveyseveral Based uponan Harrah'semployee o o o food stamps because theirjobs. of that indicated theyno longerreceived llo/oof theemployees of indicated they havebeenableto get off welfarebecause their jobs. that l2Yoof the employees of because their indicated they hadbeenableto get off unemployment that l9o/o the employees of jobs.

of o 73Yo the employees indicated they hadbeenableto get betterhealthcarebecause their that of jobs. o 660/o the employees indicated that they hadbeenableto improvetheirjob skills. of

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in communities.It is alsonoteworthythat Harrah's These the kind of factsthat assist redeveloping are in paidout approximately donations sponsorships 2,029recipients and to $32.9million in charitable 2001. will development, there'sno way of gettingaroundit. Gaming Casinos bring growthandeconomic muchlike any new shopping mall, development affectthe qualityof life in a community, can can can convention center, major touristattraction affecta community.All of thesedevelopments or generate traffic, andplacenew demands public naturalrosources, vehicularandpedestrian on consume govemments the time to address developplansto take and If utility infrastructures. stateandlocal -mitigatetheseimpacts-- just astheywould for anyothermajor development theseimpactscanbe or altogether.Gamingdoesnot, however,leadto the anticipated lessened and considerably avoided to unsubstantiated mythsthat thoseopposed gaminghaveput forward. SeeCasinoGambling:What NegativeConsequences citesto authorities and therein. What is clearis thatjoint planning aboutthe is between thosein the industryandin govemment the critical. VI. Conclusion

clearthat the Statemustmakereasoned and Themodelingsetforth in SectionIII makes abundantly it gaming. If it determines to informeddecisions regarding how it proceeds with the issueof expanded ramifications to to and not expand form of gaming,it needs be prepared dealwith the economic any gaming. If, on the otherhand,it wantsto pursues expanded tax shortfall,especially Massachusetts if tax that locatinga destination casinoresortin the Stateandgainingincremental revenue is examine (andis at risk to Massachusetts), needs be thoughtfuland there to currentlyexported Connecticut to etc. analysis developing "rulesof the game"- taxes,regulatorystructure - assoon of the deliberative possible that informeddecisions be madeby all participants appropriate and legislation can so can as a to IV, be drafted.As setforth in Section Harrah'srocommends tax at25o/o incentthe level of capital (albeitslightly higher)than facility, which is consistent necessary developa competitive to investment by authorities.We submitthat suchataxrate would be fair, will spur thetaxescollected Connecticut in will in level of capitalinvestment WestWarwickto assist its redevelopment, create the appropriate jobs in the casino) jobs andthousands permanent (bothconstruction and, of employment significant of tourismanchorfor the State. will encourage creation an additional the ultimately, Tribe propose discussions with a If the State leadership inclined,Harrah'sandtheNarragansett is and to an representing interests the State determine economic regulatory the of smallteamof persons all that structure canwork for RhodeIsland. Suchplanningwill assist partiesasthe Legislative in the analyze datacontained gets and Session underway will permit Stateofficialsto independently prior to hearings beingheld at which all suchinformationwill be availablefor public this paper scrutiny.

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