La Crosse Tribune: Gambling expert says casino will hurt La Crosse economy

Anti-casino groups believe they have acquired the ultimate weapon in their fight against a proposed Ho-Chunk Nation casino in La Crosse County.

The No Casino Group, comprised mostly of local Tavern League members, hired a nationally-recognized expert on gambling to examine the economics of the Ho-Chunk proposal.

Professor William Thompson of the University of Nevada-Las Vegas estimates in his report that the La Crosse area would lose $83.5 million, instead of gaining nearly $100 million as the tribe's consultant estimates.

Thompson, a consultant for the gaming industry, attributes the potential economic loss to several factors, but mostly because fewer than 40 percent of gamblers would come from outside the area, while the casino would spend or distribute more than half of its earnings outside the area. He also looked at social costs, including pathological and problem gambling.

"The Tavern League has always believed a casino would hurt La Crosse," said Jeff Woodruff, the league's president. "This is proof it would hurt, and not just the taverns."

La Crosse Mayor John Medinger, who has read Thompson's report, noted that it said a casino "might be good for the city but not for the region." But taken all together, Medinger said that Thompson's analysis, "if true is not very positive for our community."

Medinger said most of the people he has talked to lately about the casino are concerned about jobs in light of recent massive layoffs at LaCrosse Footwear Inc.

The No Casino Group paid Thompson $2,000 for his report. Thompson is also a consultant to the Lac du Flambeau tribe, which is trying to open a casino in Lafayette County. In that case, his opinion is that proposed casino would have economic benefits because most patrons would be from outside the region.

Thompson has also served as a source for the La Crosse Tribune's stories about the casino proposal since midAugust. The newspaper was not aware of his work for the No Casino Group until last week. Woodruff said he hired Thompson as a consultant six weeks ago.

Woodruff said Thompson is a credible expert on the economics of gambling and noted that Ho-Chunk legislative attorney William Boulware has quoted other studies by Thompson several times during public forums on the casino. Michelle Greendeer, a tribal attorney and spokeswoman, said Friday. that Thompson's report is "based on lots of what-ifs and possibilities" but not actual numbers that reflect the way the Ho-Chunk casinos are operated. "It's -too bad he didn't consult with the Nation," Greendeer said.

Thompson based his report on figures used in the tribe's own economic impact analysis, which was done by the Innovation Group of New Orleans. That study predicted a casino would create 674 new jobs and pump nearly $20 million a year in payroll into the economy. Innovation Group also looked at spending outside the casino by patrons who come from outside the area on things like meals and hotel rooms.

"Unlike the Innovation Group, however, I ask the source of the money that will be spent in the casino," Thompson wrote in his report. "There can be no impact assessment unless we know where the money comes from and where the money goes."

Thompson acknowledges that "the large majority of players at the casino will be from outside of La Crosse" and many casino employees will live here.

"The casino may produce benefits for local residents of the city and county," Thompson said. "However, the city and county is part of a region - it prospers because its commercial and public institutions serve a wide area that is not confined by artificial political boundaries." Because of that, he said, he looks at the region with commercial ties to La Crosse.

Thompson considers the region to be the counties within a 450-mile radius of La Crosse. There are approximately 442,537 adults in the area, and he estimates they would make 973,581 visits to a La Crosse casino per year, comprising 60 percent of the patrons.

A casino would make $53 million a year on these area residents, he said. "This money is already in the regional economy. That it is now being gambled instead of spent in other ways does not mean it is creating value in the local region. It is not."

Greendeer said there's nothing wrong with local residents patronizing a Ho-Chunk Nation casino in La Crosse. "We're proud they're going to choose our facility," she said.

Outsiders would bring in $34.1 million, Thompson said, acknowledging that this is new money to the local economy.

He also said people coming to the local area to stay would likely spend $6.9 million on hotel rooms a year, though only half that money would stay in the local economy.

However, Thompson said money will be flowing out of the local economy for several purposes, including contributions, to state government, payroll taxes and tribal profits. He projects that $46 million will leave the area. Between the new money coming in and the money going out, Thompson predicts the local area would lose $11.8 million a year.

Greendeer took issue with Thompson's figures on how much money would leave the local economy, noting that Thompson counted part of worker benefits and state and federal payroll taxes.