PJ Mercanti promises to reveal "the truth" behind his quest to create a downtown casino in this month's Urbanicity. The result is disappointing.
By Adrian Duyzer
Published February 13, 2013
This month's Urbanicity featured an article by PJ Mercanti entitled, "The Truth Behind The Quest To Create An Entertainment Destination".
What an opportunity: a chance to get the hidden truth from a key player in a controversial debate with hundreds of millions at stake! Unfortunately, the truth is that "the truth behind the quest" is less than candid, less than reasonable, and much less informed than one would hope.
The article opens with a question that a family friend posed: "PJ, you have worked hard your whole life building your reputation in this city. Are you sure you want to get yourself involved with this casino discussion?" Mercanti's response is definitive: "Absolutely, I am prepared to pursue this initiative", citing two reasons: "Creating economic activity and giving back to the city that we love."
Any explanation for the Mercanti family's involvement that neglects that they stand to make millions is not a promising way to start exploring "the truth behind the quest", unless this is what Mercanti means by "economic activity".
Earning a profit is not shameful, and no one expects businesspeople to invest millions of dollars for purely altruistic reasons. Why not acknowledge that this is a multi-million dollar opportunity for the Mercanti family that also aligns with their other beliefs?
The remainder of the lengthy article is split into sections, starting with this one. I'll follow the same structure and use the same titles.
Mercanti opens with a conciliatory tone: "...I would be irresponsible not to acknowledge the social costs that need to be addressed among the 1-3% of patrons with addictive tendencies." "[M]ore can be done by private sector gaming operators to create and fund dedicated addiction service programs," he writes.
However, after speaking "at large" with addiction counselors from Mission Services, Mercanti is "confident that the right type of programming can be put into place that will help to substantially mitigate the impacts of problem gambling in our community."
Is Mercanti's confidence well-founded? According to a report, "The Health Impacts of Gambling Expansion in Toronto", which is included as an addendum in the City of Hamilton report prepared by Dr. Elizabeth Richardson, Health and Social Impacts of Gambling, it is not:
While there are many interventions available for problem gambling, much remains unknown about how to treat problem gambling. Only a minority of problem gamblers (1-2% per year) seeks or receives treatment. Furthermore, there is limited evidence on the effectiveness of interventions to prevent problem gambling. There is currently a need for better evidence on how to effectively mitigate the negative health and social impacts of problem gambling.
Mercanti also makes the now-familiar claim that it doesn't matter whether or not a casino is located nearby. "People will seek out gambling as a form of entertainment, no matter how near or far a facility may be."
But if that were true, why would there be any pressure at all for a downtown facility in the first place? If the casino's location is immaterial, there is no reason not to expand the one in Flamborough. In reality, all the players in the casino debate are aware that the closer the casino is to a population centre, the more gamblers - problem or otherwise - it will attract.
Mercanti does marshal some evidence in support of his position, a study that concluded that there were more problem gamblers who lived farther from the Montreal casino than who lived closer to it. The study's author is open about its limitations, which are not mentioned by Mercanti, and it contradicts most other studies on the subject, as well as the reports submitted to Hamilton and Toronto City Councils in recent months.
This doesn't stop Mercanti from using the study to make an unusual argument, namely that the presence of distant casinos, such as in Flamboro, Brantford, or Niagara Falls, actually increases the likelihood of problem gamblers in Hamilton more than a local one would. In other words, a downtown casino would reduce the number of problem gamblers in Hamilton!
Ultimately, though, Mercanti believes scientific studies on the topic are meaningless because they are "biased in favour of the personal viewpoint of the writer". Real proof "is found by asking stakeholders in the communities where gambling entertainment exists for their direct feedback".
This section can be summed up quite simply: it consists entirely of quotes from a Spectator article selected for their favourability to casinos.
In spite of the fact that numerous criticisms of casinos were levelled by people featured in that article, not a single one of these criticisms is featured, addressed, or even hinted at. Mercanti concludes by writing, "Contrary to the opinion of the opponents, it appears that casinos, in fact, do provide tremendous spinoff benefits that the entire community can enjoy."
If you hadn't read the Spectator article for yourself, you could be forgiven for believing that the people interviewed were unanimous in their support for casinos. You would be wrong. Here's just one example, a quote from Antoinette Lech, Director of the mental health department for the County of Niagara (U.S.A.):
There have been a number of crisis situations come to our attention, where people have lost in their gambling adventures, and in desperation have attempted to take their own life. We’re aware of other cases where people have gone to the casino and neglected children because they leave them in their vehicle for long periods of time unattended. Other cases with high profiles (involve) those who have embezzled from their employers ... in order to fund their gambling habit or cover their losses. We do not seem to have people presenting with gambling itself as the problem, it’s the other things that are a result of the gambling.
"Another common misconception about casinos that my research uncovered," Mercanti writes, "was the theory that most of the money from a casino leaves the community."
Not so, according to Mercanti - in fact, "the exact opposite proves true in that nearly all of the money actually stays in the community, $80 million in the case of our proposal". He goes on to detail the direct and spin-off economic benefits of the casino development, including 1200 jobs, $7 million in revenue and $3 million in property taxes to the City, millions of dollars in Trillium grants, and millions in provincial health care funding.
I haven't taken the time to analyze Mercanti's numbers, but then again, no one is questioning whether or not the casino will generate revenue. Contrary to Mercanti's claim that "nearly all the money actually stays in the community", however, most of the money is funneled to the province.
Exactly what percentage of casino revenues are kept by the province is difficult to determine, but we know that gambling generated $1.958 billion in profits for the province of Ontario in 2010. Of this sum, 6.6% went to charities and non-profits, and 2.6% was spent on gambling addiction research and treatment. Another 5.6% is paid by the province to communities that host casinos.
Any analysis of local economic activity generation must determine where this money comes from. Given that the casino does not produce a product which can be sold nationally or internationally, and given that there are numerous casinos in surrounding municipalities, it is clear that most of this money will come from Hamiltonians.
A certain percentage of it is money that is already being spent in other local entertainment destinations, like restaurants, that will be spent in the casino instead. I haven't seen numbers indicating to what extent this cannibalization of local entertainment spending will take place, but an argument for the casino that doesn't address this issue is deficient.
Additionally, whenever Mercanti mentions that the casino development will include a hotel and restaurants, recall that the Mercantis already promised to build a 44-storey hotel with 440 rooms, 150 condo units, and three restaurants when they bid to take over management of the Hamilton Convention Centre - a bid they won. When the developments associated with the casino are analyzed, these developments should be subtracted since they were already promised as part of the award of another public contract.
Mercanti writes, "when you say no to a downtown casino you are saying no to maximizing an investment opportunity, you are saying no to significant job growth in an area of the city that desperately needs it, you are saying no to positioning yourself to attract more national conventions, and you are saying no to creating a multi-faceted entertainment district that will help to give Hamilton added character and vibrancy."
The assumptions in this statement could all bear examination (for example, when he writes of maximizing an investment opportunity, is he speaking of his own opportunity, and is it our responsibility to maximize it?), but suffice it to say that this is a gross simplification of the issue. If all these things were guaranteed true and there were no downsides, obviously the casino would garner little opposition. But they are not guaranteed to be true, and the downsides are substantial and well-documented.
Mercanti reveals his disdain for the casino's opponents, who "are satisfied with where Hamilton is," while its supporters "want to see Hamilton catapult into a world-class destination". Hamilton is poised to realize its true potential, but "serial activists" have "halted the development of major projects in this city for generations". They "fail to see what this city could be", and selfishly perceive the casino project as "competing with their own personal initiatives".
These comments, like the infamous "people who really count" comments, are as ill-advised as they are bizarre. We know that Mercanti is acting in his own self-interest to the tune of millions of dollars. But when community leaders, health professionals, pastors, city counselors, and ordinary citizens protest against a casino, what "personal initiatives" are they advancing? And what "major projects" that would be unquestionably positive for the city have been halted by "serial activists"?
Mercanti either doesn't realize or refuses to acknowledge that to many Hamiltonians, the claim that building a casino in Hamilton will transform Hamilton into a "world-class destination" is unconvincing.
Few Hamiltonians and certainly none of who have travelled to truly world-class destinations believe their hometown is in the same category as London or Paris, for example. This doesn't mean that Hamilton cannot attract visitors, and to achieve this it is helpful to have high-quality hotels and convention centres. But it does mean that we would be wise to carefully steward Hamilton's unique culture, one that is undeniably authentic, grassroots, and real, and avoid taking steps that dilute it.
Nor are Hamiltonians under any illusions about the number of people who live in poverty in our city and who suffer from mental illness, addiction and homelessness. It is not unreasonable to weigh the casino against suicides, wrecked families and destroyed finances and find the casino wanting. Those who speak against a casino on this basis do so because their conscience commands them to, not because the casino competes with their "personal initiatives"!
On the whole, Mercanti's "truth" is unconvincing. Its flawed arguments, insincere gestures of conciliation, and eventual open disdain for those with an opposing point of view disappoint where they do not offend. If an article is a mirror of its author, this one reflects someone who seeks his own personal gain and is willing to say anything to get it.
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