Beat the Casinos? Not Yet.

As always, gambling is a numbers game

Aug 29, 2001 at 4:00 am
The box scores are in from fiscal year 2001, my fellow casino patrons, and the news is not so good:

We're still losing. In fact, we're getting smoked like never before.

In the 12 months ending this past June 30, Missouri's 10 casinos took in an astounding $1,049,216,018 in something called "adjusted gross revenues" from 22,709,349 patrons, according to Missouri Gaming Commission figures, dutifully reported on the agency's Web site, Another word for AGR is "winnings," as in "casino winnings."

It might be more helpful for casinogoers to think of AGR as "losses," as in "casino-customer losses," but neither the MGC site nor the casino industry uses such a word. The MGC prefers the more appropriate phrase "win per patron" to summarize our losses.

For the past fiscal year, the "win per patron" was $46.20. That's up sharply from the previous fiscal year, when it was $39.19.

Relative to the casinos, we the people do not appear to have become increasingly smart, despite those inner voices assuring us to the contrary. There seems little danger that a despondent casino industry will be tracking its "loss per patron" in the foreseeable future.

I recognize that "Casino Bites Man" is hardly a news flash. But the size of this monster is truly something to behold.

In the past year, the midsize state of Missouri collected more than $210 million in gaming taxes and $94 million in admission fees. The revenues were then split between state and local governments.

It's easy to see why politicians hunger so lustily for casino riches -- and why the casinos, ever gracious with campaign contributions, have such clout -- but left unanswered by the numbers is their true net effect. Setting aside the tourism benefits -- which can't be too overwhelming, with all the casinos in surrounding states -- all that money has to come from somewhere.

But that's a topic for another day. For now, let us behold the majesty of our losses.

Are we just growing more stupid by the year? Not to worry, says Kevin Mullally, MGC executive director.

"What you're seeing is simply the maturation of the market," Mullally tells me. "When the casinos first open, there are more people who try them out for fun with $5 or $10 or so, and that drives the average loss numbers down."

As the novelty wears off, he says, the numbers begin to reflect the losses of more consistent and serious gamblers, which are higher. But those individuals aren't necessarily losing more from year to year, Mullally explains.

Mullally may soon be considered for an ambassadorship somewhere. In the meantime, the casinogoing public still doesn't appear to have quite conquered the gilded enemy, reinforcing the age-old rhetorical question "Just how do you suppose they could afford to build such a fancy casino?"

The casinos' good fortune even seems reasonably immune to the nation's economic downturn. Although the MGC reports that actual attendance on the boats was down no less than 9 percent from the previous year, the decline was easily offset by the greater losses per customer.

I'm sorry. That would be "wins per patron."

To be honest, I stumbled on all these eye-popping numbers by accident while following up on a Post front-page story and lead editorial this week warning darkly of shortfalls in a state program to aid compulsive gamblers. However nice its intentions, the Post rather grievously overstated the funding problem, right down to confusing the number of "customers" with the number of "admissions" (the average customer counting as more than two admissions on the basis of length of stay at the casino).

The Post accurately pointed out that state law allows the state to set aside a penny per admission to help addicted gamblers -- a number that could have totaled $470,000 -- and that only $190,110 was earmarked for that purpose in the current state budget. It also noted that a growing caseload of compulsive gamblers would likely mean that the state would run out of funds if no supplemental appropriation came forth in the next legislative session.

I had hoped to jump on the pile and attack both the state and the casinos for callous insensitivity to the problem of compulsive gambling, which is not only tragic but exploding (at least in good part as a result of the proliferation of casinos). But a funny thing happened on the way to that angle: It turns out that the funding crisis isn't a crisis at all. Mullally says he has little doubt the Legislature will fix it should a larger-than-expected caseload materialize.

Worse yet (from a columnist's standpoint), it appears the state is uncharacteristically ahead of the rest of the nation with its Missouri Alliance to Curb Compulsive Gambling, which combines the efforts of the MGC with the state Department of Mental Health, the state lottery, the casino industry and the Missouri Council on Problem Gambling Concerns, a counseling association.

The alliance promotes a telephone helpline (888-BETS-OFF) along with other efforts to encourage problem gamblers to seek help. Mullally claims it's "good news" that the state caseload of such gamblers is growing more than expected, because it suggests the alliance's efforts are having an effect.

He's probably right. But more important is a bit of wisdom I stumbled on when checking out the problem-gambler angle, which came from Jim Whiteley, spokesman for the Missouri Council on Problem Gambling Concerns.

"I would put the majority of available money into educating teens about the adverse effects of gambling," Whiteley says. "They're the most at-risk group of developing this problem, because they're the first generation of Americans whose parents have had the legal opportunity to gamble in casinos throughout the country.

"Gambling is condoned and accepted now. In previous generations, it was seen as a vice, but now it has been relabeled as entertainment."

Indeed it has.

But entertainment or not, this much is for sure, judging from the Missouri casino experience: There's a whole lot of money being lost here.

They could teach it in math class.