The Phillips Report: Gambling On Our Economic Future

When the issue of having a casino in Peterborough comes up in casual conversation, the most common reactions are usually physical, not verbal. Either people's eyes roll or their shoulders shrug. Most often, people are against it or ambivalent to it. Rarely does anyone engage the idea with a sense of excitement or express how important a casino would be for the future of the City.

Those who do articulate their support first argue that it creates jobs and that it is a way to attract more tourists. Both arguments have some merit. Those who are against it see it as having potentially serious social consequences, such as those who will develop a gambling "addiction." This position has some merit, too. There are, however, some facts that need to be considered when considering the reality of a casino.

First, collectively, the patrons of a casino always leave the casino with less money in their pockets than they had when they walked in. "The House" always gets its' cut, which is substantial, and is used to create the jobs at the casino. 

The second fact, that most people choose to ignore, is that what determines the difference between the money one has in their pocket when they enter the casino versus the money they have in their pocket when they leave it is determined by chance—luck—not their natural good fortune or fate. 

The third fact is that there is a considerable financial investment that needs to be made to create a casino.  This is rarely mentioned in casual conversation. It would be interesting to know if people think that this investment could be better used more effectively in creating jobs and economic opportunity in the City.

Finally, and is most concerning, is that most people believe that the only source of economic growth comes into the community from outside it. The casino is coming to us, not being created by us. In effect, there is a general view that our economic development is up to others, outside the community, not ourselves. This view considers marketing Peterborough as the only means of growing the economic opportunity.

It is time that we come to grips with the opportunities for growth that come from within the community. We need to rid ourselves of the myths that constrain us and seek out, and invest in, the opportunities that already exist in our community.

The most generally accepted approach to future growth is to invest in "shot gun marketing"—shooting out the "message" about Peterborough and seeing what it hits, and comes to us. Although there are often comments made about investing in building on what we already have in the community, there is little evidence that there is any significant investment in it. The idea that there are strengths in the community to build on is given lip service, at best.

The "shot gun marketing" approach, ironically, is a lot like a casino. We are investing in activities where the payoff is determined by chance. To even the most ardent casino supporter, it wouldn’t make any sense for a successful local business looking at making a $1 million investment in its growth to spend the $1 million at the casino and expect a better financial return than investing in their business.   

The Peterborough economy—the mix of the private and public sectors—is more diverse today than it has ever been. Unlike the local economy of fifty years ago, we are blessed with an economic foundation that can support a much larger economic structure than we now have. To build this economic structure, we need to find new ways—investing in new ways—to build on our strengths. Making these investments from our community, in our community, is much more likely to lead to meaningful, sustainable economic growth than gambling on others coming to "save" us.

The arguments for and against the casino belies the real issue: how we can best spend public- and private-sector funds to help us meet our economic potential? The investments required for a casino to become a reality here could be better spent investing public and private funds in building on the considerable strengths that already exist in this community.

It is not difficult to determine where the opportunities for growing the existing economy are. In fact, that work has already been done. Obviously, given the discussion we are having about the casino, there are funds to invest. Now it’s about how to spend them.

The sad reality is that the longer we neglect investing in strengthening and growing what we already have here, the more we lose our competitive advantages to other communities that are making investments in strengthening their communities.

The real lesson coming out of the discussion about the casino is that thoughtful and meaningful investments in the existing economic strengths of Peterborough are more likely to pay off than gambling with our hard earned economic resources.    

[Contributed by PtboCanada's Tom Phillips. Ph. D. Phillips is Professor in the business programs at Fleming College and Trent University.]

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