Mark Bennett: Pocketbook worries may not diminish turnout at new casino
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Inflation and taxes are dominating thoughts and conversations.
Consumer spending, business investment and the job market remain strong, but discussions about the economy tend to circle back to rising prices and taxes. Both played a central role in the Vigo County primary election last week, when voters defeated a school-construction referendum.
Remedies for inflation are brewing, such as the Federal Reserve’s plan to raise interest rates to curb rising prices. Still, inflation doesn’t budge easily, as economists emphasize, and could continue into next year.
Even then, the Fed’s interest rate hikes could potentially trigger a recession in the latter half of 2023.
So, with inflation and taxes local high on people’s minds, it’s intriguing to consider how that mindset could affect the community’s response to the incoming casino.
Construction could begin this month on the $260-million Churchill Downs Queen of Terre Haute Casino and Resort on Terre Haute’s east side, near Interstate 70’s exit at Indiana 46.
The complex is expected to take 14 months to build and could open in the latter half of next year. Inflation, a global problem, could still be ongoing. Or a recession could be underway. And, county taxes won’t be any lower.
Could that mean fewer Terre Haute and Vigo County residents than originally expected will visit or spend at the Queen of Terre Haute?
Maybe. Maybe not.
Casinos across the U.S. just recorded their most profitable month in history, the American Gaming Association told The Associated Press on Wednesday. Commercial casinos won more than $5.3 billion from gamblers in March, exceeding the previous record of $4.92 billion last July.
America’s casinos also just completed their best first quarter of any year ever, The AP reported.
In fact, it almost became the industry’s most profitable quarter in history, but came up shy of the record set in the fourth quarter of 2021, when casinos won $14.35 billion from gamblers.
As AGA president and CEO Bill Miller told The AP, the casinos’ record start this year came “despite continued headwinds from supply chain constraints, labor shortages and the impact of soaring inflation.”
Instead of pulling back, “consumers continue to seek out gaming’s entertainment options in record numbers,” Miller said.
Indiana played right along with that trend. Casino spending per Hoosier adult averaged $475 in 2021, according to numbers provided by the AGA to the Tribune-Star on Thursday. Of course, that’s an average, and more than half of Indiana adults don’t frequent casinos. The calculation includes land-based casino slots, table games and sports betting. It marked an increase from pre-pandemic 2019, when casino spending by Hoosier adults averaged $438, according to AGA figures reported by USA Today and the 24/7 Wall Street financial news site.
Only Iowa, Louisiana, West Virginia, Delaware, Mississippi, Rhode Island and Nevada had higher casino-spending-per-adult averages in 2019.
And Indiana increased that average in 2021, even as the country began recovering from the crushing 2020 pandemic recession and supply-chain-driven inflation set in. In March, Indiana’s casinos also recorded their best month since 2013, said Ed Feigenbaum, publisher of Indiana Gaming Insight.
Casinos became a go-to option for entertainment in the summer of 2020, Feigenbaum explained. While most concerts and movie theaters remained closed under COVID-19 precautions, Indiana casinos reopened in June after being shuttered for three months.
“So people went to casinos,” Feigenbaum said, “because alternate forms of entertainment weren’t out there.”
Such turnouts also could happen in 2023, when the Churchill Downs casino opens in Terre Haute, even as Vigo County residents cope with inflation and their property taxes remain the same. If gas and food prices are still high, many residents may choose a local casino visit as a form of entertainment, rather than paying for expensive fuel and restaurant food on traveling vacations.
“Even in times of recession, people are looking at forms of entertainment close to them,” Feigenbaum said.
It’s hard to tell how many Vigo Countians will be spending time and money at the new casino. A survey in 2021 by researchers at Prevention Insights, part of Indiana University’s School of Public Health at Bloomington, found that 46.2% of Hoosier adults reported visiting casinos to gamble during the previous year.
A separate survey, by the National Institutes of Health in 2016, found the chances that the respondents gambled in the past year, were frequent gamblers, or were problem gamblers were greater if they lived within 30 miles of a casino. Thus, the 46.2% of Indiana adults gambling at casinos could be higher in Vigo County, given that a new casino will be close by.
Inflation certainly didn’t slow the flow of casino visits by Americans and Hoosiers in March. It may not deter visitors to the Queen of Terre Haute next year, either.
