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Economic Impact

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A Casino for San Pablo: A Losing Proposition

Author: William N. Thompson, Ph.D.

View the full report here.

Summary of Findings

Total annual economic loss to the Bay Area: $193,119,493

The casino would create an economic imbalance negatively affecting the Bay Area economy.

· 90% of casino revenues will come from Bay Area residents.

· Only 62% of casino expenditures (jobs & advertising) and profits (tribal share only) will remain in the Bay Area.

Costs created by new compulsive gamblers will further impact the local economy.

· New compulsive and problem gamblers will create additional economic, social, and governmental costs.

· The impact to only Alameda and Contra Costa counties is projected to be $54,899,128.

Contra Costa and Alameda Counties will be hardest hit.

· The total economic cost to the Easy Bay will $173,131,033 (90% of total).

Q: How much money would this casino make?

A: Projected annual revenues are $499,028,000. Projected profits for casino proponents are $169,514,000 annually.

Q: Where will this money come from?

A: Casino revenues are solely derived from player gambling losses. The patrons in the San Pablo casino will overwhelmingly come from the local area; 55% will come from Contra Costa and Alameda Counties and 35% will come from the remainder of the Bay Area.

Q: Where does the money for casino expenses go?

A: Large portions of both profits and casino expenditures would leave the Bay Area. Nearly $20 million each year will be spent on slot machines and other gaming supplies that are largely produced in Nevada.

Q: Where does the money for casino expenses go?

A: The Bay Area will retain only 60% of the casino’s profits ($102,507,828). Most of this amount represents the tribal share, almost all of which leaves the Contra Costa and Alameda Counties. $50 million will be given to the casino’s managers and financial backers, none of whom reside in the Bay Area.

Q: What does this loss of money mean for the Bay Area?

A: The money lost at the casino is a diversion of disposable income that will hurt local merchants. This will lead to less sales tax revenue for local governments and will also likely effect employment levels. To gain a sense of scale to approximate job loss, one can assume that each dollar lost to the local economy will eventually be one less dollar towards local payrolls. A conservative estimate indicates that 7,219 jobs will be lost from other industries. Taking into account the creation of 2,000 jobs at the casino, we will see a net loss of 5,219 jobs.