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Friday, July 30, 2010

Heidepriem Wrong, Daugaard Thinking on Casino and Scarcity Mindset

Some days it's hard to be a South Dakota Democrat. Our gubernatorial candidate Scott Heidepriem has declared his first priority as governor to be convening a task force to figure out how to build a mega-casino in Sioux Falls to combat the purported economic drain that will be caused by the under-construction Grand Falls casino across the border in Larchwood, Iowa.

South Dakota's first priority: building another casino. I'm having trouble working that into a campaign slogan.

Heidepriem's proposal does tie together a whole mess of potential voting blocs. If you buy his argument, his fight-fire-with-fire proposal wins local Chamber of Commerce types, Sioux Falls event center boosters (Heidepriem says he'd direct casino revenues toward building that grand dream for Sioux Falls), and Native Americans who might run the Sioux Falls-area casino.

But I get a bad vibe from the proposal. If we're making a bigger pie, it's a gambling pie, and I don't care much for that pie as the staple of our economic diet. Much of Heidepriem's own reasoning is that gambling is bad, it causes social problems that we're going to have to pay for, so we might as well cash in on the revenue side, too. I have trouble getting up my ambition to fight to expand an industry that causes addiction and other social problems. (But I eagerly await riffs on this theme from Mr. Newland and activists of other flavors to advocate legalizing marijuana, prostitution, gay marriage....)

And if there's only so much pie (and that seems to be the competitive tenor of Heidepriem's "Don't mess with South Dakota" press release), then we're really gambling that as the two casinos compete, the one on our side of the border will win and drive those darned Iowans out of work. "Screw Iowa!" doesn't sound like a great rallying cry for the troops, either.

Republican gubernatorial candidate Dennis Daugaard is playing Mr. Mellow on this issue. He might also be playing Mr. Logical. He looks at a casino in Lyon County, Iowa, with a population hardly 6% the size of adjoining Minnehaha County. Daugaard may be thinking what I'm thinking, that an Iowa casino might not be a zero-sum game:
  1. We're already seeing $7.5 million of the $50 million construction budget go to South Dakota contractors.
  2. The casino will hire over 700 people. There are 788 people in Larchwood, and I suspect some of them are already spoken for jobwise. There are 5,595 people looking for work in the Sioux Falls metro area.
  3. Suppose 100,000 out-of-staters say, "Hey! Let's go gamble in historic Larchwood, Iowa!" Do you think they're going to fly into Larchwood Metropolitan Airport? No. They're going to fly into Sioux Falls. They're going to rent a car in Sioux Falls. They're going to stop at the Sioux Falls Target to get the toothbrush and swim trunks and whatever else they forgot to pack. They're going to spend a day golfing and gambling in Larchwood, say, "Well, that was fun, now what?" And then they're going to come back to Sioux Falls to see a movie or a show at the Pavilion or whatever other brilliant entertainment a synergy-minded convention and visitors bureau can come up with. And for every visitor who wants to spend the night in tranquil, bucolic Larchwood, I'll bet we can find one or two who'd prefer to end the day with jazz and a martini under the sparkling downtown lights of Sioux Falls.
Heidepriem's thinking on casino competition sounds too much like the small-minded thinking of various small towns around South Dakota who think any gain for a nearby town is a loss for them (see Madison's and Hartford's small-minded reaction to Rutland's and Montrose's open enrollment success). Our neighbor's success doesn't mean we have to compete to take that success away. Think Sturgis rally: Deadwood and Custer and Wall and Mitchell don't try to outdo Sturgis with a bigger rally and put that event out of business. We all put up the "Welcome Bikers!" banners and offer drink specials and other events to cash in on the increased flow of visitors.

Once again, I can hear my fellow Dems telling me, "Ah, but this is the good political strategy! South Dakotans will eat this stuff up!" Yeah, maybe they will. Maybe raising a bold middle finger across the Big Sioux toward our dastardly Iowegian neighbors is just the thing to get the typical South Dakota voter fired up and ready to go Dem in November. And if Iowa flipped us the bird first, well, maybe they have a fight coming.

But I don't like it. Instead of trying to drive Larchwood out of business, we should focus on looking for other opportunities to build on the increased economic flow Grand Falls Casino will draw. If Iowa's building better mousetraps, let's fire up the cheese factories.

Think synergy, not scarcity.

p.s.: There has been some bragging from the Iowa side about how the "vast majority" of Grand Falls Casino's revenue will come from South Dakota. Is it just me, or does anyone else think that building a business model on the promise of drawing lots of big-spending South Dakotans is... overly optimistic?


  1. Of all campaign moves to go with, this is the best the Dem can do? A mega-casino doesn't invoke the passion, the vision, the leadership I'd like to see from Scott. (and from our dems everywhere)

    We could do so much better for issues, and for our state too. How about a new day one vision, maybe turing the keystone valves off at the border, or better yet, showing hyperion the door too.

    Here's a new thought all together, how about trying in the least bit to connect with the younger generation, with promises of creative, scientific, progressive jobs might be a start, although the prospects of low-wages working at a mega-casino must seem dreamy to this leadership circle we have now.

    Make some real noise Scott, and Dems everywhere, make a difference, give us a future we can invest in, not another hole to throw our future into.

  2. Heaven forbid that the Heidepriem campaign would actually look for useful ideas instead of assuming they are already blessed with divine knowledge and wisdom.

    Scott needs to get out of Sioux Falls for a week or two.

    Just what South Dakota needs, faster, easier access to gambling addiction.

  3. Cory, I have yet to find the NPR story that describes how casino gambling is far less addictive than "video lottery" is. Will keep looking.

    Repeal video lottery in SD and replace it with a corporate income tax? You betcha!

  4. A Democrat wants to build a new gambling casino? Something smells strange here.

  5. Chris—you're right: creative economic development is the way to go.

    Larry: do find that article! I was thinking something along those lines. I wouldn't expect blackjack and poker tables to contribute to addictive behavior as much as slots and video lottery. And if we have problem gamblers, they're not going to drive all the way over to Iowa to a ritzy casino to gamble. In Madison, they'll just trundle a few blocks over to Players or Lucky Bucks to plunk their money into the video terminals.

    Maybe it works this way: gambling addiction is already a reality, destroying lots of South Dakotans' lives. Another casino across the line in Iowa won't significantly increase the number of addicts. Maybe neither will another casino in Sioux Falls.

    But I'm still looking for the compelling case for state involvement in this particular industry. Why not have the state invest more in artist-in-residence programs, or prairie art retreats for painters and writes? Or ethanol plants? Or wind turbine factories? Or electric car factories?

  6. I realize Scott has about as much of chance as being our next governor as, well, Cory. (sigh)

    That being said, he has an amazing opportunity to promote different ideas, new solutions, be it creative economies or sustainable technologies. Make us think, challenge those mainstay assumptions, really, you might just surprise the polls come November with that kind of progressive thinking.

    Otherwise Scott, you might just find yourself calling Dennis on election night, maybe you should save all that pesky trouble, make it easy on him, call it in tonight, go out to the lake for a few weeks, I hear it's nice on the lakes. (That's what Dennis says anyhow)

  7. Hey, I'm eminently electable... except for the small detail that I'm not on the ballot! ;-)

    Seriously, I still think Heidepriem has a better chance of winning in November than any recent democrat running for SD governor. I just don't think this casino issue improves those chances. (Hmm... I think I feel another Madville Times poll coming on!)


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