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Stateside
Sharon Harris looks at the how the Obama administration is affecting gaming in the US…
As journalists, we in the media recognize the power of our words and their intent. That is why the good ones edit and revise their work.
On the campaign trail, then-Senator Barack Obama talked about “just words, just speeches”. Perception is often reality. Ironically, he too has learned his own words are under intense scrutiny. Some comments have come back to haunt him.
For weeks after taking office, Obama and his spokespeople traveled the country and held interviews. They described the economy as “dire”, a “crisis” or a potential “catastrophe”; the public halted its investing and spending.
After assessing public opinion, the Obama Administration representatives sharply changed its approach. The language then projected hope and encouragement about the country’s financial condition and future. Whether they calmed the public’s apprehension is unclear.
The stock market fell 20% since Obama took office, but Wall Street rallied a bit in March. Maybe it was the change in language, but experts warn against evaluating its long-term health too soon.
Crippled by the falling stock market, the nation’s largest gaming companies have swerved dangerously off course. Harrah’s, MGM Mirage, Las Vegas Sands, Boyd Gaming, Trump Entertainment and others face extreme financial challenges and shaky futures.
Many of these companies operate casinos across America. Restructuring has caused massive layoffs and shutdowns.
As bailouts, stimulus spending and budget cuts continue across the US, what should Obama say? How careful must he be?
As the $787 billion Recovery and Reinvestment Act of 2009 passed in February, Obama warned corporate America against excessive tax-deductible meetings and conventions. He said: “You can’t take a trip to Las Vegas or down to the Super Bowl on the taxpayers’ dime.”
A furious Mayor Oscar Goodman publicly rejected Obama’s comments about Las Vegas. Sheldon Adelson also denounced Obama’s words.
In various interviews, Goodman said, “This is a very important place for people to conduct very important business. For them to change their mind and go someplace else and to cancel at the suggestion of the President of the United States… is outrageous.”
Goodman sought a public apology from the White House. I don’t think it ever came.
Coincidentally, the gradual Las Vegas business slowdown accelerated after Obama and Congress spoke against corporate excesses, spending and executive compensation. The Las Vegas Convention and Visitors Authority reported 340 event cancellations between early December and early March, a projected loss of about $131.6 million in lost non-gaming spending.
Statistics report that 2.8 million people came to Las Vegas in January, 11.9% down from last year. Convention attendance weakened and room rates dropped by almost 20%. Local resorts lost 111,800 guests, 236,700 room nights and an unknown amount of gambling dollars.
In February, American Gaming Association President and CEO Frank Fahrenkopf Jr. and Roger Dow, President and CEO of the US Travel Association, posted an open letter accusing Washington legislators of worrying about saving and creating jobs for everyone but those employed in the hospitality/travel industry. They claimed that verbally using business travel as the scapegoat for excesses endangers more than one million jobs – 300,000 directly in gaming – and eliminates $16 billion in tax revenues.
The reaction reached the White House. In mid-March, Obama invited travel executives and major hotel chain CEOs to Washington. He promised to actively advocate responsible corporate travel.
If passed, the Travel Promotion Act will collect $10 from every foreign visitor not required to pay for a US visa, to create a fund to promote the US as a welcoming country for foreign visitors.
In this new era, giant corporations, banks and Wall Street firms receiving taxpayer bailouts must follow strict guidelines, but language that targets individual industries is counterproductive. As Congress, funded by taxpayers, seeks greater say over how businesses operate, it should clean up its own act.
These public “servants” should refine their own rhetoric and spending. Recently, Democrats and Republicans held separate retreats at luxury resorts near Washington. It appears they consider themselves immune from tight budgets, despite public sentiment.
Wednesday is party night at the White House. Every week, they have held a dinner or reception with top entertainment. I live near Atlantic City, where the economy has hit the nightlife; maybe I can bag an invite.
Conga, anyone?
