What impact will Pennsylvania’s recently legalized gambling have on the state’s cinemas?

posted by TheaterBuff1 on April 18, 2006 at 9:44 am

PENNSYLVANIA — Back when gambling became legal in New Jersey, many of that state’s longstanding successful businesses collapsed, some literally overnight, and movie theaters were no exception.

In New Jersey’s case, because the casinos generated far more revenues than traditional businesses could possibly even begin to, once the casinos went into full swing they absorbed so much political attention that it quickly became like New Jersey’s casinos were the only recognized revenue source there was.

Few if any of New Jersey’s traditional business operators foresaw this ahead of time, while many mistakenly believed the casinos would help uplift their businesses as well. In one or two rare instances it did pan out that way, but only because gambling was restricted to Atlantic City alone. Countless other businesses folded overnight, however, given how to such a large degree Atlantic City’s casinos were self-contained, replicating the same exact things that they sought to offer.

In Pennsylvania’s case, however, gambling is to be introduced throughout the entire state. No firmly set restrictions regarding final locations. Nor do there seem to be any firmly set restrictions on what Pennsylvania’s casinos can offer consumers in addition to gaming outlets.

So with possible lessons learned from what happened in New Jersey, is there anything right now to indicate that Pennsylvania’s cinemas are much better positioned to withstand whatever negative impact legalized gambling might have on them?

Comments (8)

TheaterBuff1 on April 18, 2006 at 9:18 pm

All theater owners/operators here in the state of Pennsylvania, plus all those who aspire to become this, should pay especially close attention to what is taking place in Gettysburg, Pennsylvania at this very moment with regard to the very critical, growing and unignorable issue I outlined above.

This first URL I’m providing you with is of the official website of Gettysburg’s historic Majestic Theatre, which has recently been restored to its former glory and then some. Of all theater restorations that have taken place throughout the entire state of Pennsylvania in recent times, and the United States for that matter, it is by far one of the most impressive success stories: http://www.gettysburgmajestic.org/home/index.dot

But in order to maintain this major milestone in movie theater restoration history that Gettysburg has recently achieved, this second link I’m providing you with will enable you to see first hand the powerful war that has been being waged on the part of the vast majority of Gettysburg’s citizens and those of Adams County, the area’s leading colleges including Gettysburg College (which played an essential role in restoring the Majestic Theatre), its leading business organizations and religious institutions, plus no less than Walter Kronkite himself, to prevent a casino from being built in Gettysburg, which not only will possibly cancel out this important theater restoration achievement, but will destroy one of our nation’s most hallowed battlegrounds: View link

Finally, this third link I’m providing you with will allow you all to see the situation as it currently stands in Gettysburg: View link

And as you can see, in total disregard of the tremendous progress Gettysburg has achieved in recent years — which I feel is especially signified by the Majestic Theatre’s magnificent restoration — there are those at various levels of government determined to destroy this progress at all costs. And in exhange for what? Promises being made to us that I can fully assure you won’t be kept? And so that just a small handful of people — particularly those who will acquire gaming licenses — will become fabulously wealthy as we the people of Pennsylvania, who are in the majority, get run straight into the ground? For that doesn’t sound like a very good bargain to me at all.

gettysburg on April 19, 2006 at 8:09 am

The ironic thing about this story of Gettysburg’s Majestic is that the would-be casino developer is David M. LeVan, who is honored as the largest donor on the theatre with the name “Jennifer and David LeVan Performing Arts Center” placed in stainless steel letters under the marquee. LeVan contributed 1.1 million to the renovation project in 2004. Ironically, the name change was announced just last week, to widespread anger from the hundreds of citizens who also contributed to the Majestic. (8 million is taxpayer money, the rest numerous ordinary residents.) The timing is just before the third PGCB hearing on the casino proposal May 17 at Gettysburg College. LeVan is a trustee at the college, which owns the Majestic and has not made a statement against the casino. The Gettysburg College Faculty, Parents Group and 3 student groups testified or will testify against the casino at the hearings. Almost all the testimony has in the first two hearings has been against the casino.

TheaterBuff1 on April 19, 2006 at 11:06 am

That is ironic, while it sounds to me like the Majestic is being muscled into supporting the casino even though operational-wise, once the casino goes into effect it won’t be in the Majestic Theatre’s best interest.

Meantime, here’s my follow-up extension to this over all topic:

I fully realize that I might’ve stirred up a major hornet’s nest with my above essay.

But in thinking it out more, I believe I have come up with what might be the best solution, based on my own experience of having lived through this before when gambling became legal in New Jersey.

In New Jersey’s case, what caused so many longstandingly successful New Jersey businesses to either fold or greatly compromise at the expense of quality, was the fact that the casinos of Atlantic City were self-contained in all respects. Not only did they provide gaming outlets, but also first class lodging, in-house restaurants, in-house lounges/nightclubs, in-house gift shops, free parking and top class in-house entertainment. And all for the cost to consumers what small or independent businessmen in New Jersey couldn’t possibly even begin to compete with. Some businesses, such as Ocean City’s largest hotel/motel operation — which is where I was working during that time period — did survive, and very successfully at that. But only because they resorted to underhanded tactics — in many instances illegal — while the government, fully preoccupied with the casinos, totally looked the other way.

But to avoid a repeat of that happening here in Pennsylvania I believe it can be done if all Pennsylvania’s gaming operations to come be required to be just that and nothing more. That is to say, they must not operate in combination with other things under the same control and ownership, such as hotels, restaurants, entertainment venues — including movie theaters — and so on. Furthermore, it doesn’t make sense that they be allowed to locate in close proximity to — or directly at — important historic sites (such as Gettysburg Battlefield), within year-round residential communities, in non-casino-related business districts, close to public parks and playgrounds, near to colleges and so forth and so on.

And what is most upsetting in Gettysburg’s case, site of the successful recently restored Majestic Theatre, is that this town has proven that it can make progressive economic strides without having to resort to gambling. Which, whenever possible, is far preferable. And Gettysburg has achieved that. So why consider gambling at all in that town’s case? Furthermore, what’s to say that Gettysburg’s success cannot be replicated throughout the rest of Pennsylvania as well, particularly in parts where this state’s economy is slumping the most? That is, why resort to gambling at all in those places when it appears Gettysburg has demonstrated first hand that there are far better viable alternatives that WILL work if given a chance?

As for gambling itself, whether it’s legal or otherwise, many of us see it as a sickness, and this is true of playing the slots especially, which Pennsylvania’s gaming outlets will be restricted to, and where the chances of ever actually winning are extremely low. And for those of us who do feel this way, we would far prefer to earn our livings through more legitimate, less exploitive means, such as operating a movie theater in a very classy and respectable manner. And how much does the gambling about to be introduced to Pennsylvania safeguard our right to do just that? And how much does it totally disregard it? For so far I’ve seen more of the latter than of the former.

deleted user
[Deleted] on April 19, 2006 at 1:06 pm

This whole situation reminds us that we still have historical treasures in this country in danger of being lost or in some way ruined even nowadays, and not just movie theaters. It sounds alarmingly similar to the incident a number of years ago in which Disney tried to open up a huge park near Antietam National Battlefield several years ago. This all comes from profit, not preservation, being the bottom line.

deleted user
[Deleted] on April 19, 2006 at 6:37 pm

A correction to the above article: it was near Manassas Battlefield, not Antietam.

Michael R. Rambo Jr.
Michael R. Rambo Jr. on April 19, 2006 at 9:51 pm

The movie theatre industry in Delaware survived when they received slots at the racetracks. The same thing is going on with the slots in NY state (The slots in NYC haven’t happened yet because NYRA is too busy creating their own problems to property construct a slot parlor at Aqueduct Racetrack).

TheaterBuff1 on April 19, 2006 at 10:13 pm

The motivation for profit is not the problem. Rather, it’s the failure to be able to distinguish wrongful profiting from that which is rightful. A movie theater has a side to it that a casino could not even begin to dream of having, and that is the ability to profit while not causing harm at the same time. Casinos could not possibly even begin to thrive without causing great harm in the process. For in order to make the huge profits they do, others, and in most instances those who cannot afford to, must lose all this money at the same time, and with absolutely nothing good they can personally show in exchange for that loss. On the other hand, movie theaters can financially thrive while greatly enrichening the lives of others at the same time. But, of course, that giving back they do can all get cancelled out if they accept any sort of subsidization from the casino industry so as to be so strongly positioned. Which is why it’s very upsetting — and embarassing — for the Majestic Theatre in Gettysburg to have stooped to doing this. And I hope it can find in itself the strength to reverse its having done this. For up until now its success story has been very inspiring.

Meantime, in another part of Pennsylvania, specifically the West Shore Theatre just outside of Harrisburg, we see a very successfully run theater which to the best of my knowledge has not had to accept any sort of blood money in order to thrive. And if this business model works for the West Shore Theatre I see absolutely no reason why it couldn’t work for the Majestic Theatre as well.

Now as for Disney’s wanting to open up a huge park near Manassas Battlefield, while it didn’t make a great deal of sense in that Disney amusement parks are powerful enough to be a draw in themselves without having to be immediately adjacent to other major tourist draws, at least Disney amusement parks give something back in exchange for their thriving. And the more they give back the more they thrive, just as it is with very well-run movie theaters.

Think of it this way: Both in the case of well-run movie theaters and amusement parks, when people go to these things they expect to be uplifted in exchange for the money they spend. And both well-run movie theaters and amusement parks have the power to deliver on that while greatly profiting at the same time. Now look at the huge difference between that and casinos. When people go to casinos, the expectation they hold is that they’re going to win big. But what would become of casinos if that actually did happen? Unlike how it is with well-run theaters and amusement parks there’s no possible way casinos could make good on that expectation while thriving at the same time. People have to lose so that they can thrive, there is no other way. And the more they thrive the more society is economically downgraded. There is no other way.

So while your comparison between the current Gettysburg casino proposal and Disney’s onetime proposal to build an amusement park near Manassas is interesting, it’s really not accurate. On the surface it might look similar, but that’s as far as it goes. For the fundamental difference between amusement parks and well-run movie theaters is that they have the power to thrive without causing great harm at the same time. Casinos, on the other hand, couldn’t even begin to dream of having that same power. So why trade away that power that movie theaters have I ask? And do we catch onto this ill-advised sort of trade-off now? Or when it’s too late to? I say we catch it now, lest New Jersey’s sad story becomes Pennsylvania’s as well…

TheaterBuff1 on April 20, 2006 at 9:30 pm

Slots limited just to existing racetracks I don’t see a problem with. And in Pennsylvania’s case if it was just to be limited to that I would never have opened discussion on this topic. But in Pennsylvania’s case a situation is coming up on the road ahead where it appears there’s going to be few if any restrictions. And when it comes to profitability, there’s a long list of various types of businesses that couldn’t even begin to compete with a slots parlor. And movie theaters certainly are high on that list.

I’m sure that in the case of the Majestic Theatre in Gettysburg, that by its showing support to the Gettysburg casino proposal now in exchange for the money it’s received expects to be remembered, and subsidized, by the casino once it gets built. But how would such be to that casino’s advantage? For when we’re talking about a casino that’s restricted to slots gambling only, this is not something geared toward highrollers. But rather, a class of gamblers who would just assume reserve all the money they have to spend for the slots alone. Not to mention all the time they have. And why would a casino subsidize anything not conducive to that?

Right now those seeking to introduce the Gettysburg casino can use the Majestic’s favorable support. So it makes perfect sense right now why they gave the Majestic all that money. And likewise due to that it makes sense why the Majestic is saying yes, as it is money it could use. But I’m looking ahead to the next phase here, once that casino gets built. For at that point the theater and the casino will be at odds with one another, and with the casino holding far more political clout of the two. Right now from the political perspective the Majestic Theatre means something. It’s a tourist draw for the town. Just as the historic battlefield is. But once that casino’s in place? For once that casino’s in place, it won’t need the Majestic Theatre, won’t need the battlefield or anything else Gettysburg has to offer, to attract customers to it, just the fact that it has slot machines alone. And in terms of the dramatic increase in revenues the casino will generate, how much of that will be used to uplift the town of Gettysburg really?

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