HOW TO MAKE MONEY IN YOUR OWN TOWN

“That’s a bet,” say tens of millions of Americans every day.

Let’s fact it, gambling is a reality around the world and growing in America among people who have the desire and money for it. It’s time that African Americans do something transformative toward generating more economics where we live with more of us owning places where bets are placed. If example, polls in Maryland show that 7 of 10 residents support legalizing slots; and if the state’s voters approve the initiative in November, Maryland will become the 38th state to allow slots or casino-style gambling. Due to the state’s black legislative officials, African American entrepreneurs will have numerous operations in Baltimore and Prince George’s County, the nation’s wealthiest majority-black county

Gambling is where the money’s at. Americans wager more money than they spend on all leisure things except alcohol. The gambling industry had 2005 gross revenues of $84.65 billion and proponents say it provides localities valuable tax revenue and job opportunities. Across America in 2006, commercial casinos provided over 354,000 jobs and yearly state and local tax revenue of $5.2 billion.

Gaming operators mainly provide a place or a means to play games of chance, where the odds of winning favor the “house.” Gambling is legal under US federal law, but the states are free to regulate or prohibit it. If state-run lotteries are included, almost every state allows some form of gambling. Levels of government down to township municipalities have the right to authorize multiple forms of gambling from bingo in church basements, to multi-million dollar poker tournaments. The American Gaming Association breaks gambling down into the following categories: Card Rooms, both public and private; Commercial Casinos; Charitable Games and Bingo; Indian Casinos; Legal Bookmaking; Lotteries; and Pari-mutuel Wagering.

Black economic empowerment can occur in gambling businesses. There are 17 states (and 1 US Territory) that allow commercial casinos in some form. There are approximately 450 commercial casinos. Most casinos are small. Companies with large operations include MGM Mirage and Harrah’s Entertainment. About $35 billion of annual revenue is taken in by commercial casinos, $20 billion by state lotteries, about $25 billion by Indian casinos, and the rest by horse racing, bingo, charities, and bookmaking operators. (For gambling companies, “revenue” is the total amount bet minus winnings paid to gamblers.) The industry has become highly concentrated: the top 20 companies hold more than 60 percent of the market.

Actual operations of casinos involve acquiring and servicing gambling machines, usually from large game equipment manufacturers such as International Game Technology and Bally Technologies. Gambling operators are free to set the odds of winning as long as they prominently post a pay schedule on the machine. Gambling licensees pay states a percent of gross revenue – 20 to 25 percent. The profitability of individual companies depends on efficient operations and effective marketing. Large operators have the financial resources to make large investments in facilities and computers.

Detroit-native, Don H. Barden is the country’s only African American owner of a national gambling company and first to own a Las Vegas casino. Barden has been a millionaire since the 1980s and a casino owner for 12 years, with six casinos in five states. He owns large casino establishments in Tunica, Mississippi and Gary, Indiana. The Barden’s Company was selected Black Enterprise’s 2003 Company of the Year. The Baden Companies have annual earnings in excess of $350 million and is perennially among Black Enterprise’s top ten black companies.

Many blacks will oppose gambling, saying “it leads to corruption, compulsive gambling, and higher crime rates” in their communities. But, nationwide polls show 66 percent of Americans view gambling as “moral acceptable” and support it. Over the last decade, legal gambling businesses have expanded exponentially and politicians have become intimately connected to the industry. If gambling is being discussed in your town, you need to ensure lawmakers get minority businesses 25 percent, or more, of gambling-related contracts, and guarantees that the venues will hire local residents. People interested in entrepreneurial opportunities in the industry should research their local legislation on gambling.

By William Reed, Week of October 5, 2008

Tags: National

Category: Business Exchange