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Commentaries

Cannibalizing casinos an example of how not to grow jobs and revenue

By Jeffrey S. Podoshen, philly.com

Most of us have seen economic cannibals in action at local shopping malls and cities, where new Starbucks and Gap stores are built too quickly and too close together to their existing stores. Thus, the new stores don’t gain sales from new customers but instead shift sales from the old store to the new one. The inevitable fix to cannibalization is, generally, to close underperforming stores.

Online gaming in Pennsylvania, currently under consideration in Harrisburg, will cannibalize traditional gaming. Extensive cannibalization has already happened to our neighbors to the east in New Jersey.

Take a short trip down the Atlantic City Expressway to see what happens when gambling revenues are eaten by online competition and a new wealth of brick-and-mortar casinos appear within a two-hour’s drive in Philadelphia. Atlantic City is suffering today and the landscape is riddled with abandoned buildings and sunk costs that will never be recovered.

Many newer brick and mortar casino resorts have relied on mixed complementary product offerings to help grow their revenues beyond gambling.

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